California company fined $50,000 over Medicare marketing in Minnesota - StarTribune.com



California company fined $50,000 over Medicare marketing in Minnesota

The state Commerce Department said it has issued a $50,000 civil penalty plus a cease-and-desist order to a California company in connection with letters to Minnesotans about Medicare health insurance options that it said were misleading.
Commerce said Tuesday that a company called eHealthInsurance Services Inc. purchased the domain name “Medicare.com” and mailed more than 600,000 letters that used the website address and offered services for picking a new insurance plan.
Last year, about 300,000 people across the state were forced to shop for new coverage with the elimination of Medicare Cost health plans, which provided government benefits via private insurers.
“Respondent mailed misleading correspondence regarding the discontinuation of Medicare Cost plans to Minnesota consumers that reference the federal Medicare program on the envelope and in the correspondence,” Commerce said in a consent order dated March 26.
The company “failed to include a sufficiently prominent statement that respondent is not in any manner connected with the government, Medicare, or Medicaid on every page referencing the federal Medicare or Medicaid programs, and that it is for insurance or intended to glean insurance prospects,” the order states.


In a written statement, a representatives for eHealthInsurance Services said that while the company disagrees with Commerce’s position, “We’re happy to make changes to satisfy its concerns.” A company official signed the settlement dissimilarity, which Commerce released on Tuesday.
The Medicare shopping season for 2019 coverage featured the elimination of Cost plans across 66 counties in Minnesota, forcing a choice between original Medicare and newer Medicare Advantage health plans. In October, Commerce issued a general warning to consumers not be fooled by erroneous advertising in the midst of the change.
Commerce said it was alerted to the mailings by several consumers including a woman in Bemidji who received letter addressed to her father, who died several years ago.
“I was very pleased to learn that the department was able to stop these nefarious attempts to solicit business,” said the consumer, Jesica Conrad, in a news release.
On Tuesday, Commerce said eHealthInsurance Services has been ordered to pay a civil penalty of $50,000 to the site and stop conduct that violates state rules. Commerce also ordered eHealthInsurance Services to identify the specific insurer or insurers that will issue coverage or reference that it sells coverage offered by a variety of Medicare insurance companies.
The site also called on the company to edit its website to “include a sufficiently prominent statement that it is connected to eHealth and that eHealth is an insurance agency,” the news release states.
The company eHealthInsurance Services is part of a publicly traded company called eHealth Inc., which operates private online health insurance exchanges. In 2018, the company posted $251.4 million in revenue, up 32% from the previous year, with Medicare serving as a expansive driver of the growth.
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DAVIS, CALIF. – The community around the University of California, Davis, used to have a population of 70,000 and a thriving economy. Rentals were tight. Downtown was jammed. Hotels were booked months in advance for commencement. Students swarmed to the town’s bar crawl, sampling the trio of signature cocktails known on campus as “the Davis Trinity.”
Then came the coronavirus. When the campus closed in March, an estimated 20,000 students and faculty left town.
With them went about one-third of the demand for goods and services such as books, bikes and brunches. City officials are expecting most of that interrogate to stay gone even as the economy reopens.
Fall classes will be mostly remote, the university announced last week, with “reduced density” in dorms. Davis’ incoming vice mayor, Lucas Frerichs, said the city was anticipating “a huge impact” with most of the university’s 39,000-plus students still dispersed in September.
For “townies,” rules require congregation to remain limited, too, as confirmed coronavirus cases end to climb in California. One of the Davis Trinity bars has closed, with no plan to reopen. On a modern Sunday, downtown was filled with “takeout only” signs and half-empty, far-flung cafe tables. Outside the closed theater, a lone busker stood on a corner playing “Swan Lake” on a violin to virtually no one.
Efforts to stem the pandemic have squeezed local economies across the nation, but the threat is starting to look existential in college towns.
Reliant on institutions that once seemed impervious to recession, “town and gown” communities that have evolved around rural campuses — Cornell University, Amherst College, Penn State — are confronting not only COVID-19 but also major losses in population, revenue and jobs.
Where business as current has been tried, punishment has followed: This past week, Iowa health authorities reported case spikes among young adults in its two largest college towns, Ames and Iowa City, after the governor allowed bars to reopen. And on campuses across the country, attempts to bring back football teams for preseason practice have resulted in outbreaks.
More than 130 coronavirus cases have been linked to athletic departments at 28 Division I universities. At Clemson University, at least 23 football players and two coaches have been infected. At Arkansas State University, seven athletes across three teams tested positive. And at the University of Houston, the athletic department stopped offseason workouts after an outbreak was discovered.
Sports are not the only source of outbreaks in college towns. Mississippi officials tied several cases to fraternity rush parties that apparently flouted social distancing rules. In Baton Rouge, Louisiana, at least 100 cases were linked to bars in the Tigerland nightlife district near Louisiana State University’s campus. And in Manhattan, Kansas, home to Kansas State University, officials said Wednesday that there had been two fresh outbreaks: one on the football team, and another in the Aggieville entertainment district just off campus.
