Not everything Congress does is what’s right for you when it comes to Medicare.
There’s a little known provision in the Balanced Budget Act of 1997 that allows private Medicare + Choice insurance providers (now called Medicare Advantage) the right to enroll individuals in a private Medicare plan even though they did not request it.
The provision is known as “seamless continuation of coverage.”
The law says if a person enrolled in a private commercial medical insurance plan prior to their eligibility for Medicare “fails to elect to receive coverage other than through the organization, is deemed to have elected the Medicare + Choice (now called Medicare Advantage) plan offered by the organization.”
Most people who think they are enrolling in Medicare don’t know they have to drop their private commercial health insurance when they sign up for government coverage. Private coverage takes precedence. Even government sponsored insurance like traditional Medicare is dropped before the private plan. This can create a major problem when it comes time to pay medical bills.
During 2016, The Center for Medicare Advocacy reported a case where a lady living in the Southwest signed up for Part B of Medicare in September of 2015 so she could enter Medicare on October 1st -the month she turned age 65.
At the same time, she chose Traditional Medicare and signed up for a Medicare supplement plan with an effective date of October 1st. She was self- employed and the only person paying the premiums on her commercial plan which she dropped upon entering Medicare.
Once eligible for Medicare she had two surgeries- one in October and one in November of 2015. She lived in a rural area near the state line and went to the nearest hospital located in the adjoining state.
Following the surgeries, she was shocked when her doctor’s office called and told her the claims were denied by Traditional Medicare because she was enrolled in private Medicare Advantage. The Advantage plan disallowed benefit payments because services were performed at a hospital outside the plan’s network.
Since she had commercial health coverage through her insurance company before she joined Medicare, that same company was allowed to enroll her in one of their Medicare Advantage plans without her choosing to do so because she did not opt out within 60 days after the notification letter was mailed to her.
Now she was stuck with thousands of dollars in out of pocket medical charges and couldn’t remember ever receiving a letter to opt out. The harm done was financially related but often times patients lose their doctor if the doctor does not accept Medicare Advantage plans or is excluded from their network.
During the six month period prior to age 65, Medicare eligible prospects are bombarded with appeals from insurance companies offering their products, and most likely the letter of notice to opt out ended up in the waste basket and was never opened.
By now she and anyone else in this situation would wonder why the federal government would allow such a practice in the first place. Wendell Potter, former Cigna public relations executive and whistle blower on inappropriate practices of the insurance industry knew why.
“I am certain it was to benefit the insurers,” said Potter in an October 2016 Medicare.org article written by Josh Schultz about a similar case.
“Yes it could be argued that consumers would be ‘spared’ the challenge of making a decision, but the goal was to build the enrollment for the private alternative to Medicare.”
Once this sneaky ruse was exposed in October of 2016 by non-partisan media outlets, the Centers for Medicare and Medicaid Services (CMS) temporarily suspended applications from any new insurance providers able to offer “seamless continuation of coverage” to their policyholders eligible for Medicare.
But this unfair marketing ploy still exists.
According to CMS data, twenty-nine insurers in 16 states-including United Healthcare, Aetna, and some Blue Cross Blue Shield affiliates-are still allowed to do “seamless continuation of coverage” and nearly half of these companies were approved in the first eight months of 2016.
The American Medical Association (AMA) and other Medicare watch groups have urged CMS to rewrite the policies relating to “seamless continuation of coverage” to protect the Medicare population.
To my knowledge CMS has not acted on any changes-and, I’m not so sure they will after reading remarks made by Anthem’s CEO Gail Boudreaux to Forbes healthcare business writer Bruce Japson in his January 31, 2018 article.
Boudreaux said Anthem plans to focus on growing its Medicare Advantage business. Anthem, which operates Blue Cross and Blue Shield plans in 14 states, plans to bring the “Blue brand” further into Medicare, Boudreaux said.
That will be a way to leverage the Blue Cross brand from its commercial business into the Medicare space, executives said.
Does that mean the leverage involves “seamless continuation of coverage” tactics to achieve their goals?
