Medicare Advantage Program Abuses

Nationwide, enrollment in the private plans, known as Medicare Advantage plans, has soared, to more than 8.9 million in November, from 6.1 million at the end of 2005. The fastest growing type of plan, known as a private fee-for-service plan, is the one being sold most aggressively here.

The staff of the Medicare Payment Advisory Commission, an independent federal panel, said this month that it had found evidence of hard-sell tactics in interviews with a dozen groups of beneficiaries around the country. “In all 12 focus groups, at least one member mentioned horror stories about marketing abuses,” Jennifer Podulka, a staff member, told the commission at its meeting on Dec. 6. Insurance experts say the extent of the problem almost surely exceeds official data because many victims never file complaints or report their experiences.

Compounding the problem, many agents sell Medicare Advantage plans for two or more insurance companies, and some work for independent marketing organizations, so the lines of responsibility may be blurred.

“Medicare has a pile of new rules, but the rules are not making a heck of a lot of difference,” said L. Darriel Pulliam, an insurance agent in Columbus for more than two decades.

Under the Medicare Advantage program, the government pays insurers an average of $9,000 a year for each person enrolled in a private plan. Agents say they typically receive commissions of $350 to $600 for each person they enroll. Agents can buy the names of prospective customers from marketing organizations like the Premier Agent Group in Dallas, which offers “100 red-hot Medicare Advantage leads” for $1,000, according to the company’s Web site.