When Humana, one of the biggest private insurers offering plusher Medicare plans to seniors, warned some customers a health overhaul could eliminate benefits they like, the feds told the company to knock it off.
At issue is a mailing sent by Humana to some patients enrolled in its Medicare Advantage plans. Those are the private options that replace standard Medicare for about one in five beneficiaries who chose the option. (The Huffington Post got a copy of a Humana mailing you can read here.)
Medicare Advantage costs the government more and is a prime target for cuts by Democrats as part of a health overhaul. Analysts say the plans, on average, get paid about 14 percent more than it costs to provide benefits to patients.
The Humana mailing said if private plans get paid less, "millions of seniors and disabled individuals...could lose many of the important benefits and services that make Medicare Advantage health plans so valuable."
Under current law, private Medicare plans are required to use at least some of the additional money they get above the costs of a minimum, guaranteed package of benefits to provide extras. So, many Medicare Advantage patients get things like eye care, foot care and hearing aids, which the standard program doesn't offer.
Bye-bye extra money? Bye-bye extra benefits. So Humana does seem to have a point.The company agreed to stop the mailings, though.
So, as often as Democrats, President Obama included, say that an overhaul won't crimp the insurance that people like, there's no denying that folks enrolled in Medicare Advantage would see reductions under the proposals getting traction.
Medicare officials were not amused, however. At the behest of Senate Finance Committee Chairman Max Baucus, D-Mont., the Centers for Medicare and Medicaid Services fired off a letter to Humana ordering it to cease and desist with the mailings. For good measure, CMS told other companies not try anything like it either.
"CMS is concerned that, among other things, this information is misleading and confusing to beneficiaries, represents information to beneficiaries as official communications about the Medicare Advantage program, and is potentially contrary to federal regulations and guidance," wrote Teresa DeCaro of Medicare's Drug and Health Plan Contract Administration Group to Humana.
But this being Washington and that being Medicare, that was far from the last word.
This morning, America's Health Insurance Plans, an industry trade group, waded into the fray, expressing outrage that plans would be barred from communicating with their members at a time when proposed cuts "will have a devastating impact on the health security of the more than 10 million seniors enrolled in the program. If these cuts are enacted, seniors will face premium increases, reduced benefits, and, in some parts of the country, will lose access to their Medicare Advantage plan altogether."
And, sensing a chance to get, if not the last word, then at least one more, here comes House Republican Leader John Boehner. "would the Administration impose this sort of gag order if seniors were being given information promoting the Obama health care plan?" Boehner asked in a statement:
I don't think so. Seniors have a right to know about the cost and consequences of the Democrats' health care bills and Republicans will continue to tell the American people the facts about the nearly $500 billion Medicare cut that Democrats are proposing.