Protect TVA Retirees and other Seniors From Misleading Medicare Information
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HELP TVA RETIREES & SENIORS ACROSS THE USA
Read the following. You will be surprised, disappointed, and probably angered.
If you sign the petition, you will be asking for an investigation into the sales and marketing practices of all Private Medicare Exchanges (PME). What the heck is a PME? They claim to be seniors' "trusted advisors" for Medicare insurance. Read on and judge for yourself.
A growing number of U.S. employers are capping their risk of rising health insurance costs by terminating their employer-sponsored Medicare plans and sending their retirees to private Medicare exchanges (PME) to buy replacement coverage. Unfortunately, it appears that some retirees who purchased their new Medicare plans through PMEs may have paid substantially higher prices for their Medicare insurance, while believing they were purchasing their coverage at "competitive" rates. Moreover, many were falsely led to believe that they “must” purchase their Medicare insurance through a PME.
Even a federal agency, the Tennessee Valley Authority (TVA), used a PME to help terminate its retirees’ health insurance plan and transition its retirees to Medicare plans offered through the PME. TVA terminated its employer-sponsored plan effective January 1, 2017 and contracted with the PME to help around 15,000 retirees find replacement coverage.
The following information is based primarily on TVA retirees’ experience with TVA’s PME. However, similar issues have been reported by other retirees across the USA in dealing with their PMEs.
While some of TVA’s retirees were required to purchase their plans through TVA’s PME to maintain healthcare subsidies or health insurance for their under age 65 spouses, there were approximately 7,000 retirees who had nothing to lose and much to gain by buying their plans directly from insurers. These 7,000 retirees received no healthcare credit/subsidy from TVA and may have needlessly paid rates that are 67% to 107% higher than purchasing directly from insurers. However, TVA and its PME failed to disclose this information to retirees.
As the above chart shows, some retirees may needlessly have paid rates that are 107% higher (compare Aetna’s direct rate with the TVA-Mutual of Omaha rate in the chart) than purchasing directly from insurers. These higher rates could cost retirees an extra $20,000 over the next 15 years for Medigap insurance that includes absolutely no additional plan benefits.
Many retirees were not aware that they could purchase their Medigap plans directly from insurers. Instead they believed they were required to purchase their plans through the PME. It is likely the following statements presented to retirees in marketing brochures and posted for almost two years on the PME's website are largely responsible for retirees’ belief that they must purchase from the PME:
"You must take action... Because the coverage under the current TVA Medicare Supplement Plan will no longer be available as of January 1, 2017, you must enroll through TVA's PME during the October 3- December 31, 2016 enrollment period." In another brochure, retirees were advised they “must” enroll through the PME or face a “lapse” in coverage.
Based on the foregoing, it appears that the PME:
• did not always provide plans with "competitive" prices,
• led retirees to believe they “must” purchase the PME’s plans,
• did not always act as a "trusted advisor", and
• did not always provide "objective and unbiased" advice.
If other PMEs use similar pricing schemes and marketing tactics, there could already be a very large and growing number of seniors across the nation who innocently purchased their plans thinking they were getting appropriate coverage at a competitive price. Of course, there is no way, based on the limitations of this review, to make a reliable estimate of how many were affected. However, if there is just one, that is one too many.
Fortunately for seniors, the Center for Medicare and Medicaid Services (Medicare) has laws that protect against misleading information.
By law, if seniors are provided misleading information while selecting their Medicare insurance, they are eligible for a new “open enrollment” opportunity. The new open enrollment period would allow them to, without penalty, cancel and replace their high-cost plans with lower cost plans that provide the same exact plan benefits.
CONCLUSION & RECOMMENDATIONS:
It is likely that seniors (not just TVA retirees) across America may have received misleading information about their Medicare options from PMEs. To prevent this, and to make things right for those who were misled, Medicare and the major insurers represented by the PME should work collaboratively with state insurance commissions to investigate PMEs' pricing and marketing schemes and, if necessary, take the following actions:
1. Declare an open enrollment period for any seniors who were provided with misleading information. This would allow, without penalty, replacement of their current plans with lower cost alternatives that include identical plan benefits.
2. Ensure employers and PMEs fully disclose to retirees that they are not required to purchase their plans through the PME.
3. Ensure employers and PMEs fully disclose that retirees may be able to find plans in their local market that are less expensive than those offered through the PME.
4. Evaluate the adequacy of Federal and State laws pertaining to the sale of Medigap plans. If it is found that current laws are not sufficient to adequately protect our seniors from unfair and deceptive marketing and pricing practices such as those described above, then the major insurers and lawmakers should work together to craft and implement laws that will protect our seniors.
NOTE: Information and data used in this petition were obtained from:
- • CMS (Medicare)
• State of Tennessee insurance investigators
- Tennessee Code Annotated (TCA)
• State of Tennessee Department of Commerce and Insurance representatives
• Tennessee Valley Authority executives
• Tennessee Valley Authority Benefits Call Center employees
• Tennessee Valley Authority retirees
• Tennessee Valley Authority Retirees Association
• National Retirees Legislative Network – TVA Chapter
• Consultants specializing in analysis of Medigap plans
• Private Medicare Exchange websites
• Medicare websites
• Audio recordings of Q&A sessions between TVA retirees and PME representatives.
• State Health Insurance Programs (SHIP) representatives
• Senior Medicare Patrol (SMP) advisors
• Common sense analysis of Via’s rates
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