Aggressive & Misleading Marketing of Medicare Advantage

November 4, 2022

Summary: A US Senate committee issued a report documenting and condemning “widespread” abusive marketing practices for the private health plans known as Medicare Advantage. This follows NYT reporting on the Medicare Advantage “cash monster.” It’s time to recognize the failure of privatizing Medicare … and instead embrace single payer.

Deceptive Marketing Practices Flourish in Medicare Advantage
By the Majority Staff of the U.S. Senate Committee on Finance
Nov 3, 2022

Part I: Executive Summary

The Centers for Medicare and Medicaid Services (CMS) revealed earlier this year that the number of Medicare beneficiary complaints about private sector marketing for Medicare Advantage (MA) plans more than doubled from 2020 to 2021. The Senate Finance Committee … launched an inquiry in August 2022, collected information on marketing complaints from 14 states and found evidence that beneficiaries are being inundated with aggressive marketing tactics as well as false and misleading information, such as:

Seniors shopping at their local grocery store are approached by insurance agents and asked to switch their Medicare coverage or MA plan.

Insurance agents selling new MA plans tell seniors that their doctors are covered by the new plans. Seniors who switch plans find out months later that their doctor is actually out-of-network, and they have to pay out-of-pocket to visit their doctor.

Seniors receive mailers that look like official business from a Federal agency, yet the mailer is a marketing prompt from an MA plan or its agent or broker.

An insurance agent calls seniors 20 times a day, attempting to convince them to switch their Medicare coverage.

Widespread television advertisements with celebrities claim that seniors are missing out on benefits, including higher Social Security payments, in order to prompt seniors to call MA plan agent or broker hotlines.

Each one of these vignettes represents documented instances of aggressive or deceptive MA and Part D marketing practices that this investigation found to be widespread, not isolated events. Other examples submitted by the states are documented in this report.

The Committee received evidence of fraudulent and misleading marketing practices from states and other stakeholders – painting a consistent national picture. These issues were reported more frequently with respect to MA plans compared to stand-alone Part D plans. In addition, nine of the ten states reporting quantitative complaint information found an increase in complaints from 2020 to 2021 that mirrored the trend found by CMS.

Information submitted by states demonstrates that beneficiaries are inundated with fraudulent and misleading communications across all modes of communication (in-person, television, telemarketer, and robo-calls). An egregious example submitted by the states includes marketing materials designed to look like official communications from Federal agencies. A number of states also raised concerns with the use of “Medicare” in the naming and branding of marketing companies to suggest that a marketing company is representing the Medicare program. These practices are intentionally deceptive as they blur the lines between official government communication and private health plan marketing.

The investigation also uncovered a range of predatory actions. Agents were found to sign up beneficiaries for plans under false pretenses, such as telling a beneficiary that coverage networks include preferred providers even when they do not. Of particular concern to the Committee were reports across states of agents changing vulnerable seniors’ and people with disabilities’ health plans without their consent.

The burden of deceptive and predatory marketing practices falls unequally across the already vulnerable Medicare population. The Committee heard that unscrupulous actors are targeting individuals dually eligible for Medicare and Medicaid (so-called “dual eligibles” who are allowed to switch MA plans once every quarter) as well as individuals with cognitive impairments. False and misleading marketing advertisements and fraudulent sales practices undermine access to care and the trust beneficiaries have in the Medicare program.

Comment by: Jim Kahn

As I approached my 65^th birthday in May, the calls began. “This is the Medicare Medical Care Help Center” was the frequent opener. Guess what? They were not from Medicare, instead were telemarketers peddling Medicare Advantage plans. I also received – and continue to receive – numerous mailings. Lucky for me, I’m not cognitively impaired, and my University of California retirement supports a generous health plan that works for me and my family. I recognized this marketing blitz as high pressure sales, and ignored it. Reading the impressive Senate report, it turns out that CMS prohibits many of these marketing practices (such as private brokers using the “Medicare” name). Countless seniors have been fooled and harmed.

So, can we fix these problems? That’s what the Senate report recommends – better oversight. I excluded that portion of the Executive Summary, because I believe the problems with Medicare Advantage are far too pervasive and structurally embedded to be remedied with fine-tuning.

Medicare Advantage (MA) is a fundamentally flawed idea. As reported in the NY Times, MA plans overbill the federal government by tens of billions of dollars per year. Financial barriers to care for sick individuals are greater in MA than in traditional Medicare. Mortality for MA beneficiaries is highly variable, hurt by lower spending, and unrelated to quality measures. Recent letters to CMS list the problems (here & here).

Traditional Medicare is also under privatization assault. ACO REACH, despite its clever “equity” marketing, echoes the flawed MA model: it uses corporate “direct contracting entities” that will reap billions in profits as fiscal agents for capitated coverage. See here, here, and other HJM posts.

We’ve seen abundant evidence that privatization of Medicare is a disaster masquerading as a solution, to address a problem that never existed. Traditional (non-privatized) Medicare was and remains better – it is cheaper and has greater access to care.

Single payer – improved Medicare for All – is the right solution.