Exposing Medicare and Insurance Sales Commission Scams

Posted on November 3, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

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Some Agents and Brokers May Be Cashing-In

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

According to the Associated Press, on October 25, 2008, Medicare Advantage’s agents stand to make $500 to $550 this year. This happens by enrolling a beneficiary into one of their HMO type managed care type plans, while the agents could make another $500 for every year the beneficiary stays with the plan. It represents a financial reward that is raising concerns that agents and brokers will work too aggressively to enroll people into HMO plans that don’t meet their health needs; or where traditional Medicare may be a better personal fit.

CMS to Take Action

Representative Peter Stark (D-California) has urged the Centers for Medicare and Medicaid Services [CMS] to consider capping the commissions, while Kerry Weems, the acting administrator for CMS, said the agency plans to take action soon.

Insurance Policy “Twisting” and “Churning”

According to the Dictionary of Health Insurance and Managed Care, and others:www.HealthDictionarySeries.com:

  • Policy Twisting is the use of trickery to get someone to lapse an insurance policy and purchase a new one; usually in another company.

  • Policy Churning is a related fraudulent practice where an agent tricks a policy holder to fund a new one with the same insurer. Important information about the full consequences of their action is dishonestly withheld.

Both tactics are typically done to increase sales agent/broker commission income.

Scam Alerts

Although much more common with life insurance policies, each state has an insurance department that will help you if you think you’ve been scammed. Visit their website or office and you’ll get help on what to do. Many reputable insurance companies will quickly compensate you once it’s established that you were a victim of such fraud. Make sure you don’t waste you time by complaining to an insurer’s branch office. Contact the main office for swift response.

Assessment

America‘s Health Insurance Plans [AHIPs], the trade group representing insurers, encouraged CMS to develop clear and consistent standards, while two of the major players in the program, Humana Corporation and UnitedHealth Group both said that they welcomed regulation of insurance agent commissions. WellPoint and Cigna are the two other major health insurance companies in this country.

Conclusion

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Posted on November 3, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

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