Seamless Conversions Can Put Seniors in a Bind
August 31, 2016| By Drew King |
Region: North America
A couple of weeks ago I read an article in the Health & Science section of the Washington Post entitled “Senior Surprise: Getting switched with little warning into Medicare Advantage.” For those who haven’t seen it, here’s a quick summary: A New Mexico woman who had taken steps to enroll in traditional Medicare came home from the hospital after surgery last November to find out that she had been automatically (“seamlessly”) enrolled in a Medicare Advantage (MA) plan by her former health insurer. Unfortunately, because her doctor and hospital were not in the MA network, she was now on the hook for a $16,622 bill (which was paid after she found and received help from a Medicare counselor and was reinstated to traditional Medicare.)
How could this happen? The answer is that it’s allowed by law. Section 1851(c)(3)(A)(ii) of the Social Security Act provides for “seamless conversion” - an enrollment mechanism that permits insurers who offer both MA and non-MA health plans to seamlessly convert customers in the non-MA plans into the MA plan when they first become Medicare eligible.
Perhaps this makes sense, but you’re thinking “Surely this conversion must be voluntary, right?” Well, yes and no. The insurer must provide written notice at least 60 days prior to the date of conversion, and this notice must include clear instructions for declining, or “opting out” before the seamless conversion takes place.
However, as anyone who works with the senior population knows, newly eligible Medicare enrollees are bombarded with direct mail promotions. It would be very easy for them to miss a written notice in the midst of all this, especially if they’re not looking for it, because they’ve already enrolled in traditional Medicare.
Pressure is building on CMS to do something about it as more of these stories come to light. Fortunately, help may be on the way from Congress. The Washington Post article mentions Rep. Jan Schakowsky (D-Illinois) is pushing for stronger consumer protections that could change the “opt-out” to an “opt-in.”
We contacted NAHU (the National Association of Health Underwriters), and they believe that if there is at least an agent of record, they should be copied on all correspondence and have the opportunity to assist the new beneficiary through their choices. Using a licensed agent who specializes in Medicare and Medicare products will reduce enrollment errors and increase beneficiary satisfaction.
We also contacted AHIP (America’s Health Insurance Plans) which informed us they are aware of the recent publicity but also have not taken a position on this issue.
We agree with Rep. Schakowsky that something needs to be done to fix this situation. Gen Re will support a sensible alternative to the current law that protects consumers and agents, as well as the Medigap insurers who could be missing opportunities to provide additional solutions for seniors to consider.
The more I think about it, the more I realize an argument can be made that "seamless conversion," in its current form, benefits MA plans more than customers who are converted without their knowledge or consent. That's a surprise seniors can do without.
- “Beware of being automatically enrolled in a Medicare plan you don’t want.” Philip Moeller, PBS Newshour.
- Medicare Managed Care Manual, Centers for Medicare Services.
- Medicare+Choice Program – Eligibility, Election, & Enrollment.