"The government is investigating a major insurance company for allegedly trying to scare seniors with a mailer warning they could lose important benefits under health care legislation in Congress. The Health and Human Services Department launched its investigation of Humana after getting a complaint from Sen. Max Baucus, D-Mont., a senior lawmaker usually viewed as a reliable ally of the insurance industry.
"It is wholly unacceptable for insurance companies to mislead seniors regarding any subject — particularly on a subject as important to them, and to the nation, as health care reform," Baucus said Monday, disclosing the HHS investigation.
Humana Inc., headquartered in Louisville, Ky., is cooperating with the investigation and stopped the mailer earlier this month, company spokesman Tom Noland said Monday.
Humana is one of the largest private carriers serving seniors under a program called Medicare Advantage. About one-fourth of the elderly and disabled people covered under Medicare participate in the Advantage program, which offers a choice of private plans that usually deliver added benefits. Humana has about 1.4 million Medicare Advantage enrollees, and the program accounts for about half the company's revenue, Noland said.
Government experts say the private plans are being paid too much — about 14 percent more than it costs to care for seniors in traditional Medicare. The Baucus plan — and other proposals — would reduce payments to the plans, and the health insurance industry is fighting back. The Humana mailer focused squarely on the Medicare Advantage program.
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