CAUTION IN ENROLLING HEALTH INSURANCE PLAN

New rule would limit insurers contact with elderly, disabled

Agents selling private health insurance plans to the elderly and disabled would be barred from cold-calling, door-to-door solicitations and pitching their products outside hospital waiting rooms or pharmacies, under a federal rule proposed Thursday.

The rule is designed to make it harder to pressure Medicare beneficiaries into signing up for insurance products they don't need or want. It essentially restricts face-to-face solicitations to those initiated by the customer.

A new Medicare drug benefit began Jan. 1, 2006. Since then, participants and state insurance commissioners have complained that some agents use false information to enroll people into certain plans, particularly those offering comprehensive health insurance.

"We want to make sure that beneficiaries aren't pressured into sales," said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services. "In parking lots, waiting rooms and those kinds of places, a salesman can create a pressure environment or a threatening environment where a beneficiary will agree to anything just to get away."

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About 27 million people get coverage for their prescription drug needs either through a private insurance plan that offers only the drug benefit or through a "Medicare Advantage" plan that offers comprehensive health benefits. In some cases, people were enrolled in plans even after they made it clear they didn't want the product.

Advocacy groups said the rule is a step in the right direction, but it won't be enough. They want states to regulate the insurance companies that offer Medicare Advantage plans. Currently, states only regulate the activities of the agents selling the plans.

"CMS doesn't have the boots on the ground to enforce even good rules like this," said Paul Precht, policy director for the Medicare Rights Center.

But Weems said the rule also gives CMS authority to issue fines of up to $25,000 per beneficiary affected by the company's conduct. Previously, the fine was $25,000 per contract.

"That is an extremely powerful enforcement tool," Weems said.

Several provisions in the proposed regulations are already part of voluntary guidelines for the industry. But there are some areas where Medicare went beyond what the insurance industry sought. For example, insurers routinely sent brochures in the mail explaining a product to a potential customer. Then agents would call to make sure they got the brochure. They would no longer be allowed to make those calls under the proposed rule.

Also, insurance agents commonly used their meetings about the drug benefit to pitch other types of products such as long-term care insurance or disability insurance. The regulation would prevent them from doing so _ unless the agent cleared it with the potential customer before the meeting.

Karen Ignagni, president of America's Health Insurance Plans, said the rule would prevent agents from marketing at health fairs or anywhere else where health care is delivered. She said the rule is an important step in protecting beneficiaries and questioned the need for more state regulation.

"Medicare is a federal program. Moving away from federal regulation toward 50 states approaching this in 50 different ways doesn't set a uniform standard for beneficiaries," Ignagni said. "That's why our board urged additional federal requirements."

Medicare officials said they hoped to issue a final rule by late October, which would allow for the changes to take effect before the next open enrollment season for the drug benefit.

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On the Net:

Centers for Medicare and Medicaid Services: http://www.cms.hhs.gov