Humana Inc is being investigated by U.S. Health officials for using "scare tactics" when contacting its Medicare Advantage health insurance plan customers. In Humana letter to its customer, the company warned customers about pending health reform legislation. The Centers for Medicare & Medicaid Services (CMS) has issued an order for Humana to halt all related outreach until the agency concludes its investigation.
Humana Inc. was founded in 1961 and is a Fortune 100 company that markets and administers health insurance. With a customer base of over 11.5 million in the United States, the company is the largest (by revenues) Fortune 100 company headquartered in the Commonwealth of Kentucky and has over 26,000 employees nationwide.
The letter that Humana sent out to its customers who are enrolled in its Medicare Advantage plans was signed by Philip Painter, M.D., Chief Medical Officer, Humana Medicare. A portion of this letter is below:
"With the media reporting daily on Congress' and President Obama's efforts to enact meaningful health reforms this year, many Humana Medicare Advantage (MA) members are contacting us with questions. Members just like you want to know what these reforms might mean for their Medicare health plan and how they can get involved to help protect Medicare Advantage."
"Leading health reform proposals being considered in Washington, D.C., this summer include billions in Medicare Advantage funding cuts, as well as spending reductions to original Medicare and Medicaid. 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."
Humana has one of the biggest Medicare Advantage businesses among private health insurers. Such plans aim to offer enrollees more options than traditional fee-for-service Medicare benefits but can also cost more.
Under current law, private Medicare plans are required to use at least some of the additional money they get above the costs of a minimum, guaranteed package of benefits to provide extras. So, many Medicare Advantage patients get things like eye care, foot care and hearing aids, which the standard program doesn't offer.
So, the Humana letter may have been dubbed a "scare tactic" but it also may have made a real point when it said, that if private plans get paid less, "millions of seniors and disabled individuals...could lose many of the important benefits and services that make Medicare Advantage health plans so valuable."
Even if this is realistic information on the part of Humana, Medicare officials were not at all happy. Senate Finance Committee Chairman Max Baucus had the Centers for Medicare and Medicaid Services fired off a letter to Humana ordering it to cease and desist with the mailings. The CMS warned similar health insurance companies not to do anything similar to the Humana letter.
"It is wholly unacceptable for insurance companies to mislead seniors regarding any subject -- particularly on a subject as important to them, and to the nation, as health care reform," Baucus said, one day before his committee takes up the legislation on Tuesday.
It reported 1.5 million people are enrolled in Humana's Medicare Advantage plans as of June 30. Overall, more than 10 million of Medicare's roughly 45 million enrollees opted for such plans in 2009, according to the Kaiser Family Foundation.
Senate Finance Committee Chairman Max Baucus has the Humana letter posted on his website. You can read it here.
Written by Cheryl Phillips
Providence, RI
Exclusive to HULIQ.com
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