According to a new investigation into deceptive marketing practices in the industry released Thursday by the Senate Finance Committee Democrats.
Many people say they have been put on diets without realizing it.
The report lists complaints from 14 states and a slew of marketing materials generated by insurers and the companies they hire to help sell private plans.
The plans are part of a program called Medicare Advantage that now enrolls nearly half of all Medicare beneficiaries. The committee says people both in traditional health insurance and those already in a private scheme have been inappropriately moved.
“It is unacceptable for this scale of fraudsters and scammers to be unleashed in Medicare, and I will work closely with CMS to ensure this dramatic increase in marketing complaints is addressed,” said Ron Wyden, a Democratic senator. of Oregon and the chairman of the committee, referring to the Centers for Medicare and Medicaid Services, the agency that oversees Medicare. “Medicare Advantage provides valuable plan options and additional benefits to many seniors, but it is essential to stop any tactics or actors that harm seniors or undermine their confidence in the program.”
Medicare Advantage has become a very lucrative market for health insurers. But many insurers selling such plans have been accused of exaggerating their customers’ illness, according to a New York Times review last month that found four of the top five insurers faced federal lawsuits accusing them of of fraud.
“Because it’s such a profitable line of business, they have an incentive to do more marketing,” said Tricia Neuman, senior vice president of the Kaiser Family Foundation, which is working on a review of TV ads by plans. . “And they have more money to do marketing, which increases revenue.”
Most of the behavior documented in the report came from insurance brokers or third-party marketing firms hired by the companies, not the insurers themselves.
The Senate report did not specify which insurers benefited from the behaviors described. But he identified similar deceptive behavior in several states and a growing number of complaints, suggesting the tactics weren’t limited to a small group of bad actors.
Industry trade groups have denounced these practices.
“America’s older adults and people with disabilities deserve Medicare Advantage (MA) plans that continue to provide better services, better access to care, and better value,” said Kristine Grow, spokesperson for AHIP, a industry trade group, in a statement. “Health insurance providers are clear: Americans must be protected from bad actors who engage in misleading advertising and marketing tactics.”
She pointed to the federal government’s strict oversight of industry marketing, including new rules that will require brokers to record their calls with potential customers and provide greater oversight of third-party marketing groups signing up new customers. .
The Senate report highlighted several aggressive practices that it said constituted fraud.
Five states said they were aware of brokers who had targeted people with dementia, and six states said people had purchased a Medicare Advantage plan without even knowing it.
Marketing firms in several states have sent letters to Medicare beneficiaries resembling correspondence from the Internal Revenue Service, the Social Security Administration or Medicare itself, according to the report.
The mailings are designed to generate leads for insurance brokers. Federal rules prevent cold-calling of Medicare beneficiaries. But once respondents call, click, or return a form, companies are allowed to call them repeatedly. The investigation found similar forms from several states that resembled tax documents, using the font and layout of an IRS form. A courier from Utah stated: “IMPORTANT-COMPLETE AND RETURN CARD BORNE PAID WITHIN 5 DAYS.”
The report also says a frequent refrain in TV ads and mailings was the idea that switching to Medicare Advantage would increase beneficiaries’ Social Security benefits. Some plans charge lower premiums than traditional health insurance, but most don’t. According to a study by the Medicare Payment Advisory Committee, only 7% of beneficiaries this year were enrolled in a plan offering such a premium reduction.
The report describes an Oregon man who signed up for a Medicare Advantage plan after hearing the change would increase his Social Security check by $135 per month. It turned out that his new plan didn’t cover prescription drugs and his Social Security income was unchanged because Medicaid was already paying his Medicare premiums. “He was amazed and very stressed when he went to the pharmacy,” according to a complaint cited in the Senate report. “He says he was never told that and would never have joined a plan” without the drug benefit.
Ten of 14 states said people did not know if their doctors or the drugs they were prescribed were covered by a plan. In Oregon, a patient was switched from traditional Medicare and a Medicare Supplemental policy to a Medicare Advantage plan by an agent who came to her home. The new plan did not include her mental health care provider in her network. His claims, previously covered, were denied.
A 94-year-old woman with dementia in Missouri was sold a plan that did not include the hospital or doctors she saw in her rural area, according to another complaint. She was forced to travel much further for her medical care.
Medicare Advantage plans have become increasingly popular. They are required to offer benefits similar to traditional health insurance, and many include extras like dental benefits, gym memberships, or lower premiums. But plans typically come with limited provider networks, which means switching plans could mean losing access to doctors or coverage for certain prescriptions. Most Medicare beneficiaries are allowed to switch plans once a year, during a period known as open enrollment, which this year began Oct. 15 and ends Dec. 7.
This is the time of year when commercials, direct mail and telemarketers are most prevalent. Medicare recently promised to increase its oversight this year and next, but the program’s growing popularity and looser regulations under the Trump administration appear to have led to increased complaints to Medicare.
The report said complaints to the Centers for Medicare and Medicaid Services more than doubled, from 15,497 complaints in 2020 to 39,617 in 2021. Several state insurance regulators also saw an increase.
“In some parts of the country, confused and embarrassed seniors have fallen victim to inappropriate marketing practices,” said Ceci Connolly, executive director of the Alliance of Community Health Plans, who wrote to Senator Wyden last month about concerns that people were being misled. in changing planes.
“It is very clear from the field experience of our members that it has increased significantly,” she said in an interview. Plans say members are transferred to competing insurers without their knowledge, including a plan in which a beneficiary was unenrolled four times before finally being allowed to stay.
David Lipschutz, associate director of the Center for Medicare Advocacy, which favors tighter plan regulation, said Medicare could be much more aggressive in enforcing rules against deceptive marketing.
“Plans could try to distance themselves from this marketing misconduct and say that we have no control over these agents and brokers or their brokerage firms, but CMS has been pretty clear that Plans is responsible for the conduct of these downstream entities,” he said.
Medicare has announced plans to start monitoring marketing materials more closely. Beginning with the next open enrollment, Medicare will review and approve TV ads before they air to ensure celebrities accurately portray plan benefits. (A widely circulated ad featuring Joe Namath, the former star football quarterback, has been edited to comply with regulations, according to the report.)
“CMS remains committed to the common goal of protecting people with Medicare from confusing and potentially misleading marketing while ensuring they have the accurate information needed to make the coverage choices that best suit their needs. “said Chiquita Brooks-LaSure, the CMS administrator. , in a statement thanking the committee for the report.
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