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Seven insurers to suspend marketing of Medicare plans

Managed Care Weekly Advisor, June 20, 2007

Following the complaints by hundreds of Medicare beneficiaries, seven insurers with the lion's share of Medicare's private fee-for-service plan market have agreed to suspend marketing of the plans. On June 15, The Centers for Medicare and Medicaid Services announced that Humana, United Healthcare, Wellcare, Universal American Financial Corporation Sterling and Blue Cross/Blue Shield of Tennessee are involved.

2,700 complaints were filed against the insurers between December 2006 and April 2007 by beneficiaries who argued that they were tricked or bullied into joining plans without fully understanding plan limitations or how the plans worked. In total 1.5 million beneficiaries are affected, 200,000 of which applied for plans as part of company or union retirement health benefit plans. The remainder applied on their own.

At a May 16 Senate Aging Committee hearing, state insurance regulators said Medicare officials have failed to properly oversee the marketing of the plans, resulting in predatory insurance agents taking advantage of senior citizens.

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