Biden administration seeks to crack down on private health insurance plans

The Biden administration proposes a new crackdown on private health plans, which already cover half of Medicare enrollees, and restrictions on marketing practices to help older and disabled consumers in the federal insurance system get the care they want. . need.

Medicare Advantage plans will need to work harder to encourage customers to take advantage of additional benefits available to them, rather than companies simply using them as a selling point, according to a draft rule released Monday by the federal Centers for Medicare and Medicaid Services.

The proposal would also help Americans on Medicare drug benefits obtain biosimilars, which are less expensive versions of biologic drugs made from living cells or other organisms.

Health and Human Services Secretary Xavier Becerra told a conference that older Americans choosing Medicare “should not be subject to quick and easy marketing rules.” A news conference was held Monday to outline the proposal.

The proposed rules mark the second time in a year that the administration has sought to tighten regulation of Medicare Advantage, the private-sector version of Medicare that has surged in popularity in recent years. Late last year, the U.S. Department of Health and Human Services proposed a different set of reforms focused on limiting predatory marketing practices, including deceptive advertising, by insurance brokers and agents trying to sell private health plans to Medicare enrollees. The rule became final in April.

As President Biden seeks In his second term, his top aides have described the proposal as an aspect of “dinner table economics” they hope will appeal to voters in the election a year from now.

Medicare Advantage was created in 2003 as part of the same federal law that added prescription drug benefits to Medicare for the first time since the massive insurance program was launched in the 1960s as part of President Lyndon B. Johnson’s “Great Society.” . The traditional version of Medicare allows people 65 and older and people with disabilities to choose their own doctor and pay a monthly premium for outpatient care. Managed care plans in their privatized versions often offer additional benefits popular with older patients, such as vision and hearing services, but these plans often limit patients to smaller networks of health care practitioners who have Contracted to accept patients in a specific area. plan.

When Medicare Advantage was created, replacing some early forms of managed care Medicare, Republican majorities in both houses of Congress insisted that the government pay private plans higher than Original Medicare’s reimbursement rates to incentivize more Many plans to participate.

The motivation worked.This year, for the first time, Medicare Advantage enrollees accounted for just over half of all Medicare beneficiaries, or nearly 31 million people with private plans, and the typical Medicare individual has about 40 private health plans to choose from, a record high KFF, a nonpartisan health policy group, said there are options.

As Medicare’s popularity continues to grow, the privatized version of Medicare has attracted increasing scrutiny, including from congressional Democrats.

“This is based on underlying concerns about market disruption and aggressive marketing by insurance companies,” said Tricia Neuman, senior vice president at KFF, a health policy organization that oversees the Medicare Policy Project.

Specifically, the proposed rules would establish stricter guardrails that would limit compensation for insurance agents and brokers who provide advice to Medicare customers and set fixed amounts for such advice regardless of which plan a consumer chooses. White House National Economic Council Director Lael Brainard told reporters at a Monday press briefing that currently, while capped, some companies are paying agents and brokers substantial additional fees, such as golf trips, to direct their business .

Additionally, the rule change will require private health plans to notify individual health insurance customers of what supplements they have during the year. They can still receive benefits. According to an HHS fact sheet, the typical Medicare Advantage plan offers 23 health benefits not found in traditional Medicare, but utilization rates are low. The goal of the proposal is to “ensure that taxpayers’ substantial federal investments in these benefits actually benefit beneficiaries and are not used primarily as a marketing ploy,” according to HHS documents.

Another aspect of the proposal would require private Medicare health plans to expand access to mental health services by expanding the availability of behavioral health practitioners in offices and clinics, including marriage and family therapists and addiction treatment specialists.

The rule change will also affect Medicare Part D coverage, as the plan’s drug benefit is well known. The proposal would go further than current federal rules by requiring the sale of prescription drug coverage plans to help make it easier for patients to obtain coverage for biosimilar products.

The proposed changes announced Monday would be released during the annual Medicare enrollment period, which runs from mid-October to Dec. 7 each year. The proposal will be open for public comment for 60 days. The final version will take effect sometime next year, just in time for the 2025 Medicare enrollment period next fall.

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