Medicare Part D

COMMONWEALTH OF KENTUCKY
OFFICE OF INSURANCE
Frankfort, Kentucky

BULLETIN 2005 - 03

MEDICARE PART D

November 3, 2005

THIS BULLETIN IS FOR INFORMATION PURPOSES ONLY. 

Effective Oct. 1, 2005, marketing activity for the new Medicare prescription drug benefit, Medicare Part D, has been permissible. According to the Centers for Medicare & Medicaid Services (CMS), only Kentucky licensed insurance producers may engage in marketing activity. Thus, state law and regulatory provisions regarding producer activity apply to the marketing of Medicare Part D.

CMS has received complaints about alleged misconduct by licensed producers with regard to Medicare Part D marketing. CMS will refer complaints it receives about producers licensed in this state to the Kentucky Office of Insurance. This bulletin reminds licensed producers that they are subject to all Kentucky laws and regulations, including those relating to the duty of good faith and fair dealing, the suitability of sale, and the prohibitions against misrepresentation, churning, and high pressure sales tactics.

We view with a high degree of skepticism the use of a lead relating to Part D marketing activity to cross-sell other insurance products of any type. The new Part D benefit is fundamentally confusing for the Medicare beneficiary. It would be unwise for the producer to take advantage of the Part D lead to sell other insurance products to a Medicare beneficiary for which he or she may not be suited.

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 Kentucky relating to producer licensing.

Any questions can be addressed to Ray Perry, Director of Consumer Protection and Education Division, 502-564-6034.

          /s/ R. Glenn Jennings                   
R. Glenn Jennings, Executive Director
Kentucky Office of Insurance

          11/03/2005                                     
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