Michigan BCBS Receives Warning About Alleged Improper Marketing Practices of Medigap Policies
Michigan's Office of the Attorney General has issued a warning to Blue Cross Blue Shield of Michigan and its agents to stop what state officials believe are improper marketing practices for supplemental Medicare policies, the Detroit Free Press reports. The Medigap policies help pay for physician visits and other medical services that are not covered under basic Medicare.
In a letter sent on Wednesday to BCBS general counsel Lisa DeMoss, state Deputy Attorney General Carol Issacs said the office in recent weeks has received more than half a dozen complaints from seniors about inadequate marketing of the policies. Isaacs said BCBS, the state's insurer of last resort, and its agents "have been fervently marketing" the more costly Medicare Advantage products instead. According to the Free Press, monthly premiums for the basic Medigap policy cost $107, while more comprehensive Medicare Advantage plans in tri-county Detroit cost up to $297 per month.
John Selleck, a spokesperson for the attorney general's office, said that seniors who wrote in over the last five weeks said they had problems finding information about the Medigap plans on BCBS' Web site during Medicare's annual open enrollment period, which started on Oct. 15 and ends on Dec. 31. According to the Free Press, the Web site "prominently refers to the insurer's Medicare Advantage plans," but users had "no comparable and easy way to get Medigap information on the site's search function."
In a statement on Thursday, BCBS spokesperson Helen Stojic said the insurance company "fully responded to state and federal regulators on these complaints earlier this year and believes that the matters were resolved to their satisfaction." Since October, the company has distributed 9,000 Medigap plan kits and 1,600 new seniors have enrolled in the plan. An additional 4,000 seniors are expected to enroll in Medigap plans by January 2009, Stojic said (Anstett, Detroit Free Press, 12/19).
Legislation Delayed
In related news, state lawmakers on Thursday said there was no compromise on House and Senate bills that would revise state rules to give BCBS more flexibility in setting premium rates and called for further action to be delayed until next year, the Detroit News reports. The legislation is intended to offset BCBS losses for individual health policies and reduce state regulation. The state House and Senate have approved separate versions of the bills.
BCBS Vice President Andrew Hetzel said, "Until the Legislature acts to create a fair and balanced regulatory system that holds for-profit insurers more accountable for rejecting the sick and allows Blue Cross to better compete for younger and healthier individual subscribers, Blue Cross financial losses on individual insurance lines will continue to mount" (Heinlein, Detroit News, 12/18).
