Oklahoma Faults Humana in Marketing of Medicare Plans
Oklahoma Insurance Commissioner Kim Holland on Monday said that she has ordered health insurer Humana to take corrective action against the use of improper sales practices to enroll Medicare beneficiaries in plans offered by the company, the New York Times reports.
Holland in an interview said that 68 Humana agents did not have the proper licenses to sell insurance in the state and that some agents enrolled Medicare beneficiaries in plans "they did not understand and did not want."
According to a report prepared by the Oklahoma Insurance Department, Humana agents in some cases enrolled Medicare beneficiaries in comprehensive Medicare Advantage plans, rather than the stand-alone prescription drug plans that they sought, and in others used "bait-and-switch tactics to secure the initial invitation" into the homes of beneficiaries. In some cases, Medicare beneficiaries who enrolled in Humana plans experienced confusion because they had dementia or other mental impairments, according to the report.
Humana investigated a number of complaints about the sales practices used by agents, but in many cases "the investigation was conducted more to mitigate, justify and defend the actions of the agent and the company," rather than to help Medicare beneficiaries, the report found. The report also found:
- Humana paid agents $250 in commission for each Medicare Advantage plan sold, five times the commission for the sale of each stand-alone prescription drug plan;
- Humana did not maintain a complete record of complaints from Medicare beneficiaries as required by state law; and
- Independent agents underwent a 16-hour training course before they began to sell Medicare plans offered by Humana, a program that "did not appear to be sufficiently comprehensive to fully cover a topic as complex as Medicare and the products which these agents would be selling."
Holland said, "Humana took advantage of a new market but did not adequately supervise its agents."
Thomas Noland, a senior vice president at Humana, said, "As the guardian of the company's reputation, I would know if there were any problems."
Janet Trautwein, executive vice president of the National Association of Health Underwriters, said, "A few bad apples have been behaving unethically. I make no excuses for them." She added, "They do not reflect the behavior of the majority of agents who work with seniors."
Karen Ignagni, president of America's Health Insurance Plans, said the group plans to implement new standards to ensure that agents provide "clear, complete and accurate information" to Medicare beneficiaries (Pear, New York Times, 5/15).