Better check the fine print on that newfangled Medicare plan
When two insurance agents showed up at Dorothy and Charles Holt's Visalia, Calif., home last spring, they offered a deal that seemed too good to pass up. For no monthly premium whatsoever, the couple could get a health insurance policy that would reduce their Medicare costs to just $5 for regular doctor visits and $15 if they saw a specialist, instead of the 20 percent coinsurance they paid with their regular Medicare plan. The agents said the new policy would not replace their coverage under the regular Medicare plan; it would just make it better. The Holts signed up that day.
But it wasn't long before they started running into trouble. The Holts found out that the SecureHorizons plan had indeed replaced their original Medicare plan, which allowed them to see most any doctor. Although the agents had assured them that all doctors would take SecureHorizons, the Holts' doctors told them they wouldn't accept it. The agents had also promised them they'd pay less under the new plan. Dorothy, 75, who suffers from congestive heart failure, requires an injection every two weeks that costs $1,600. Their old Medicare plan had covered the shots, but SecureHorizons would not.
Locked in. When the Holts tried to get out of the plan, they were told they were locked in until 2007. Finally, after filing a complaint with the federal Centers for Medicare and Medicaid Services, writing their legislators, and enlisting the assistance of the local Health Insurance Counseling and Advocacy Program, they were allowed to go back to regular Medicare. But they're worried that other seniors could be hoodwinked. "It's just not right the way they did this," says Charles Holt.
UnitedHealthcare, which operates Medicare plans under the SecureHorizons name, declined to comment on the specifics of the case. But spokesperson Peter Ashkenaz says the company takes these complaints seriously and investigates them thoroughly. "Based on our findings, we'll take action up to and including termination of the broker's contract," he says.
The plan the Holts signed up for was a Medicare "private fee-for-service" plan (PFFS), a relatively new option that resembles traditional Medicare in that it generally doesn't limit beneficiaries to a defined network of providers. In addition to enticing seniors with low premiums, the plans may offer disease-management services and vision, hearing, dental, and other coverage not available under the regular Medicare plan.
Congress authorized the plans in 1997, but it wasn't until the past two years that enrollment really picked up speed, increasing from 51,000 in 2004 to 864,000 at the end of 2006, according to Mathematica Policy Research. Experts attribute the growth to the Medicare Modernization Act of 2003, which boosted reimbursements to insurers that offer private plans. The law also created Part D, the Medicare drug benefit, which opened the door for private insurers to step up their marketing to seniors, not only of drug plans but of all private Medicare insurance products, from HMOs to PPOs (preferred-provider organizations) to PFFS plans, which are collectively called Medicare Advantage plans.