The NAIC works to mislead the health insurance industry

Consumers are plagued by false advertising for Medicare Advantage and other health plans. Insurance regulators are taking steps to identify and combat inappropriate marketing of these health plans.

Two state insurance commissioners presented a briefing on efforts to combat false advertising Wednesday at the National Association of Insurance Commissioners 2022 Insurance Summit.

TV ads featuring celebrities encouraging viewers to call a toll-free number to sign up for Medicare Advantage plans, and advertising for short-term, or “skinny” plans that don’t comply with the Affordable Care Act are two of the best. – well-known examples of inappropriate marketing of the health policy, the speakers said.

“We’re working on a cease-and-desist rule on these short-term plans, but it’s like a game of Whack-a-Mole,” said Franklin T. Pyle Jr., special deputy commissioner of the Delaware Department of Insurance.

The NAIC established a Task Force on Improper Marketing of Health Insurance (D) in 2021. Its mandate is as follows:

  • Liaising with federal and state regulators to provide assistance and guidance in investigating inappropriate advertising for health plans, and directing appropriate enforcement efforts.
  • Reviewing existing NAIC models and guidelines governing the use of lead generators in the marketing of health insurance products, and identifying models and guidelines that need to be modified or developed to address market trends.
  • Developing language within an existing model or creating a new model that would give countries the ability to take action against lead generators.

The task force is reviewing the Unfair Trade Practices Act, particularly regarding the definition of “insured lead,” said Martin Swanson, deputy director and general counsel of the Nebraska Department of Insurance.

Under Section 2 of the Act, “insurer” means any business or organization that advertises the availability of insurance, or purports to be, insurance products or services.

What the group is trying to do, Swanson said, is define a “lead generator.”

Section 3 of the Act states that it is an unfair practice for any insurer to create, publish, publish, disseminate or put before the public by publishing, communicating on the Internet, sending letters, or on the radio or TV advertising, advertising or words that they have. any false, fraudulent or misleading statement, representation or statement about insurance or insurance business.

Swanson said the task force wants to change the Section 3 language to include an insurance and insurance lead generator. “As it stands now, we have control over the producer but not the lead generator,” he added.

“It’s a broad language but it has to be because these fraudulent practices are changing,” he said. “Grandmothers are on Facebook looking at pictures of their grandchildren when they get hit by a Medicare Advantage ad.”

Swanson said his agency has heard from several Medicare beneficiaries who said they received calls from someone falsely claiming to be with the state Department of Aging and saying they need to change their Medicare plans. “It’s a lie,” he said.

Several insurers that offer short-term, or so-called “skinny” plans, have moved into the Medicare Advantage market and are offering seniors what Pyle called “no-frills plans.”

He said: “They think it’s easy to rip off an elderly person who thinks they’re getting a lot of benefits by switching to another plan.” “I don’t want to see our elders being lied to and taken away from their ideas to do useless things.

Health sharing service

The NAIC is also looking into shared health services, which are not required to comply with the ACA.

Pyle said the NAIC does not have jurisdiction over shared health services, but added “that could change” as other plans become ACA-compliant.

He pointed to Virginia’s Bureau of Insurance, which released a list of frequently asked questions that offer these plans. The series revealed that health care sharing ministries do not guarantee the payment of claims, which can leave consumers with higher medical costs. Providers who want to offer these plans need to make sure they understand their limitations and should explain these limitations to consumers so they don’t mislead them. Agents must also provide buyers with a legally binding disclaimer.

“Good intentions want to get rid of bad actors. We want to get rid of bad actors. This is good for everyone, especially consumers,” he said.

Susan Rupe is the managing editor of InsuranceNewsNet. He previously served as director of Communications Association of Insurance and was an award-winning reporter and editor. Contact him at [email protected]. Follow her on Twitter @INNsusan.

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