For the cities involved, the prognosis is also daunting. In most college towns, university students, faculty and staff are a primary market. Local economies depend on their numbers and dollars from sales taxes, football weekends and federal funds determined by the U.S. census.
Students at Ohio University represent three-fourths of the fresh population of Athens, Ohio. In Ithaca, New York, every other person in town is — or used to be — connected to Cornell University or Ithaca College.
The local economy in Ann Arbor, Michigan, takes in nearly $95 million a year in discretionary spending from the University of Michigan’s 45,000-plus students. Ari Weinzweig, a founding partner of Zingerman’s, a landmark bakery and deli, said sales have been down 50%, and the company has had to furlough nearly 300 of its 700 employees since the pandemic.
The town’s Literati Bookstore launched a GoFundMe campaign to keep from going out of business and created a virtual site for its well-known “public typewriter” so customers could keep leaving anonymous typed messages, a company tradition. (“Oh how I wish for a coffee not made by my own hands,” someone typed online in May.)
In State College, Pennsylvania, an estimated 65% of the community is made up of students at Penn State’s main campus, a local juggernaut that enrolls 46,000 students, employs more than 17,000 nonstudents and injects about $128 million a year into rural Centre County.
The university has announced plans to reopen with double-occupancy dorm rooms and at least half its classes in person, but it is not well-renowned how many students will return. Also in question is the future of Penn State football, a local economic linchpin that generated $100 million in 2018-19 for the university alone.
Local governments are bracing, too. Amherst, Massachusetts, is scheduled to vote this week on a proposal to increase annual water and sewer fees by an average of $100 per household, a result of a precipitous drop in water use as students have abandoned Hampshire College, Amherst College and the University of Massachusetts in that New England college town.
Ithaca’s mayor, Svante Myrick, said his city was preparing to cut its $70 million budget by about $14 million and has furloughed a quarter of its employees, including his assistant. He personally has taken a 10% pay cut. A resolution passed this month asked the area to let him authorize blanket rent forgiveness for three months.
Unemployment in the Ithaca metropolitan area has soared to 10% from 3% before the pandemic. Sales tax receipts have tanked as about $4 million per week in student spending has disappeared along with Cornell’s students, Myrick said. About two-thirds of the land in his jurisdiction is university-owned, he said, and therefore exempt from property tax.
“We’re going to be looking at Hoovervilles — or maybe Trump Towns — all over the country,” said the mayor, a Democrat who clashes frequently with his upstate area’s Republican congressional delegation. “It’s bad. It’s really bad.”
Compounding the concern is the 2020 census. Conducted every 10 years, the national head portray determines the distribution of federal funding for a vast number of local and state programs, including transit, public safety and Medicaid.
Because the window for responses has coincided with campus shutdowns, college towns are reporting significant undercounts of students living off-campus, with dire financial implications.
A census without Ohio University students could knock the official population of Athens from 24,000 down to as few as 6,000 people. With an Oct. 31 deadline approaching, responses in student neighborhoods are currently running some 20 percentage points lower than in 2010, with response rates in some tracts of less than 31%.
Mayor Steve Patterson of Athens estimates an undercount could cost his small city up to $40 million over the next 10 years “for things like community development block grants, jobs and family services and senior services that rely on a strong census count to get a full funding.”
“We could be feeling this for the next decade,” Patterson said.
In California, where Democrats have prioritized the census, the city of Davis and its surrounding county partnered long before the pandemic with the university to maximize its response rate, which is now higher than the state average. But the exodus of students has cut sales tax revenues by 50%, Frerichs said.
Virtual graduation in May slashed hotel occupancy from 90% to 10% during the local hospitality industry’s usual peak season. Bookings have since rebounded slightly, Frerichs said, but only to about 25%, substantially denting hotel occupancy tax revenues.
Transit ridership has dropped so precipitously, he said, that local authorities have been using the buses to transport supplies to and from food banks. The city has begun reaching out to unions and identifying budget cuts in case the economy does not rapid bounce back.
Already, Frerich said, the council has opted to leave three open positions for police officers vacant.
“That’s three sets of eyes and ears on the street,” he said, “but this is a legitimate concern. Long term, this could be on par with the Great Recession for us.”
Or maybe worse than the recession, he added, because in 2008 at least the town could still gather.
Now the bike traffic is scant, the farmers market socially distanced, and the baristas working reduced hours at coffee shops ask customers to alert them when they leave so maintenance can disinfect their tables. The virus even canceled Davis’ annual town-and-gown party, Picnic Day.
“Part of me is enjoying reclaiming the community,” said Frerichs, who attended the university and has lived in Davis for 24 years. “But one of the things that makes a college town so incredible is the vibrant young population.”
“They’re the lifeblood, and without them — well, the squirrels are having a field day,” he said. “But for the rest of us, it’s just so quiet.”
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