Nation’s fourth largest health insurer subject of federal investigation
Following the president’s speech on health care reform before the joint session of Congress, Humana, Inc.- the nation’s fourth largest health insurer -declared support for the president’s plan.
We felt like there was a great deal in the speech that’s consistent with our point of view, and we have worked very hard over the last few months for a bipartisan, comprehensive health reform solution. We’ll continue to work for that.
Via WLKY.com
Reasonable dialogue such as this might bring comfort to some but tends to raise eyebrows among the more cynical. After all, if the Administration and Congress are working to curb the excesses of the health insurance industry, why so much support from a major target of their efforts?
For the doubters among you, there may be good reason for your cynicism.
Today we learn that the Department of Health & Human Services has launched an investigation into Humana’s efforts to blatantly and, potentially, illegally scare the hell out of senior citizens through a mailer the company circulated weeks before the Obama speech. So, while Humana was publicly cheering Obamacare, they were quietly doing everything possible to undermine it.
Humana’s target? Medicare Advantage, the plan that out-sources the administration of Medicare to private insurance companies.
Both the White House and Congress have targeted Medicare Advantage as a primary source of savings to be accomplished in the effort to pay for health care reform, suggesting that $125 billion to $150 billion can be retained in Medicare’s coffers by eliminating the 14% overcharge Medicare Advantage programs bill Medicare for services that, were Medicare paying directly, would cost the government 14% less.
Humana has about 1.4 million Medicare Advantage enrollees, and the program accounts for about half the company’s revenues.
The Humana mailer, which focused squarely on the Medicare Advantage program, reads, in part -.
While these programs need to be made more efficient, if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable.
Via Google News
The government’s response comes from Teresa DeCaro of the Center for Medicare and Medicaid Services –
This information is misleading and confusing to beneficiaries. Please be advised that we take this matter very seriously and, based upon the findings of our investigation, will pursue compliance and enforcement actions.
Via Bloomberg
The government’s letter goes on to order Humana to cease and desist from issuing any further such mailers and to remove any pertinent references from their website.
Clearly, what the insurance companies say for public consumption bears little resemblance to their true agenda.
As the old saying goes, caveat emptor – buyer beware.
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How many years did it take to discover that the Student loan program was a money pit because of the middle man? In some cases privatization makes sense but most of the time…not so much.
Cease and desist clearly won’t cut it. If the cat is out of the bag, you have to put it back in the bag – you can’t just close the bag and wish it was inside.
Perhaps the Center for Medicare and Medicaid doesn’t want to be too tough on their partners, but if the message is false and misleading, the perp should take positive steps to undo the damage.
And I wonder why nobody is at a town hall screaming about this stuff…
Where does this lawlessness come from? Why does the management of such a large company believe that a mass mailing to over a million people will be ignored by law enforcement? Has not one of these companies in the recent past been monitored for compliance? I find this disturbing .. What the hell is going on!
I would love to see some enterprising reporters dig out the connection between the Humanas out there shaking us down and the Fox/Republicans happily and obviously doing their bidding.
My particular congressvarmint talks the GOParty line verbatim. When I look at his FEC docs, I can decipher some insurance money in there, but not to the extent I would’ve expected, considering the Puppet Master status the insurance industry seems to enjoy. Of course, my congressguy is a first-term nobody, so not worthy of many industry dollars, I guess.
But what about the big GOP congressional dogs? The ones who quote from “bipartisan” research groups that turn out to be owned by major health care companies? The ones whose every word and action sounds as if it were scripted for the purpose of maintaining a status quo where the insurance industry gets to call all the shots?
If the insurers were so blatant as to dump tons of campaign contributions into these people’s coffers, wouldn’t that already have been reported across country? Or have things gotten so bad at the newspapers that nobody’s running the traps anymore?
On the other hand, if the money isn’t being delivered blatantly and in the open, how is it arriving? These GOP shills have to be getting pay-off. You can’t explain it just in terms of Obama opposition, because they absolutely parrot the insurance industry line.
