Health care reform and lessons learned from Medicare Part D scams

By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

On January 1, 2006 the Medicare Part D prescription drug benefit took effect. Medicare Part D today helps nearly 24 million Americans afford their prescription drugs. The $49.3 billion (annual) program has undoubtedly helped many American consumers avoid having to make the difficult choice between paying the rent and buying critically important medicine.

Unfortunately, one of the by-products of this new benefit was an increase in scams targeting seniors unfamiliar with the new benefit. In 2006, consumers were suddenly faced with multiple insurers offering different levels of drug coverage, a situation that confused many at first. Unsurprisingly, scam artists took advantage of the confusion and high visibility in news coverage to launch a wave of Medicare Part D-related scams.

Such scams included telephone calls, unsolicited emails, and house visits to seniors to trick them into paying a fee to enroll in a Medicare Part D plan (it costs nothing to enroll), disclosing bank account information say that the benefit could be “paid” into the victim’s account, or claiming to enroll the victim in a Medicare Part D plan only to enroll them in a more expensive Medicare Advantage plan. (Click here to read more from the FTC about these scams.)

Regardless of the specific con employed, all of these scams took advantage of consumers’ unfamiliarity with the new benefit to defraud them.

Fast-forward to 2010: the recently passed health care reform bill will extend Medicaid benefits to millions of previously uninsured Americans, set up insurance “exchanges,” and send rebate checks to millions of seniors to close the prescription drug “donut hole” in the Medicare drug coverage program. These and other benefits will require a sustained consumer education effort to inform Americans about the benefits. However, these new benefits will also likely create consumer confusion. Combined with the saturation of media coverage of health care reform, this is likely to be a ripe target for scammers.

Indeed, only weeks after the reforms were enacted, fraudsters already seem to be taking advantage. A recent National Public Radio story:

Days after President Obama signed the $938 billion bill into law, a cable television advertisement exhorted viewers to call an 800-number so they wouldn’t miss a “limited enrollment” period to obtain coverage available “now that historic health care legislation has passed.”

And there have already been reports of door-to-door salespeople peddling “Obamacare” insurance policies.

This is likely to be just the tip of the iceberg. Medicare Part D covers only a fraction of those who will be affected by the new health care reforms. Tens of millions of Americans may be at risk.

The health care reform bills signed into law by President Obama included funds for consumer education and greater enforcement efforts. However, if the experience of Medicate Part D scams is any indication, these resources will be insufficient to meet the ever-evolving threat of opportunistic scammers. It will be up to consumers to educate themselves and those they look after to ensure that the coming wave of fraud victimizes as few consumers as possible.

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Critical first step in overhauling America’s health

Today President Obama signed the Health Care and Education Reconciliation Act, part of the historic health care legislation, at a community college in Alexandria, Virginia. The reconciliation bill signed today adjusts some of the health care legislation signed into law last Tuesday, and represents a “critical first step” in overhauling the health care system so it works for all Americans.

We at NCL applaud this new era of heath care reform, which NCL has been working towards for decades. We note that adjustments can and should be made to the health care legislation in the years to come to ensure that all consumers have access to high quality care. For more on what this bill means for consumers today and in the years to come, check the NCL Web site.

Watching votes on ‘most important step since Medicare’

By Sally Greenberg, NCL Executive Director

The actions taken today in the U.S. House of Representatives are as important as any in American history. Whether the United States will join the other 32 developed nations that provide universal health care to its citizens will be decided in the vote on the floor today in the House. The U.S. Senate voted the bill out on Christmas Eve last year, so the House will be working from that draft. When it passes – and I sincerely hope that it does – the Senate will have to give it a final okay, and then the bill will go directly to the President for his signature. Mr. Obama has said the bill is “the single most important step that we have taken on health care since Medicare” was created in 1965.

This issue has long been on the front burner for the National Consumers League. Florence Kelley – NCL’s leader for our first 32 years, thought her greatest accomplishment was the passage in 1921 of the Sheppard-Towner Maternity and Infancy Protection Act, which for the first time allocated federal funds for health care. Josephine Roche, NCL’s president in the late 1930s, wrote the first universal health care legislative proposal while a member of FDR’s administration. Pieces of her draft laid the groundwork for the Medicare and Medicaid programs.

The legislation is sure to fall short of the goals many of us have for a universal coverage. For example, NCL strongly supported the inclusion of a public option but that was removed under pressure from insurance companies and citizens who claimed they didn’t want “government making health care choices for them.” That seems like a dubious argument because the Medicare program – which provides health care to seniors – is hugely popular – and is a government-run health care program. I’m in the camp that believes that we can improve upon the basic protections this legislation will bring to many Americans and that we need to start somewhere.

