11/23/2009 05:12 am ET | Updated May 25, 2011

Does Humana Have a Free Speech Right To Mislead The Elderly?

Late last week, Medicare officials admonished Humana for using Medicare customer lists to engage in political advocacy and lobbying. Monday, Medicare officials sent a memorandum to all Medicare insurance companies explicitly prohibiting them from doing the same. This action by the Center for Medicare and Medicaid Services (CMS) represents a major policy shift from one administration to another and could lead to a legal case with the potential to establish new legal principles within a contested area of First Amendment (free speech) law.

Political Or Commercial Speech?

Tuesday, Senate Minority Leader Mitch McConnell (R-KY) took to the floor of the Senate to argue, "This is American -- citizens, either as individuals or grouped together in companies, have a fundamental right -- a fundamental right -- to talk about legislation they favor or oppose in this country. This is the core of the First Amendment’s protection of speech."

However, Constitutional scholars agree commercial speech is not the "core" of the First Amendment's protection. Courts consistently give political speech the greatest level of protection under the First Amendment and commercial speech the lowest protection. Courts also hold political speech to the lowest standards of accuracy and commercial speech to the highest standards of accuracy. After that, it gets complicated.

Stanford Law School Lecturer Chip Pitts notes, "The power of companies and the possibility of commercially oriented powerful communications unfairly distorting the public debate and obstructing the best (or better) policy outcomes has been the rationale underlying regulation in this area for more than a century."

For more than 100 years, explains Pitts, many have regarded concentrations of power (e.g., corporations, unions) with a high degree of suspicion, which harkens back to the question of corporate personhood. Some legal theorists and political scientists contend that powerful actors can disrupt the political process and crowd out discuss and debate in the marketplace of ideas.

Currently, the Center for Medicare and Medicaid Services (CMS) does not include political communications in its Medicare Marketing Guidelines [pdf]. This is perhaps due to the question of Constitutional limitations on the regulation of political speech: The government can regulate speech that is deemed commercial (e.g., communications in the pecuniary interest of an insurance company) but not speech that is deemed purely political in nature. Spokespersons at CMS were unable to answer this question.

Falsities or Debatable Points?

In his book, Corporate Social Reponsibility - A Legal Analysis, Pitts points to a landmark Supreme Court ruling  that said, "there is no constitutional value in false statements of fact."

The question becomes, then, what is the truth? On one hand, Democrats claim health insurance reform would cut costs, not benefits, but Republicans claim that cost-saving measures in current health insurance reform proposals could result in benefit cuts. Insurance company mailers to Medicare Advantage customers are really repeating the same things members of Congress are sending to their constituents.

A number of Huffington Post readers have written in to let us know that they have been receiving letters and mailers from Republican members of Congress that say the same things that Medicare Advantage providers are sending to their Medicare customers (sometimes verbatim).

HuffPost reader Karen Coulter wrote in to say she received a three-page letter from Rep. Nathan Deal (R-GA) that says, "...seniors who are pleased with their current plan will lose their choice in selecting a plan which best fits their individual needs...."

Ed Adams of Port Saint Lucie, Florida sent us a copy of recently appointed Senator George LeMieux's (R-FL) weekly email update, which also claims that current health reform proposals would cut Medicare and Medicare Advantage.

But the Court has drawn a clear distinction between what a corporation can say and what an individual can say. An individual's right to deceptive speech is often protected while a corporation may be barred from the same deceptive speech.

To boil it down, whether or not the mailers sent by health insurance companies to Medicare customers are protected the First Amendment depends on two things: (1) whether the mailer is commercial or political, and if it is deemed commercial speech, (2) whether the mailer contains falsities or debatable points. These questions were posed to a number of experts, and the answer was always, "It depends." Experts do agree that, as a court case, this has the potential to establish significant changes in legal precedent.

Pitts, who is currently teaching a course in corporate social responsibility at Stanford, says, "Notwithstanding the law in this case, corporations especially if granted 'rights' and 'privileges' similar to those of individual citizens, have ethical duties of good citizenship that include communicating openly and truthfully, not actively interfering with regulation that’s truly in the public interest, and affirmatively trying to promote the authentic public interest of the societies of which they are part."

Protected Information or Customer Contacts?

CMS says that Humana and other insurance companies may have erred by misusing government-owned Medicare mailing lists. Under current regulations, Medicare beneficiaries' personal information, including contact information, is protected under the law and can only be used for very specific purposes: discussing current benefits/coverage. Anything outside of that scope is simply not allowed. Specifically, CMS prohibits lobbying.

The Humana mailer, like others, was sent in an envelope claiming to contain "IMPORTANT INFORMATION about your Medicare Advantage plan" and imparts urgency upon the recipients to "OPEN TODAY!"

Jonathan Blum, acting director of CMS' Center for Drug and Health Plan Choices said, "We are concerned about the recent mailings as they claim to convey legitimate Medicare program information about an individual's specific benefits or other plan information. We are concerned that, among other things, the information in the letter is misleading and confusing to beneficiaries, who may believe that it represents official communication about the Medicare Advantage program." Blum went on to say, "We are concerned that the materials Humana sent to our beneficiaries may violate Medicare rules by appearing to contain Medicare Advantage and prescription drug benefit information, which must be submitted to CMS for review"

Organizing and lobbying (astroturfing) by Medicare Advantage providers is not new. During the Bush years, Medicare Advantage companies routinely organized their customers, evening flying them to Washington, DC to lobby Congress directly. In fact, Medicare watchdogs have been asking CMS to regulate provider-to-customer political communications for years.

Others are arguing that CMS is acting in a political capacity and not treating all political communications equally. Congressman Dave Camp sent a letter to CMS pointing out that "no such pressure has been applied to those supportive of the President’s Medicare cuts." Camp points specifically to AARP who , he says, has also communicated with its Medicare customers advocating for health insurance reform but "has apparently received no such scrutiny from the Administration. CMS’ selective use of its regulatory authority, 'threatens the integrity of the agency and of our democracy.'"

UPDATE: I just received this statement from AARP in regards to the questions posed by Humana supporters asking whether AARP (who was not admonished by CMS) could also be using Medicare customer lists (like the ones used by Humana) to send political communications, "The [contact] lists used for AARP's advocacy efforts are created for that purpose from our entire membership. HIPAA regulations prohibit access to customer lists from health insurers. Therefore, we do not and could not create mailing lists based on whether a member has purchased AARP-branded health insurance."