A recent Senate committee report elevated concerns about deceptive marketing tactics in Medicare Advantage plans. While the number of beneficiaries more than doubled in the last 15 years, the amount of marketing complaints also doubled—in just one year.
Medicare Advantage members don’t need Congress to tell them about these problems. They have their own experiences with misleading practices.
In February 2020, I wrote an article for Forbes.com about the half-truths of Medicare Advantage commercials. Since then, little has changed and, today, there are even more celebrities in more ads peddling the supposed benefits you deserve, not the ones you need.
The deceptive tactics
The committee collected information from 14 states and “found evidence that beneficiaries are being inundated with aggressive marketing tactics as well as false and misleading information.” The report included numerous examples. And, once again, I didn’t need to read that because I have recent first-hand experience.
I got a mailer with a two-inch headline that read, “A Medicare Advantage plan that gives you $1500 back each year.” This was in my mailbox, so it must apply to me, right? I decided to fact check it. The Medicare Plan Finder identified six plans in my ZIP code, sponsored by the insurance company responsible for the mailer. On the “Plan Details” page, I found three that offer premium reduction (commonly known as the Medicare giveback benefit). It was more challenging to find out how much the benefit is worth. I clicked on “Plan Website” and then eventually found the Evidence of Coverage for each plan. One plan’s benefit is $50, the other two—$25. If I could enroll in all three plans, I would get only $1,200 back. There is no plan in my area that gives back $1,500. That’s deceptive.
Here’s a second example. Frank from Your Health Care Benefits called. (I could not find any company by that name.) He wanted to tell me that I have been qualified for the new Medicare Savings Program, with low-cost prescription drug plans, zero copays, and full medical coverage at no cost to me. My ears perked up when I heard Medicare Savings Program because there really is such a program. (It helps those who meet income thresholds with Medicare premiums and cost sharing.) However, Frank was not talking about this; he was promoting Medicare Advantage. When I started to ask questions, he disconnected.
The devastating results
The committee found widespread practices, such as the use of “Medicare” in the company’s name or in mailers that appeared to be official government documents, with devastating results for beneficiaries. Here are two examples from the report.
After seeing a commercial, a beneficiary called the number and learned that he could get a $135 monthly giveback benefit. He signed up during the call and later discovered the plan did not include prescription drug coverage. He would have to pay full cost for his medications.
Another beneficiary was switched into a new plan and did not realize that her current doctors were not covered under that plan’s network. She would be responsible for the bills.
The report includes several recommendations for the Centers for Medicare and Medicaid Services (CMS), the federal agency that administers the Medicare program.
- Conduct regular proactive oversight of marketing materials to ensure they are not purposefully misleading.
- Require agents and brokers to adhere to best practices attesting that they have discussed what providers, facilities and prescription drugs may be out-of-network.
- Prohibit Medicare Advantage plans from contracting with agents and brokers who call beneficiaries multiple times a day for multiple days in a row promoting benefits that are not available to the beneficiary.
- Use CMS’ enforcement authority to hold bad actors accountable.
The new protections
These recommendations sound great but they do not carry the weight of law. It is up to CMS to carry through and implement them. But while we wait on that, the wheels have already been set in motion to fix some of these issues. The Senate report did not address these two significant changes.
1. A new law took effect on June 28 that requires insurance agents, brokers, and other third-party marketing organizations (like the ones that sponsor all the TV ads) to:
- Record all calls with beneficiaries in their entirety, including the enrollment process.
- Disclose to beneficiaries that their information will be provided to a licensed agent for future contact.
- Inform beneficiaries that they are being transferred to an agent who can enroll them in a plan.
2. Starting January 1, 2023, CMS must approve all television ads in advance and will review ads already on air to ensure they meet all marketing requirements.
The bottom line
These new rules and recommendations will limit your exposure to deceptive material. But, ultimately, it’s up to you. You best protection will be to follow some simple dos and don’ts.
- Do not read any promotional materials or watch any commercials. Turn off the TV or mute the commercials. Recycle the mailers you get.
- Do research plans. Start with the Medicare Plan Finder and review the plans’ Evidence of Coverage.
- Do not discuss your situation with a random caller.
- Do turn to unbiased sources, such as your state Department of Insurance, State Health Insurance Assistance Program (SHIP), and the Senior Medicare Patrol (SMP).
- DO NOT CALL the number on the screen.
- Do call the plan directly or deal with a trusted independent agent.
When there is money to be made, everyone needs to be careful. In 2021, payments to Medicare Advantage companies totaled $350 billion. In 2022, CMS set the national maximum commission for the initial sale of an Advantage plan at $573 and $715 in California.
Now, the vast explosion of mass media platforms, including television, and the anonymity that it allows (think Frank with a company that doesn’t exist), makes Medicare beneficiaries easy targets. Beware, be wary, and cross your fingers that substantial changes will protect beneficiaries.