The bill includes provisions for state-run insurance exchanges, in which small business and people without employer coverage can buy insurance that would meet new federal standards. The new law would prohibit denial of health care coverage because of pre-existing medical conditions, and Medicaid would be expanded to cover everyone with income at or below 133 percent of poverty level.

As of this writing on the Sunday morning before the vote, they still don’t have the votes to pass. But I’m convinced they will find them. It’s disturbing to read in the Washington Post that angry groups rallied against the bill and hurled epithets against black and gay members of Congress and shouted “Kill the bill.” Historically, the right and the business communities fought every federal social program, using demagoguery and outlandish claims about government takeovers. They fought Social Security, Medicaid, the AMA, minimum wage and hours regulations laws, and used Ronald Reagan to rail against the Medicare law in the 1960s. But our society and our citizens are far better off because these programs were passed, and the vast majority of Americans have come to appreciate their value. I believe they will soon come to feel the same way about universal health care.

‘Deeming’ health reform into reality

President Obama postponed his trip to Asia.  Speaker Pelosi and her staff are working overtime, trying to gather support for the bill passed by the Senate in December.   We’re still a bit optimistic that we will see health reform make it off the Hill for the first time in more than a generation.

Beyond reconciliation, the Democratic leadership believes that the “deem and pass” plan might be the best option.   The House would vote on a more popular package of fixes to the Senate bill; under the House rule for that vote, passage would signify that lawmakers “deem” the health-care bill to be passed.

You still have time to make your voice heard and to help move this legislation into law and improve the lives of every American.

Health reform a reality through ‘reconciliation’?

By Mimi Johnson, NCL Health Policy Associate

President Obama just released his proposed plan for health reform. This proposal follows last Thursday’s bi-partisan summit to explore health reform compromises and solutions.

In agreement with many Americans, the President suggests we have little time to waste in passing this bill and must move quickly. A likely solution for getting the bill to the President’s desk is to use reconciliation, which was also echoed by Senator Harkin. The reconciliation process was designed by Congress to quickly get legislation through Congress and is often used to reduce the federal deficit. It requires only a majority vote in the House and Senate, and debate is limited.

According to Senator Harkin, the House must first pass the health reform bill that was passed by the Senate in December before it can go through the reconciliation process in the Senate. Some on the Hill suggest this can be done before the President leaves for international travel on March 18; others suggest something might reach the President closer to Easter.

As the President’s plan to Congress reminded us, the reforms proposed will provide consumers with greater choice and control over their health care and lower costs (including reduced premiums), and will end discrimination against people with pre-existing conditions.

Health insurance reform: Should consumers foot the bill?

Update: at the press conference held by HHS Secretary Sebelius, a report, “Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System,” was released, calling for health care reform that would result in lower insurance premiums for consumers, as well as “placing additional oversight on health insurance companies to ensure that people get value for the premiums they pay.”

This just in: today, Health and Human Services Secretary Kathleen Sebelius will hold a press conference to illustrate the national problem of insurers significantly raising the insurance premiums, particularly of those buying coverage individually.

Last week, Well Point and Sebelius squared off after it was revealed that one of the company’s health plans in California, Anthem, intended to raise premiums by as much as 39 percent. While both sides cite different motives, it is clear that rate increases of this magnitude are unmanageable for many consumers. It also demonstrates the greater issue of sky rocketing health care costs.

The people of this country need reform. We hope that politics and profit can be put aside in the interest of the American people when President Obama convenes a bi-partisan health summit next week.

Health Reform Uncertainties

The election of Senator Kennedy’s successor has led to numerous discussions about the future of health reform, but advocates are encouraging Members of Congress—from both sides of the aisle—to keep their eyes on the prize.

“We need to put partisan concerns aside and work NOW to ensure that the system is reformed. The cost of doing nothing is unthinkable,” said NCL Executive Director Sally Greenberg.

Senator Kennedy, who lost his battle with cancer last summer, was a friend of consumers and workers; Senator Kennedy called upon the Obama Administration to reinstate the White House Office of Consumer Affairs and was a champion of workers, fighting tirelessly for minimum wage increases for working families and health care for all. In his honor and in the spirit and history of the League, NCL is committed to reforming a system to ensure that “everyone has access to affordable health care or the system will remain broken.”

For decades, NCL has been dedicated to achieving quality improvements to America’s health care system. In the 1930s, NCL’s Josephine Roche authored the first universal health care proposal and today, NCL is at the forefront of advocating for comprehensive health reform with legislation that is patient-centered and cost-efficient.

NCL encourages law makers on either side of the aisle to remember what this debate is about – improving the access to and quality of health care in America, for all Americans, addressing why we are overpaying for care that is not making us healthier.