Rates down, but only for those in know

When Patti Redmond discovered in October that she was paying almost twice the going rate for her insurance policy, she called her company to ask them why.

A representative from the company, Sterling Insurance, explained to her that, yes, she was in fact paying an old rate, she said. She was being charged $340 a month for supplemental Medicare coverage; due to changes in the program, monthly rates for that plan had dropped to $185.

That had happened more than a year earlier, in June 2010. Unless, that is, you were someone like Redmond, a loyal customer of 10 years who had been through rate increase after rate increase after rate increase. If you were someone like Redmond, Sterling continued charging the old rate for the old plan, even after the state imposed new regulations to prevent that.

When Redmond called her agent to ask why no one let her know she could sign up for a much cheaper rate, he told her, “ ‘Why would we let people know?’ ” she said. “Those were his words.”

Redmond’s story is a reminder – in the midst of the political amnesia about what has caused the problems with health care in our country – of why some of us are reluctant to jump on the anti-gubment bandwagon when it comes to medical care. In the private sector – that magic realm of efficiency, profits, high quality, and justice for all – there is always someone waiting to charge you $155 more a month than you’re supposed to be paying.

But hey: Buyer beware!

Sterling didn’t do anything wrong when it charged Redmond those rates, at least if your idea of “wrong” is limited to “illegal.” In June 2010, following some changes in Medicare regulations, insurance companies began to split their markets for some supplemental insurance plans – which cover what Medicare does not. Dan Halpin, compliance analyst for the state Office of the Insurance Commissioner, said that the result was two pools of insured people over age 65: older people paying higher rates and younger ones ushered in with new rates.

Halpin’s office acted to put a stop to that; in September, new regulations took effect that require insurance companies to offer a single plan and price and stop ghettoizing the oldest customers. Still, any number of people are likely still enrolled in higher-cost plans; insurance companies must allow them to switch to cheaper plans but aren’t required to let them know about it.

The insurance commissioner’s website, www.insurance.wa.gov, lists plan rates, and people with supplemental plans, which are federally regulated, should check them to be sure they aren’t being overcharged.

“Are there some people who are (enrolled) under the old plan, who can go on our website and check these rates?” Halpin said. “Yes. They need to take a look.”

When Redmond spoke to her agent, she said, “I said, ‘Why wouldn’t they contact me if I could re-subscribe and get the lower rate?’ … He said, ‘Well, why should they?’ I said, ‘Maybe because of ethics?’ ”

Maybe because of ethics. A motto for our age.

I contacted Redmond’s agent, who said he couldn’t comment. Bert Kelly, a spokesman for Sterling based in Atlanta, told me that the company did charge her a higher rate prior to the 2010 changes, based on her age and risk pool, he said. But clients under those old plans were apparently not notified when rates were lowered.

As for what Redmond was told by her agent, Kelly said, “I don’t doubt Mrs. Redmond at all, but I find it a little hard to believe a customer service representative would have spoken to her in that manner, so I do apologize to her.”

Redmond has moved on, and who can blame her. A retired widow, she raised two sons in Spokane – Mike Redmond, a former pro baseball player, and Patrick Redmond, a hospital administrator in California. She was a Sterling customer from the moment she enrolled in Medicare a little over a decade ago. Seemingly every year, the rates went up – starting at $118 and rising steadily until it peaked at $339.

It wasn’t until she began investigating adding some coverage in October that she discovered she was paying way, way more than the regulated rate. After a couple of calls to an advocacy organization and Sterling, she decided she’d reapply for the plan under the lower rate with Sterling.

No one ever told her they were sorry. No one ever suggested there was anything wrong with charging a 10-year customer an unfair rate. And, certainly, no one ever offered to do anything crazy like reimburse her.

So she changed her mind once again. She took her money elsewhere.

“I just don’t want to do business with them anymore,” she said.