TWO OF STATE'S BIG INSURERS SKIP ADVANTAGE PLANS

Nov 09, 2008 (The Wichita Eagle - McClatchy-Tribune Information Services via COMTEX) -- HUM | Quote | Chart | News | PowerRating -- Rural residents opt for supplement plans

A cup of coffee and maybe a cookie appear to be OK. So are ads and mailings. But providing a full meal or making a cold call are on the list of no-nos this year.

The annual fall Medicare marketing blitz is under way, as insurance companies try to woo the nation's 44 million senior citizens to private insurance plans that assume responsibilities for health benefits.

The plans are called Medicare Advantage plans, and they're offered as an alternative to the original Medicare. They usually have additional benefits but often require enrollees to use a network of providers. Medicare prescription drug plans also are being marketed.

But two major players in Kansas health insurance -- Blue Cross Blue Shield of Kansas and Preferred Health Systems -- are sitting out the game, saying they've not seen much interest in the plans.

For insurance companies, they're lucrative, because the plans get a generous government subsidy.

They can be lucrative for salesmen, too: Many brokers will earn $500 for signing up a new beneficiary, and that much for each year the beneficiary stays with the plan. California Rep. Pete Stark has asked the Centers for Medicare and Medicaid to consider capping commissions; many companies, he said, were raising commissions to levels "that far exceed any previous year's commissions."

Companies can't start marketing the plans until each Oct. 1, and they have to move quickly because beneficiaries can start signing up for them beginning Nov. 15. The sign-up period ends Dec. 31.

New regulations

More than a dozen companies are offering 41 Medicare Advantage plans in the Wichita area this fall.

Earlier this year, the federal agency issued new regulations on the marketing of the plans, telling insurance companies they could no longer lure potential customers with free meals and couldn't make sales contacts with noncustomers unless invited to do so.

Gail Miller, a vice president at Humana, said her company was using meetings and mailings to provide information to beneficiaries about plan changes. "But we can't call someone who has not asked us to call them."

Humana also has had a series of meetings to let plan representatives meet with customers and potential customers. Many are being held in restaurants.

"You can do refreshments, but you can't do a meal," Miller said. "It is kind of funny trying to decide, OK, what is light refreshments?"

Humana and other companies also have used mass media ads and mailings to try to reach potential customers.

The Kansas market

Blue Cross and Preferred don't offer Medicare Advantage Plans.

"This market definitely prefers the Medicare Supplement," or Medigap, said Dennis Manson, manager of sales support at Preferred.

Mary Beth Chambers, corporate communications manager at Blue Cross, said, "We just felt like it was not a program that was going to necessarily be better than what we offered" with Medigap plans.

Nationwide, more than 10 million of the 44.8 million people with Medicare, or about 22 percent, are in a Medicare Advantage plan, according to the Kaiser Family Foundation. It's a number that has been increasing since 2003.

They've not proved popular in the Wichita area. The Kaiser Family Foundation says 9,035 Medicare beneficiaries, of the 84,144 who were eligible, chose Medicare Advantage plans in 2008. That's 10.7 percent.

The numbers are even lower for the state as a whole: 33,780 beneficiaries have the plans, of the 416,167 potential customers -- 8.1 percent.

The Kaiser Family Foundation estimates that Medicare plan sponsors spent $46 million on advertising last year, with about 70 percent of that going to advertise Medicare Advantage plans.

Chambers said Medicare Advantage plans seem better suited to urban areas with lots of doctors and hospitals.

"A Medicare Advantage plan is not going to work out in Gove County or Logan County," she said, and even Wichita and Topeka don't offer enough competition among providers.

Preferred's Manson said, "Health care is a very local phenomenon, and what may work in Florida or California may not work in Kansas. We have chosen to tailor our product mix to what Kansans want."

Humana's Miller said it can be difficult to market Medicare Advantage plans in states such as Kansas, with few large population centers and lots of rural areas in between.

"Definitely your outreach is going to be different, and it's more difficult to do seminars" in rural areas."

Many older customers prefer face-to-face contact, she said. Both Humana and the Centers for Medicare and Medicaid have online tools to help beneficiaries compare plans, but those can be intimidating to some people.

Reach Karen Shideler at 316-268-6674 or kshideler@wichitaeagle.com.

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