First it was Congress going
after health insurers. Now the Centers for Medicare &
Medicaid Services (CMS) are none too happy with them,
either.
Humana (NYSE: HUM) apparently sent out a
letter to its members essentially warning them that parts of
whatever health-care reform passes might not be in their best
interest. If the government cuts the Medicare Advantage
payment rates, for instance, insurers will have to increase
their premiums to make up the difference.
It seems completely reasonable for companies to want to
look out for their customers' interests, especially if doing
so in the companies' best interest, too. Further, companies
are allowed to spend money lobbying Congress, donating to
campaigns, and even buying advertisements to try to get
citizens to call their political leaders. Why is sending a
letter to its customers so bad, if that's how Humana wants to
spend its money?
Well, because these were Medicare Advantage members, a
program that's regulated by CMS. The agency didn't like it
that Humana was using protected Medicare mailing lists for
political reasons.
Of course, that's not how Republicans see it. They believe
CMS is putting a gag order on Humana,
Aetna (NYSE: AET),
Cigna (NYSE: CI),
UnitedHealth Group (NYSE: UNH), and the rest
of the companies that offer Medicare plans by not letting
them communicate with their members.
As long as CMS doesn't take a major action like not
letting Humana enroll new patients -- it has that power and
used it earlier this year on
WellPoint (NYSE: WLP) -- I can't see how a
ban on sending political commentary to their members is going
to be anything more than a minor inconvenience for the health
insurers.
It seems, however, that this is becoming a distraction in
Washington, and that could actually be a
good thingfor the insurers -- and their shareholders.
Was CMS correct in reining in the ability to use its
mailing list for political messages? Or should Humana and the
others be allowed to send what they want to their customers?
Let us know in the comments section, below. And come back
daily for coverage of the health-care debate to see how it
might affect you and your investments.
This article was originally published as
Witch Hunt, Round 2?on
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