You may be surprised how easy it is for someone to enroll you without your knowledge in a Medicare Advantage plan. That's because with most insurance coverage, you have to write a premium check. But with a Medicare Advantage plan, which offers medical and drug coverage from a private insurer, you may not be asked to pay the premium because the federal government will pay it for you.

Unscrupulous insurance agents have taken advantage of this situation and made unauthorized use of Social Security and Medicare numbers to sign up "clients" without ever laying eyes on them. In other instances, seniors have been asked by an agent to sign a paper — ostensibly to let an agent get credit with his boss for having made a sales pitch. In reality, they're signing up for the product. Some agents have enrolled individuals by using their signatures from sign-in sheets at free-lunch seminars, or by posing as agents from Medicare, says David Lipschutz of California Health Advocates.

If you discover that you have been fraudulently enrolled in a Medicare Advantage plan, contact your State Health Insurance Assistance Program (go to www.shiptalk.org for local links). Counselors can help you determine your next step. Now is the perfect time to act; if you already have a Medicare Advantage plan with drug coverage, you have until March 31 to switch to another plan.

Also contact your state insurance department and attorney general's office, which can punish agents for sales abuses. "If you hear about somebody being handcuffed and put into a patrol car, it does have a deterrent effect," says Georgia's state insurance commissioner, John Oxendine.

In most cases, the agent will be punished, not the insurance company. Although insurers use high commissions — as much as $400 to $500 per person — to entice agents to push their Medicare Advantage plans, the companies blame rogue agents for sales abuses.

Last August, the Oklahoma Insurance Department did fine Humana $500,000 for using unlicensed agents to sell Medicare Advantage and Part D. But, in general, the federal Centers for Medicare & Medicaid Services is responsible for regulating insurers that sell the policies.

Some state regulators think the feds haven't done enough to crack down on abusive sales practices. For example, seven Medicare Advantage companies voluntarily agreed last June to suspend marketing their private fee-for-service plans (types of Medicare Advantage policies) in response to concerns about marketing practices. The companies — Blue Cross Blue Shield of Tennessee, Coventry, Humana, Sterling, United HealthCare, Universal American Financial Corp. (Pyramid) and Wellcare — were allowed to resume marketing after they took steps to protect against sales abuses.


Kimberly Lankford is a contributing editor to Kiplingers Personal Finance magazine. Send your questions to [email protected]