Some Seniors Surprised To Be Automatically Enrolled In Medicare Advantage Plans

By Susan Jaffe
Kaiser Health News, July 27, 2016

Only days after Judy Hanttula came home from the hospital after surgery last November, her doctor’s office called with bad news: Records showed that instead of traditional Medicare, she had a private Medicare Advantage plan, and her doctor and hospital were not in its network.

Neither the plan nor Medicare now would cover her medical costs. She owed $16,622.

After more than five hours making phone calls, she learned that because she’d had individual coverage through Blue Cross Blue Shield when she became eligible for Medicare, the company automatically signed her up for its own Medicare Advantage plan after notifying her in a letter. Hanttula said she ignored all mail from insurers because she had chosen traditional Medicare.

With Medicare’s specific approval, a health insurance company can enroll a member of its marketplace or other commercial plan into its Medicare Advantage coverage when that individual becomes eligible for Medicare. Called “seamless conversion,” the process requires the insurer to send a letter explaining the new coverage, which takes effect unless the member opts out within 60 days.

Medicare officials refused recently to name the companies that have sought or received such approval or even to say how long the Centers for Medicare & Medicaid Services has allowed the practice. Numerous insurers, including Cigna, Anthem and other Blue Cross Blue Shield subsidiaries, also declined to discuss whether they are automatically enrolling beneficiaries as they turn 65.

(David Lipschutz, a senior attorney at the Center for Medicare Advocacy) said giving beneficiaries the chance to opt out doesn’t adequately safeguard consumers. An insurer’s notification letter can easily be mistaken or overlooked in the deluge of marketing materials seniors receive.

“The right to opt out doesn’t exist if they didn’t get the notice or if they did get the notice but didn’t understand it,” he said.

We have provided numerous examples wherein CMS has provided the private Medicare Advantage plans with an unfair advantage over the traditional Medicare program, at a considerable cost to taxpayers. This is yet one more example. In a secretive process, CMS is allowing private insurers to automatically enroll their current clients in their Medicare Advantage plans without requiring them to opt in. Patients must understand what is happening and then take specific action to opt out if they would prefer to be enrolled in the traditional Medicare program.

The is one more step towards privatization of Medicare and the transition to a premium support program (voucher equivalent, with declining purchasing value over time). This is supported by anti-government conservatives and many neoliberals, but, worse, it is with the complicity of CMS.

Once we have a dominant market of competing private Medicare plans, the egalitarian nature of the Medicare program will have been irreparably damaged, and with it our hopes for an improved Medicare for all will have been dashed. The more complex the privatization of Medicare becomes, the greater the resistance to single payer since it “will not be feasible” to dismantle the administratively complex, expensive private health care financing system. So why is it now feasible for us to dismantle our efficient and less costly public Medicare program?

The feasibility argument of the privatizers is a con job. The longer we wait to move to single payer, the worse will be the transition.