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CU Congratulates Representatives for Introducing the Prevention Medicare SCAMS Act of 2005

December 14, 2005
The Honorable Allyson Schwartz
423 Cannon House Office Building
Washington, DC 20515
Dear Representative Schwartz:
Consumers Union, the independent, non-profit publisher of Consumer Reports, congratulates you and Rep. Lowey for the introduction of the Prevent Medicare SCAMS Act of 2005. Your bill would help reduce marketing abuses in the huge new Medicare Prescription Drug Program and provide consumers with information about insurers who repeatedly violate marketing regulations.
We have received anecdotal stories of marketing abuses and are deeply concerned that there may be serious abuses occurring. There are mailings which make comparative claims that are clearly false. The news media has reported sales seminars where the benefits of a company’s plan have been exaggerated. With dozens of plans to choose from, Medicare beneficiaries are already overwhelmed—abusive and false marketing materials just add to the chaos and uncertainty.
We particularly appreciate your proposal to let consumers know which plans are not to be trusted. Because of the larger than expected quantity of plans and the lower than expected percentage of enrollees, we expect that in the fall of 2006 there will be a great deal of churning in the number of plans, the benefits they offer, and the premiums they charge. It is essential that consumers have some information in the fall of 2006 to make new choices based on quality, trust and honesty. Your bill will help fill this desperately needed consumer service.
As more information becomes available, Consumers Union looks forward to working with you on the passage of this and other legislation to improve the operation of this important new program.
Again, thank you for your leadership on these issues.
William Vaughan
Senior Policy Analyst
Washington Office