Which brings up another question. Does FoxNews come up with its phony town-hall events all on its own, or does it take news coverage “suggestions” from big corporations? Not that Rupert M. needs the money – maybe their “news” selection derives from cocktail time inside Murdoch’s social circle.
Just curious.
Bob Dunn -We do know that insurers have made huge campaign contributions to our representatives in Congress. Whether they are backing some of the Town Hall, Glenn Beck events by putting money directly into the pockets of participants, I guess we’ll never know. But probably not. There are enough wing-nuts out there more than happy to do it for free.
Your blog was written before President Obama’s appearance on David Letterman’s show last night. I thought he did his best job yet of describing the perils of a future with our current health-care system. The costs get higher in comparison with everything else, employers who insure the vast number of Americans have to make cuts to the policies, or people get laid off and lose their health insurance. Insurers make decisions to eliminate the sickest among, us reaping their profits from younger policy holders who by the law of average will not get sick. I watched Meet The Press last Sunday. The President was open to a point on most issues but both Senator Graham and Rep.Boehner sounded like guys who did not want any change to the status quo. Tom Medlicott.
What’s the legal authority for the government to stop someone from making a false statement about a government program? I thought in America people are allowed to spew whatever nonsense they want unless it’s commercial speech.
I think it would be providing false information about a medicare based package which would not be permitted. To draw it out, a medicare advantage provider could not promise a trip to a spa with every ten visits to your primary care physician without running afoul of CMM rules and regualtions.
In response to another comment. See in context »Rick,
This is slightly off topic, so feel free to direct me to a different forum for posting, but I’d love to hear your thoughts on a basic insurance exchange. For instance, an exchange which allowed you to buy and sell various insurance packages. One package may be only disaster insurance (e.g. bad accident forces you into intensive care etc.), while another package may simply cover routine physical exams, and yet another covers physicals and all imaging costs etc.
I’d imagine that if we can bundle up the most common usage patterns of medical care, and then put those onto a competitive exchange, then we’d get the best of both worlds — basic insurance could be had by all for cheap (or subsidized for the very poor), and for unions that have negotiated a higher standard of health insurance, they could get a more complete package. This would also force insurance companies to offer plans that can be compared apples-to-apples, and provide a natural means of price competition.
Any thoughts?
Off topic but interesting just the same.
It’s not a bad idea in theory. Where it might get a bit sticky is when it comes to chronic illness coverage which is really what results in the big money expenditures. So, a customer could probably shop for physicals, general health coverage policy, as you suggest, and find a competitive situation allowing them to pick what is best for them. I think you’re idea works, in this regard. But when it comes to buying your type 2 diabetes policy, it could get very ugly. Since most people would see the price and go, “nah…I’m not going to get diabetes” (despite the fact that I drink 15 Cokes a day and down Twinkies like water, they would not buy the diabetes coverage. They get diabetes, they have no coverage, you and I end up paying for it because society is not going to let a Type 2 diabetes patient just roast because they can’t afford to get their meds and see the specialist.
This is where I see the flaw. Specialized coverage for heart ailments, cancer and other chronic illnesses would cost a fortune and people wouldn’t buy it. When the get one of these diseases, it would be a disaster.
Interesting thinking, though. You might be able to come up with some refinements that could make it work.
In response to another comment. See in context »Some legal perspective on the issue from those more in the know… particularly regarding prior restraint, all that…
http://volokh.com/archives/archive_2009_09_20-2009_09_26.shtml#1253725442
Actually, it turns out to be simpler answer than what volokh is suggesting. As you would expect, Humana (like all insurance companies) has contracts with Medicare. The contracts require Humana to submit certain types of press releases and communications to medicare for approval prior to circulating. These were not submitted for approval. What is being investigated is whether or not they should have been. It’s not a first amendment issue or anything else – simple contract issue.
In response to another comment. See in context »