A (Costly) Medicare Surprise for Seniors

Seniors, open your mail and read it carefully. What you don't know can hurt you.

A special Medicare provision that allows private health insurance companies to enroll individuals who become eligible for Medicare into their Medicare Advantage coverage is costing surprised patients lots of money, according to news reports. The little known rule, called "seamless conversion," means some health insurance companies are automatically signing members of its non-Medicare insurance plans into their Medicare plans when they reach 65, the age of Medicare eligibility.

Medicare rules require a health insurance company to send a letter explaining the new coverage, which takes effect unless the member opts out within 60 days, according to Kaiser Health News. But many seniors are tossing out these letters. They find out they've been auto enrolled only when they get a bill from a physician or a hospital.

The Centers for Medicare & Medicaid Services has said it will eventually release a list of insurance companies that have received approval for seamless conversion, but that has yet to happen. CMS has also declined to say how long the practice has been allowed. Cigna, Anthem and other Blue Cross Blue Shield subsidiaries also declined to discuss whether they are automatically enrolling beneficiaries as they turn 65.

Aetna, however, is expected to do the conversion for its Medicare-eligible members in 17 Florida counties beginning in November. They will give potential beneficiaries 90 days advance notice instead of the required 60 days to opt out.

UnitedHealthcare will also start to automatically enroll members of its Medicaid plans in Tennessee and Arizona into its Medicare Advantage plans, a spokeswoman said. And Humana has applied for federal permission to do auto-enrollment.

The process "will benefit people who want to stay with the same insurance company," Mark Mathis, director of Humana's corporate communications, told Kaiser Health. "It would simplify administration, eliminating a step in the process, and help maintain continuity with the same company."

But consumer advocates are demanding more transparency from CMS and the health insurance companies.

"It flew under the radar for quite a long time, and it's just beginning to gain more attention," said Gretchen Jacobson, associate director of the program on Medicare Policy at the Kaiser Family Foundation.

A recently released report by Kaiser found that many of these private Medicare Advantage plans published unreliable and outdated provider directories that are hundreds of pages long. What's more, these health plans covered half or less of actual hospital costs, leaving their members vulnerable in case of unanticipated medical needs.

In Miami-Dade, about 436,000 people have Medicare, and about 62 percent of them are enrolled in Medicare Advantage programs, according to CMS. Part of the private Medicare plans' popularity is due to their availability and diversity. Miami-Dade seniors, for example, can choose from 36 private Medicare plans this year, and 27 of those plans offer "zero dollar premiums," which means that beneficiaries pay little or nothing to be enrolled in those plans.

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