Humana is under investigation for sending out communication to their Medicare Advantage clients. The Huffington Post obtained a copy of the Humana mailing and can be viewed here: http://big.assets.huffingtonpost.com/humanamailer.pdf. I read the mailing sent by Humana and found nothing outlandish or misrepresentative of the reform being discussed on Capitol Hill but I suggest everyone to read the mailing to judge for themselves. The mailing does warn that "Some in Washington want to cut billions of dollars out of the Medicare Advantage program" and outlines changes that Humana will be forced to make if the cuts take place. Sen. Baucus took exception to Humana's mailer to their clients. "It is wholly inappropriate for insurance companies to mislead seniors regarding any subject – particularly on a subject as important to them, and to the nation, as health-care reform. The health-care reform bill we released last week strengthens Medicare and does not cut benefits covered under the Medicare program – and seniors need to know that," stated Sen. Baucus.
While I agree with Sen. Baucus that no company ought to mislead the public, did Sen. Baucus forget what was written in his bill? The bill calls for $123B in cuts to Medicare Advantage over the next ten years. Instead of recalling this fact Sen. Baucus complained to the Centers for Medicare and Medicaid Services (CMS). The CMS in turn ordered Humana on last Friday to cease and desist because their mailer was "misleading and confusing". Again, I suggest everyone to read it. The kicker is that Humana, and others, have supported ObamaCare with the exception of Advantage cuts and the public option (Wall Street Journal). So, why the gag order Sen. Baucus?
Americans see the warning here? The complaint by Sen. Baucus is a prime example why Government cannot be a participant and referee in any industry. Filing the complaint to the CMS is an abuse of power and a blatant attempt to restrict the communication of what is going on in Congress. The America's Health Insurance Plans, an industry trade group, expressed their outrage to the gag order by saying that proposed cuts "will have a devastating impact on the health security of the more than 10 million seniors enrolled in the program. If these cuts are enacted, seniors will face premium increases, reduced benefits, and, in some parts of the country, will lose access to their Medicare Advantage plan altogether" (www.npr.org). Again, why is the Obama Administration allowing a gag order on information being sent out to those that are impacted?
The Medicare Advantage program receives additional reimbursement rate which cost taxpayers an additional 14% per enrollee (www.courier-journal.com). Now if Sen. Baucus cuts ($123B) or President Obama cuts ($177B) to Medicare Advantage rates takes place the logic step of those provided the insurance option will need to cut back benefits in order to maintain margin expectations. All Humana, as I can tell from reading the mailer, is guilty of is warning their clients of how changes in reimbursement rates will affect their coverage. If Sen. Baucus or President Obama has trouble with that then offer an explanation on how Humana is incorrect in their assessment. Do not sick the CMS on them or others in the insurance industry to place a gag order on them. It is their right to communicate to their clients.
Don't take my assessment as gospel; rather read the mailer (link above) and determine for yourself if Humana violated any laws as to stating any misleading or confusing information. After you read it and make your own assessment call your Senators and Representative to voice your opinion. I wonder how long the CMS will take to determine if laws were violated.
No matter how "honest" Humana's letter may sound, when they signed on to be a Medicare Advantage provider -- a contract they signed freely and voluntarily, even enthusiastically -- they agreed to abide by VERY strict mailing and marketing rules. They appear to have violated those rules (you fail to mention the Humana letter was delived in an envelope making it appear to come from Medicare, not Humana, thereby frightening seniors needlessly).
ReplyDeleteCMS is only ordering Humana to comply with the contract they signed (and FYI, CMS has issued a similar letter to dozens of other, though smaller, Medicare Advantage providers).
Finally, CBO and several health economists have concluded even with a $235 billion cut to Medicare Advantage, there will be few if any cuts to existing Medicare Advantage programs. What seems to be ignored is that the 14% supplemental (subsidy) payout goes mostly to clear profit for Humana. Even if this cuts that supplement to only 4% or 5%, Humana would still be paid enough to supply the same care, though with a smaller profit. People should be reminded that for about a decade, until 2002, Medicare Advantage paid only 95% of Medicare and was still successful.
Anon...I thank you for your comments. I did mention the 14% extra kick that Humana and others receive in my blog entry. Let's be honest with each other. The only reason Sen. Baucus asked for the inquiry was because the mailer accurately displays what potential change will take place if the Baucus Bill is passed.
ReplyDeleteLet's not fool ourselves either to believe that insurers, like Humana, will not reduce coverage under Medicare Advantage if the 14% kickback is eliminated. It would be bad business practice if they did not. The other day the Star Tribune reported that the Mayo Clinic lost over $730M in taking care of Medicare patients. Who do you think makes up for the lost revenue?