STATE OFFICIALS

CRITICIZE MEDICARE BENEFIT WORDING

The nation's insurance commissioners say the federal Medicare agency has made misleading statements about the new drug benefit in an effort to persuade people to sign up.

The National Association of Insurance Commissioners, which represents insurance regulators in all 50 states, registered its concern in a letter to the agency. State officials elaborated on their concerns in recent interviews.

If private insurers made such statements about their products, the association said, state officials would investigate their marketing practices for possible violation of consumer protection laws.…

The insurance commissioners objected to a proposed federal rule requiring insurers to tell policyholders that the Medicare drug benefit provided "greater value'' than did the drug coverage available to people with private Medigap insurance. Similar statements appear on the Web site of the Department of Health and Human Services.

In their letter, the insurance commissioners agreed that a notice to beneficiaries was desirable. But the letter said the government had gone beyond the scope and purpose of the law and was requiring Medigap insurers to use "misleading language in an attempt to persuade beneficiaries to enroll'' in the new program.

….The Bush administration contends that the new drug benefit will be superior to existing private coverage.

"The new Medicare prescription drug coverage clearly offers a much better value to beneficiaries than Medigap, including comprehensive drug coverage at a lower cost to the beneficiary," the Department of Health and Human Services says on its Web site.

Dr. Mark B. McClellan, administrator of the federal Centers for Medicare and Medicaid Services, said, "Beneficiaries will generally be better off with the new drug benefit because they can get a 75 percent federal subsidy and protection against very high costs, which is not available in Medigap plans."

….State insurance commissioners object …. The new benefit, they said, does not necessarily offer greater value for all Medicare beneficiaries.

"Value can be measured in many ways, not just in the monetary value of benefits,'' the association said. Whether the new benefit provides greater value depends on many factors, including an individual's medical condition, drug costs and financial circumstances, it said.…Moreover, it said, there is no guarantee that Medicare drug plans available on Jan. 1, 2006, will still be available two years later….

The Wisconsin insurance commissioner, Jorge Gomez, said the federal government appeared to be "steering beneficiaries into the new Medicare drug coverage, which may or may not be appropriate, depending on an individual's circumstances.''

….Deborah Armstrong, head of the New Mexico Department of Aging and Long-Term Services, said ….beneficiaries should be aware (however) that if they later need more coverage and switch to a Medicare drug plan, there will be a financial penalty for late enrollment.''

- Abridged from “State Officials Criticize Medicare Benefit Wording”, by Robert Pear, NYT, November 7, 2004.