Medicare sales and marketing abuses are a recurring problem that doesn't get discussed much. However, persistent patterns of overly aggressive sales practices were serious enough to spur federal legislation last summer that spells out practices that Medicare beneficiaries should not encounter or, if they do, should not tolerate.
So, during open enrollment for Medicare, make sure you're on the alert for improper sales pitches and outright scams.
According to the National Association of Insurance Commissioners, here are nine marketing do's and don'ts that consumers need to know. Anyone who represents himself or herself as selling a Medicare policy:
1) Must be licensed by the state. Check with your state's insurance department to make sure the salesperson is a licensed agent. Find a link to your state insurance department's Web page.
2) May not make unsolicited contacts with prospective beneficiaries, such as door-to-door sales, cold calls, or approaching you in a parking lot.
3) Must have an appointment in advance before coming to your home.
4) Must arrange with you in advance the type of products that will be discussed during a scheduled sales appointment. At the appointment, the salesperson may not try to sell you other types of insurance coverage than the type(s) agreed upon in advance.
5) May not try to sell you products that are not related to healthcare (like a life insurance policy or an annuity) during a sales or marketing presentation of a Medicare prescription drug or Medicare Advantage plan.
6) May not use certain healthcare settings, such as a doctor's office or a pharmacy, to attempt to sell you a plan.
7) May not use an educational event to attempt to sell you a plan.
8) May not offer you free meals at promotional or sales events.
9) May not offer you gifts or other promotional items whose value exceeds $15.
"There are always crooks out there trying to part seniors from their money," says Patricia Barry, a senior editor at AARP and author of Medicare Prescription Drug Coverage for Dummies.
Many abuses, she says, stem from federal rules for Medicare Advantage programs that make them more profitable for insurers than other types of Medicare coverage, including providing richer commissions to insurance agents selling the policies. Those concerns spurred this year's law and adoption of new marketing rules, but problems will not magically disappear.
Barry says that seniors must be informed and that this process starts with learning about their Medicare plan. "A lot of people don't even know the kind of plan they have already," she says. "One of the problems people had last year is that they didn't even know they were being sold a Medicare Advantage plan."
"Medicare is very confusing here because there are so many plans," says Barry, a native of Britain who is struck that it took her 360 pages in her book to describe the U.S. drug program for seniors. "In my own country, I could do it in six words: 'Seniors pay nothing for prescription drugs.' "
If you have a Medicare complaint, you can call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.
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