COLUMN: Beware of cold calls hawking Medicare plans

This is a story whose narrator must be careful not to blame the innocent.

The story begins with a Medicare beneficiary, early 70s, who like many Americans answers the phone even when the number isn’t recognized. It was a “cold call,” the beneficiary says, from an insurance agent. Here, it’s important to point out that the beneficiary has no record of who it was.

A Salem-area insurance agent? (Not likely.) An agent for one of those companies that sends oodles of mailers to Medicare beneficiaries? (Perhaps.) An agent for an insuance company? (Almost certainly not, given that such contacts are illegal unless they’ve had a prior relationship.)

The upshot is that the beneficiary changed prescription drug insurance, with the result that monthly pharmacy prices rose to the hundreds of dollars.

This was presumably because the caller obtained approval to switch insurance plans without checking whether the plan covered the beneficiary’s drugs. 

The Medicare beneficiary made an appointment with a Senior Health Insurance Benefits Assistance (SHIBA) volunteer counselor to see about changing insurance plans. In most circumstances, that would be impossible until open enrollment in the autumn, Oct. 15 through Dec. 7.

But asking an income question, the SHIBA counselor determined that the beneficiary’s limited income would very likely qualify for a Medicare benefit that permits one to change plans outside of open enrollment. They submitted an application to the Social Security Administration for the benefit, known as Low Income Subsidy or Extra Help. 

This story has several lessons.

  • If you’re vulnerable to a phoned sales pitch, it’s better not to answer the phone unless you recognize the incoming phone number. A caller who wishes to speak with you will leave a voicemail message.
  • It’s better to speak with an insurance representative whom you’ve chosen rather than one who has randomly chosen you.
  • If you do speak with a cold caller, protect yourself by getting a second opinion – from another agent whom you choose, from a SHIBA volunteer counselor, or by doing your own research on the Medicare website

This is not – not – to suggest that you should never do business with a stranger selling Medicare insurance. One SHIBA counselor tells about a Medicare beneficiary who was considering buying Medicare Advantage insurance from a company that had set up a table in a Salem store. After reviewing alternatives, the SHIBA counselor told the beneficiary that that would be the best plan for her. (It covered her prescription drugs, her doctor was in network with the insurance, and the plan’s patient co-pays were highly competitive.)

If you would like to make an appointment with a SHIBA Medicare counselor, or to ask a question to be answered here, please see the end of this column. 

You wrote something about challenges in moving from one Medigap insurance to another. Please elaborate.

Yes, rules govern moving from one Medigap policy to another, known formally as Medicare supplement insurance. Although one may elect to change Medigap plans at any time, most Oregon Medicare beneficiaries take advantage of the protections in Oregon’s birthday rule.

The birthday rule describes in detail how you may change Medigap insurance companies or Medigap policy types during a 60-day period surrounding your birthday. Using this rule, the company has to sell you a policy and cannot levy a premium surcharge because of a pre-existing health condition.

But you asked about challenges. If you have one type of Medigap policy, you are permitted to change only to certain other types. For example, if you have a Medigap Plan F or Plan G policy, you could change to any other type of policy. If you have a Plan N policy, you cannot change to any other policy type. The simple explanation is that you may go down in strength of coverage, but not up. This is fully described on page 2 of Oregon’s birthday rule fact sheet.

Jim Sellers of Salem is a certified Medicare counselor with the Senior Health Insurance Benefits Assistance (SHIBA) program. To ask a question to be answered in this column, e-mail [email protected]. To schedule a free SHIBA phone, Zoom or in-person appointment with a volunteer Medicare counselor, call 800-722-4134.