Marketing Medicare Part D and Medicare Advantage Plans

January 30, 2006

To:

All Persons Engaged in Marketing

Part D and Medicare Advantage Plans

From:

John Morrison, Commissioner of Insurance

Re:

Marketing Medicare Part D and Medicare Advantage Plans

The Montana State Auditor's Office (Department of Insurance) has received complaints about

alleged misconduct by persons in connection with the marketing of Medicare Part D prescription

drug plans being offered through private carriers pursuant to the Medicare Modernization Act

(MMA). Therefore, we are reminding all insurance producers and other persons selling Part D and

Medicare advantage products of their obligations under Montana law.

According to the Centers for Medicare and Medicaid Services (CMS), the MMA does not preempt

state producer licensing laws. Persons marketing Medicare Part D or Medicare Advantage

products must have a Montana health insurance producer's license, and licensed producers

must comply with Montana laws and regulations, including those relating to prohibitions

against misrepresentation, churning, and twisting. For instance, it may be inappropriate or

harmful to sell a Part D product to a person who has already enrolled in a Medicare Advantage

Plan or who has access to an employee plan with better prescription drug coverage. [Title 33,

Chapter 18, MCA] CMS will refer complaints it receives about producers licensed in this state to

the Department of Insurance.

In Montana, any person who "sells, solicits, or negotiates insurance" is required to have a Montana

producer's license

son who has already enrolled in a Medicare Advantage

Plan or who has access to an employee plan with better prescription drug coverage. [Title 33,

Chapter 18, MCA] CMS will refer complaints it receives about producers licensed in this state to

the Department of Insurance.

In Montana, any person who "sells, solicits, or negotiates insurance" is required to have a Montana

producer's license. [§ 33-17-201, MCA] "'Negotiate' means the act of conferring directly with or

offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance

concerning any of the substantive benefits, terms, or conditions of the contract if the person

engaged in negotiation either sells insurance or obtains insurance from insurers for purchasers."

[§ 33-17-103(17)]

Producers who sell or replace Medicare supplement coverage are reminded that ARM 6.6.519

(Standards for Marketing) and 6.6.520 (Appropriateness of Recommended Purchase and

Excessive Insurance) apply to them. Misleading representations or incomplete comparison of

insurance products is illegal. All producers recommending the purchase or replacement of any

Medicare supplement policy shall make reasonable efforts to determine the appropriateness of the

recommended purchase or replacement.

Allegations of misconduct related to Part D marketing will be thoroughly investigated by

this office. Any proven misconduct will be prosecuted under the laws of this state.

If you have any questions, please e-mail Alicia Pichette, Deputy Insurance Commissioner, at

apichette@mt.gov .