Testimony for the National Association of Insurance Commissioners Senior Issues Task Force Medicare Private Plans Subgroup Public Hearing on Regulation of Medicare Private Plans September 11, 2007
Submitted by
Janet Stokes Trautwein Executive Vice President and CEO National Association of Health Underwriters 2000 North 14th Street, Suite 450 Arlington, VA 22201 (703) 276-3806 jtrautwein@nahu.org
September 11, 2007
Good afternoon. My name is Janet Trautwein, and I am honored to have been asked to testify here today. I am the CEO of the National Association of Health Underwriters. NAHU is the leading professional trade association for health insurance agents and brokers, representing more than 20,000 health insurance producers nationally. Our members service the health insurance policies of millions of Americans and work on a daily basis to help individuals and employers purchase health insurance coverage. We have thousands of members across the country who specialize in the sale of “senior products,” including all Medicare-related insurance products such as Medigap and all of the options under Medicare Advantage and Medicare Part D. Before joining the staff of NAHU more than 10 years ago, I spent 17 years as a licensed health insurance producer and a principal of a health insurance agency located in Austin, Texas. I want to commend the Senior Issues Task Force for taking up this subject matter, which is a top priority for our association. NAHU feels that all Americans, including Medicare beneficiaries, should have a wide range of health plan choices available to them and be able to pick the policy that best suits their individual needs. NAHU also thinks it is crucial that all Americans have the ability to use licensed health insurance professionals to help them choose the health plan products that best meet their specific needs. The vast majority of licensed producers who sell Medicare-related products to seniors specialize in this unique market. These professionals spend countless hours advising their clients, answering questions and helping them select the best possible plan options based on their budgets and personal preferences. Our members ably help their senior clients make informed buying choices, and are able to answer questions and provide advice about plan benefits and cost-sharing requirements that are subject to annual changes. They are also an invaluable resource to their clients if the client’s plan decides to leave the Medicare market. NAHU is well aware of some recent publicity depicting a few “bad apples” in our industry who have been behaving in what appears to be an unethical manner concerning Medicare Advantage private fee-for-service product sales. However, it is important to note the vast majority of health insurance producers work very hard every day to find quality and appropriate health coverage at the best possible price for millions of employers, individuals and families. It would be a disservice to the thousands of highcaliber health insurance producers out there, and their millions of happily insured senior clients, if access to licensed health insurance producers was in any way limited. The actions of a dishonest few should not be interpreted as representative of our entire industry. NAHU members are committed to education. As a result, our association has spent considerable time, effort and resources educating our members about the rules concerning Medicare-related product sales, and we will continue to do so. To ensure that NAHU members are equipped with the most up-to-date and accurate information on marketing
National Association of Health Underwriters · 2000 N. 14th Street · Arlington, VA · 22201 · (703) 276-0220 · (703) 841-7797 FAX · www.nahu.org
Medicare plans, during the past year NAHU, along with America’s Health Insurance Plans (AHIP), established a four-part education program on Medicare, Medicare Part D and Medicare Advantage. The NAHU/AHIP course teaches the marketing rules and responsibilities of each program and, like all of NAHU’s many education programs, it covers and encourages ethical professionalism. This class has been approved for continuing-education credit in more than 40 states, and we are actively promoting the course to NAHU members and non-members alike. NAHU is also committed to working with the Centers for Medicare and Medicaid Services (CMS) and individual states on producer education, as we feel that there are many producers out there who may not specialize in Medicare or senior products and who are not NAHU members. To try to reach these producers, NAHU has published a vast amount of Medicare-related product sales information on our website, www.nahu.org, which is open to the public. We would also be happy to post any additional information on our site that CMS, the NAIC or individual state departments of insurance develop, as well as link to other sites or reach out to non-member producers for education purposes in collaboration with CMS, the NAIC and individual state departments of insurance. We would also be happy to help spread the word to seniors, to make sure they know the warning signs of an unethical agent and what to expect from a responsible health insurance producer. NAHU wants to be as helpful as possible to policymakers as they consider ways to sustain and enhance the integrity of the Medicare private plans and, in the process, protect beneficiaries from unscrupulous producers. Two initiatives in particular that we feel would help to improve the regulation of all Medicare private plans are the appointment of health insurance producers and the expansion of the Medicare Advantage/Part D open-enrollment window. In the vast majority of states, health insurance producers not only have to be licensed, but they also must be appointed with the carriers for which they sell products. This appointment information is made available to the state departments of insurance so that the state knows which producers are approved to sell which products offered by particular companies operating within its borders. While producers selling private Medicare policies are required to be licensed, under current law they do not have to be appointed. Some carriers have voluntarily completed the appointment process with their producers and provided this information to the states. NAHU feels that mandatory appointments for private Medicare plans would help the state departments of insurance, and help to weed out the number of unethical producers preying on this market. NAHU would also like to see the annual open-enrollment period for beneficiaries lengthened, perhaps from October 1 st through December 31st of each year. Millions of Medicare beneficiaries are asked to review their benefits and possibly change plans each year. Many of these beneficiaries need assistance with the open-enrollment process and are afraid of making a bad decision. Ethical producers need more time to personally counsel each client, but the limited open-enrollment time period makes it very difficult. Compounding the problem is that the Medicare open enrollment coincides with the holiday season, with Thanksgiving, Hanukkah and Christmas to work around. Also,
National Association of Health Underwriters · 2000 N. 14th Street · Arlington, VA · 22201 · (703) 276-0220 · (703) 841-7797 FAX · www.nahu.org
many Medicare beneficiaries (so-called “snowbirds”) maintain second residences and spend the colder months of November and December in warmer climates, making them less able to see a plan representative or agent at this time of year. CMS actively encourages Medicare beneficiaries and their insurance producers to complete the open-enrollment process as early as possible, as those who sign up late in the month of December are not able to be fully processed and have ID cards sent to them until well after their plan’s January 1 st effective date. Making the open-enrollment period a little longer and a little earlier in the year would make the process much easier on beneficiaries and those providing enrollment support. It also would enable more seniors to seek counsel from a high-quality insurance producer and not feel as susceptible to pressure and the aggressive sales tactics should they encounter a “bad apple.” Again, I sincerely appreciate the opportunity to speak with all of you today about this very important topic. If you have any questions, I would be happy to answer them. Also, if NAHU can be of further assistance in the future, please do not hesitate to contact me at (703) 276-3806 or jtrautwein@nahu.org. You can also always contact Megan Mamarella, NAHU’s director of state affairs, who regularly monitors the activities of this task force. Megan can be reached at (703) 276-3818 or mmamarella@nahu.org.
Respectfully submitted,
Janet Trautwein Executive Vice President and CEO
National Association of Health Underwriters · 2000 N. 14th Street · Arlington, VA · 22201 · (703) 276-0220 · (703) 841-7797 FAX · www.nahu.org