Open enrollment kicked off this week, and millions of older Americans are sorting through sometimes confusing or even deceptive marketing pitches for Medicare Advantage plans. The Senate Finance Committee addressed the problem in a Wednesday hearing.
“Every fall, Medicare-eligible consumers are bombarded with mailers, TV ads and phone calls rife with misleading and pernicious content,” testified Cobi Blumenfeld-Gantz, cofounder and CEO of the Medicare advisory firm Chapter. “The bad actors are typically not local brokers who live in each community; rather, they’re lead generators operating as marketing middlemen who traffic in scare tactics, imitate government agencies and inaccurately advertise plan benefits.”
Older adults at times have more than 100 plan options, and brokers help them choose the right one. But brokers can be incentivized by large insurance companies to aggressively sell plans that are a poor fit for the Medicare beneficiaries they are supposed to help. Brokers also sometimes collect private information that they sell to multiple insurance companies. These brokers tend to have a national scope, just like the large insurers they represent, unlike independent local brokers.
“The Centers for Medicare & Medicaid Services has recently implemented changes to rein in misleading Medicare Advantage marketing practices,” testified Sen. Robert Menendez, D-N.J., the subject of a recent corruption investigation. “Yet marketers are finding ways around these requirements. As a matter of fact, the number of complaints that have been filed nearly doubled. A recent Commonwealth Fund survey found that 10% of respondents reported that marketing callers would ask for their Medicare or Social Security number, which is not permitted under Medicare law. Further, while cold calling is specifically prohibited, three out of four respondents reported receiving unsolicited calls.”
CMS proposed regulations to prohibit the transfer of consumers’ personal information from one marketing middleman to another, but they were excluded from CMS’ final rule. Krista Hoglund, CEO of Security Health Plan, said CMS needs to better enforce the $611 maximum fee paid to brokers. She also said it would even make sense to create incentive bonuses for enrolling beneficiaries into high-quality or value-based plans, as long as payments are transparent.
CEO Chip Kahn of the Federation of American Hospitals supports the committee’s investigation of Medicare Advantage marketing schemes.
“Open enrollment season should not be open season on seniors, where health plans mislead the public on Medicare Advantage by overpromising and under-delivering,” he told Fierce Healthcare. “Abuse of prior authorization by plans results in vital, doctor-prescribed care being delayed or even denied. With open enrollment going strong, it is timely for the Senate Finance Committee to examine the marketing practices of the insurers offering Medicare Advantage plans.”