Insurers warned about mailers on Medicare

The Obama administration warned insurance companies Monday that they could face legal action for allegedly trying to scare seniors with misleading information about the potential for lost benefits under healthcare legislation in Congress.

“As we continue our research into this issue, we are instructing you to immediately discontinue all such mailings to beneficiaries and to remove any related materials directed to Medicare enrollees from your websites,” said a notice from the Centers for Medicare and Medicaid.

Teresa DeCaro, an agency official, sent the notice to all companies that sell private Medicare coverage and stand-alone drug plans to seniors.

In one case, the Health and Human Services Department, which oversees the agency, launched an investigation of Humana Inc. after getting a complaint from Sen. Max Baucus (D-Mont.), a lawmaker usually viewed as a reliable ally of the insurance industry. Baucus also put together the Senate Finance Committee’s version of the healthcare bill.

Humana is cooperating with the investigation and stopped the mailer this month, the company said Monday.

Federal subsidies to private Medicare plans average about 14% higher than those involved in traditional fee-for-service coverage under the program for those age 65 and older. The healthcare bills pending in Congress call for reducing or eliminating the difference.