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Medicare Advantage: Deceptive Marketing Practices

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In 2003, “Medicare Advantage” (MA) became the new name for Medicare + Choice plans. These plans marketed themselves as giving Part C enrollees added benefits beyond original Medicare, at lower costs.

By Al Norman

Medicare Advantage Open Enrollment ended Dec. 7. That was the last date to pick or switch Medicare plans. Whether you are still in original Medicare, or if you enrolled in a Medicare Advantage plan, you have probably been receiving letters, postcards, text messages or TV ads promoting Medicare Advantage plans. Some of these companies may be deceptively marketing their plans.

In 1997, Congress created Medicare + Choice plans, which allowed private health insurance companies to be paid by the federal government to offer Medicare benefits through their own plans. In 2003, “Medicare Advantage” (MA) became the new name for Medicare + Choice plans. These plans marketed themselves as giving Part C enrollees added benefits beyond original Medicare, at lower costs. The 2003 law also created Part D, prescription drug coverage, and allowed Medicare Advantage companies to offer Rx coverage.

Some analysts warned that MA plans would eventually cover more people than original Medicare. The percentage of MA enrollment has doubled since 2010. As of 2022, more than 28 million people are in MA plans, which is 48 percent of the eligible Medicare population, and which accounts for $427 billion, or 55 percent of all Medicare spending.

 Congress hoped that MA plans would slow down the growth in Medicare costs, and create a more predictable budget. But research in recent years has shown that switching seniors to these private plans has cost taxpayers billions of dollars more than keeping them in original Medicare.

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A new report from the Majority Staff of the U.S. Senate Committee on Finance raises another problem with Medicare Advantage plans: deceptive marketing. The Center for Medicare and Medicaid Services reports that it received 39,617 deceptive marketing complaints in 2021, more than double the complaints in 2020. “False and misleading marketing advertisements and fraudulent sales practices undermine access to care and the trust beneficiaries have in the Medicare program,” the report says. “This investigation found seniors and people living with disabilities can experience higher out-of-pocket costs and difficulty accessing their providers after being enrolled in a plan without one’s consent or enrolled in a plan only to find out the agent misrepresented the plan’s benefits.”

 Investigators found that “beneficiaries are being inundated with aggressive marketing tactics as well as false and misleading information:”

  • 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.

 CMS offers these 3 warnings to consumers:

  1. Use caution if calling a TV hotline. These “helplines” will connect you with an agent or broker who does not have to tell you about all of your options. The Federal Medicare program does not advertise MA plans, including on television.
  2. If you have been enrolled in a new plan that doesn’t work for you, call 1-800-MEDICARE. Seniors and people with disabilities can also get no-cost counseling from the local State Health Insurance Assistance Program (SHIP). During the first three months of the year, you can also change your enrollment.
  3. Don’t provide your information on unfamiliar websites or to unfamiliar people. The Medicare Call Center (1-800-MEDICARE) and your local State Health Insurance Assistance Program (SHIP) office can help you understand your Medicare choices and enroll in a plan that will meet your needs.

 “We are seeing that marketing practices by private plans (or their agents and brokers) need to be reined in,” the Senate report concludes, “bad actors are…badgering seniors on the phone, confusing them on television, and inundating them with mountains of mail. An increasing number of marketing materials are fraudulent or deceptive, undermining beneficiary access to care and trust in the Medicare program.”

Email a link to this article to your Congress person and U.S. Senators. Tell them: “CMS has broad authority to regulate the marketing and enrollment activities of Medicare Advantage plans. Congress needs to urge CMS to do a better job of monitoring agents and plans to protect Medicare beneficiaries.”

Al Norman worked in the elderly home care services program in Massachusetts for nearly four decades. He has been writing opinion columns for 50+Life for almost as long.  


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