From this week's City Strobe...
Putting the ick in Medicare
What do you get when you combine a hopelessly complex Medicare system, a commission-motivated sales staff and confused senior citizens? Sweet, delicious profit, that’s what. At least if you’re Humana. The insurance giant’s agents got so greedy that they recently landed the company in the crosshairs of the U.S. Senate’s Special Committee on Aging.
The practices that riled the senators — a body notoriously difficult to rile — include tricking seniors into switching to Humana products they didn’t need, misrepresenting the coverage of the plans they sold, and — a classic in the annals of capitalism that ranks right up there with long-distance carriers — selling Humana plans that invalidated seniors’ Blue Cross supplemental Medicare coverage without their knowledge.
At issue are the Medicare Advantage Plans approved by Congress in 2004, which poetically combine the obfuscation of legalese with the bewilderment of actuarial science — plans so complicated that even the agents don’t understand them. The salesgoons were loosed by Humana to prey on seniors after just 16 hours of training.
In a near-Sarandon performance before the committee, Oklahoma insurance commissioner Kim Holland passionately described the abuses in her state, which included agents going door to door and into nursing homes and Wal-Marts to target senior citizens. The senators, who gamely discussed the insurance industry without using the word “slimeball,” threatened to hold the companies more directly responsible for the “abuses, deception and outright fraud” of their agents. Humana, lighting a cigar with a $100 bill, growled, “Hey, we’re an insurance company. That’s what we do.”
No, seriously, the company said it would beef up training for agents and implement a zero tolerance policy for crooked sales agents. To watch the testimony, visit aging.senate.gov.