What Are the Rules for Agents Who Sell Medicare Health Plans?
This article was updated on: 09/09/2018
The Centers for Medicare & Medicaid Services (CMS), which administers the Medicare program, has strict guidelines that private insurance companies must follow when marketing and selling Medicare plans. Familiarizing yourself with these rules may help you spot and avoid Medicare fraud before you become a victim.
Avoid Medicare fraud by knowing what a Medicare agent can’t do
All insurance agents selling Medicare plans must be licensed in the state where they’re making the sale. Below are examples of illegal marketing practices and Medicare fraud.
According to Medicare.gov, a licensed insurance agent cannot:
- Visit you at home without your permission.
- Cold call you unless the agent has a prior relationship with you.
- Leave flyers or business cards at your door or on your car windshield.
- Pressure you to enroll or switch plans.
- Endorse a specific Medicare plan.
- Sell you non-health related coverage (e.g., life insurance) during a Medicare sales call.
- Give you gifts worth more than $15, free meals, or cash incentives to enroll in a plan.
- Invite you to an educational event and then try to sell you a plan.
- Enroll you in a Medicare plan over the phone (unless you call the licensed insurance agent or broker to request enrollment).
- Enroll you in a Medicare Supplement plan if he knows you have a Medicare Advantage plan (unless the Medicare Advantage plan will end before the Medicare Supplement plan starts).
- Ask you to provide personal information, such as your Social Security number, Medicare number, credit card, or banking information (unless the agent needs it to verify eligibility or enroll you in a plan).
- Ask for referrals. You can give your friend or family member a business card, but he needs to call the agent directly.
What a Medicare licensed insurance agent is allowed to do
Now that you know what Medicare fraud looks like, here’s what is allowed. The licensed insurance agent can:
- Call you first only if you’ve given permission to be contacted (for example, if you’ve requested a follow-up phone appointment).
- Leave information at your home if you don’t show up for a scheduled appointment.
- Only discuss the types of Medicare plans you’ve agreed to hear about during a scheduled appointment (you must agree first either in writing or through a recorded phone call). If you want to hear more about other specific plans you haven’t agreed to beforehand, you’ll need to give permission.
- Call you after you’ve enrolled in a Medicare plan to discuss other coverage options, but only if the agent calling you is the same agent who enrolled you in the plan.
Common types of Medicare fraud
The Senior Medicare Patrol (SMP), a nonprofit organization funded by the Department of Health and Human Services (DHHS), is a great resource for learning more about Medicare fraud and how to prevent it.
According to the SMP, some of the most common types of Medicare fraud include:
- Calling to ask someone for his Medicare number, Social Security number, or bank information in order to renew an “expired” card. Remember, Medicare cards do not expire, and Medicare will never personally call you about a card renewal or replacement.
- Calling to notify you of a free refund, consultation, or medical equipment that you qualify for – if you’ll just provide your Medicare number or bank account info. This is a type of Medicare fraud where scammers try to steal your personal information in exchange for something “free.” Remember, if it sounds too good to be true, it probably is.
- Billing Medicare for medical services, supplies, or prescription drugs that you never got is a classic example of Medicare fraud.
- Pretending to represent the Medicare program or government in order to sell you a plan.
If you suspect Medicare fraud, you can report it by calling 1-800-MEDICARE (1-800-633-4227), 24 hours a day, seven days a week. TTY users should call 1-877-486-2048.
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