New rule would limit insurers contact with elderly, disabled

The rule is designed to make it harder to pressure Medicare beneficiaries into signing up for insurance products they don't need or want. It essentially restricts face-to-face solicitations to those initiated by the customer.

A new Medicare drug benefit began Jan. 1, 2006. Since then, participants and state insurance commissioners have complained that some agents use false information to enroll people into certain plans, particularly those offering comprehensive health insurance.

"We want to make sure that beneficiaries aren't pressured into sales," said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services "In parking lots, waiting rooms and those kinds of places, a salesman can create a pressure environment or a threatening environment where a beneficiary will agree to anything just to get away."

During congressional hearings, lawmakers urged the Bush administration to curb abusive marketing practices. The rule is unlikely to stop lawmakers' efforts to give states more authority to hold insurers accountable.

About 27 million people get coverage for their prescription drug needs either through a private insurance plan that offers only the drug benefit or through a "Medicare Advantage" plan that offers comprehensive health benefits. In some cases, people were enrolled in plans even after they made it clear they didn't want the product.

Advocacy groups said the rule is a step in the right direction, but it won't be enough. They want states to regulate the insurance companies that offer Medicare Advantage plans. Currently, states only regulate the activities of the agents selling the plans.

"CMS doesn't have the boots on the ground to enforce even good rules like this," said Paul Precht, policy director for the Medicare Rights Center.

But Weems said the rule also gives CMS authority to issue fines of up to $25,000 per beneficiary affected by the company's conduct. Previously, the fine was $25,000 per contract.

"That is an extremely powerful enforcement tool," Weems said.