The window of Medicare open enrollment for 2023 closes in a bit less than three weeks, but the marketing push for Medicare Advantage plans is still in high gear. Medicare Advantage plans, as you probably know, are government-sanctioned health care plans offered by private firms to take the place of regular Medicare. As you evaluate your health insurance options for 2024, chances are you’ve been bombarded by aggressive marketing from companies touting their MA plans.
Here at the Blog, we know that few things are more important to your peace of mind than knowing you have the right medical plan to protect your health and that of your spouse or partner if you have one. And don’t get us wrong: for some seniors, these MA plans can provide excellent coverage at an affordable cost. But all too often, some of the firms behind these plans are guilty of marketing tactics that are exaggerated at best and fraudulent at worst.
One year ago here on the Blog, we featured this scathing article from The Fiscal Times, written by editor in chief Yuval Rosenberg. The article appeared under the headline, “Medicare Advantage Marketing Rife With ‘Fraudsters and Scam Artists’.” It’s an eye-opener – and it’s also a cautionary tale not to believe all the hype during open enrollment. Let’s take a look.
Medicare Advantage Plans Hyped by D-List Celebrities
Writing in The Fiscal Times, Rosenberg begins, “You’ve probably seen TV ads featuring D-list celebrities pitching Medicare Advantage plans by claiming that seniors may be missing out on valuable benefits. But Medicare beneficiaries are also being inundated with other aggressive — and often deceptive — Medicare Advantage marketing tactics.” This is according to a report released last year by Senate Finance Committee Democrats.
Rosenberg provides the following examples from the report. How many have you encountered this enrollment season?
- Seniors shopping at their local grocery store who are approached by insurance agents and asked to switch their Medicare coverage or MA plan.
- Seniors being told by insurance agents that their doctors are covered by a new plan, only to find out later that their doctor is not in network – and they’re stuck paying out-of-pocket for a visit.
- Seniors receiving marketing mailers designed to misleadingly look like official communication from a federal agency such as the Internal Revenue Service, Social Security Administration or Medicare.
- Seniors getting flooded with as many as 20 calls a day from an insurance agent trying to convince them to switch their Medicare coverage.
Deceptive Practices in Medicare Advantage Marketing “Unacceptable”
Sadly, according to the report and based on information from 14 states, these marketing practices are fairly widespread and common, not merely isolated events. Rosenberg writes, “[The report] said that five states had shared examples of insurance brokers targeting beneficiaries with cognitive impairment and six states provided examples of people being signed up for Medicare Advantage plans without knowing it.”
Consumer backlash is also on the rise. “[The report] also noted that the number of beneficiary complaints about Medicare Advantage marketing received by the Centers for Medicare and Medicaid Services (CMS) more than doubled from 2020 to 2021,” says the article.
Thankfully, these deceptive practices are being noticed. Senator Ron Wyden (D-OR), chair of the Finance Committee, said in a statement, “It is unacceptable for this magnitude of fraudsters and scam artists to be running amok in Medicare.” The Senator promised to “be working closely with CMS to ensure this dramatic increase in marketing complaints is addressed. Medicare Advantage offers valuable plan options and extra benefits to many seniors but it is critical to stop any tactics or actors that harm seniors or undermine their confidence in the program.”
Medicare Advantage Insures Nearly Half of Beneficiaries
Rosenberg explains, “Under Medicare Advantage, sometimes called Medicare Part C, the government pays private insurers to cover health benefits for seniors. Such plans have grown in popularity and will soon cover more than half of Medicare enrollees. They’re also extremely lucrative for insurers — but as The New York Times reported recently, most large insurers in the program have been accused of fraud.” (Please note that accessing the New York Times article may require a subscription.)
The reason for the aggressive marketing is simple: profit. “For insurers that already dominate health care for workers, the [Medicare Advantage] program is strikingly lucrative,” the New York Times article reports: “A study from the Kaiser Family Foundation, a research group unaffiliated with the insurer Kaiser, found the companies typicallyearn twice as much gross profit from their Medicare Advantage plans as from other types of insurance.”
Tricia Neuman, a senior vice president at the Kaiser Family Foundation, told the New York Times, “Because it’s such a profitable line of business, they have an incentive to do more marketing. And they have more money to do marketing, which increases revenue.”
Caveat Emptor: Seniors Warned to Exercise Caution, Get the Facts
Open enrollment for 2024 Medicare plans is still ongoing until December 7th. Rosenberg writes, “Seniors are advised to be on the lookout for potential scams and exercise caution if calling a number advertised on television or clicking on a sign-up link. The report says seniors can also call 1-800-MEDICARE for help if they think they’ve been enrolled in a plan that’s not right for them.”
But aside from recognizing if you’ve been scammed or manipulated, the Senate has its eye on making more systemic changes to cut down on these scams, “including strengthening requirements that were loosened under the Trump administration, monitoring disenrollment patterns and then holding bad actors accountable, implementing stronger rules for Medicare marketing, and promoting legitimate sources of information.”
And what about those D-list celebrities and their ads? “Medicare has told [insurance] plans it will begin policing marketing materials more closely,” the Times reports. “Starting next open enrollment, Medicare will review and approve television advertisements before they air to make sure celebrities accurately describe the plans’ benefits.” Seems like it’s a bit late – but a good move nonetheless.
Follow-Up: Is Medicare Advantage Marketing Getting Any Better?
Last spring, CMS issued new guidelines attempting to rein in the marketing excesses associated with Medicare Advantage plans. “The breadth of reforms finalized by this rule demonstrates CMS’s focus on marketing and advertising practices to reduce fraud and abuse,” said the agency when the new guidelines were released. CMS promised stricter enforcement during the 2024 plan year.
The new rules include a list of prohibited advertising practices intended to curb the misuse of the Medicare logo in a misleading way, and to stop the practice of “marketing of benefits in a service area where those benefits are not available.” The guidelines also forbid the use of superlatives like “best” and “most” unless the ad provides current documentation to support the assertion.
Many of the other terms of the new rules seem highly detailed to us. Still, the industry seems to be taking the new rules seriously, as this Forbes article attests.
The bottom line is that you are responsible to make the wisest possible choice for your particular circumstances, needs, and budget. Don’t fall for the hype! Get some good objective advice to help you decide. Better hurry, though: open enrollment ends December 7th.
Breaking News: Rajiv’s New Book is Here!
We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public. As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.
You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.
Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.
Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.
Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!
(originally reported at www.thefiscaltimes.com)