Q. I heard somewhere that Medicare Advantage companies are being held to a higher standard this year when it comes to their advertisements, many of which were misleading to consumers in the past. My mother fell for one of the ads last year and enrolled in a plan where she couldn’t see her choice of doctor or get the services she desperately needed without paying extra out-of-pocket fees. She felt quite deceived. What is being done so the Medicare Advantage marketing is clearer and less misleading to senior consumers?
A. I’m sorry to hear that happened to your mother. Hopefully the new rules that have been put into place this year will be helpful for her and other senior consumers!
Similar to your mother’s unfortunate situation, there has been a sharp increase in consumer complaints about the marketing and sales of health insurance plans under Medicare Advantage (MA), Medicare’s private-plan option. Misleading marketing has had the following negative effects on senior consumers:
- Seniors that have been lured into MA plans even though their clinician is not covered have become more widespread. As you are aware, seeing a doctor or nurse practitioner who is out of network means MA enrollees’ care may not be covered or that they must pay more out of pocket.
- Other concerning practices include inaccurate information emphasizing supplemental benefits for which the individual is not eligible or that are not available in the person’s particular location.
- Ads resembling official mailings from federal agencies caused some consumers to confuse the private companies with the traditional Medicare program.
- There were numerous unsolicited sales calls from brokers and insurance agents.
This rise in consumer grievances about the practices described above coincided with a sharp increase in MA enrollment in recent years, with about half of the entire Medicare population (more than 30 million individuals) enrolled in an MA plan today.
Many Senior Consumers Were Duped into Signing Up for MA Plans
As mentioned, the rise in MA plan enrollments has been in large part due to allegedly deceptive and misleading marketing, advertising, and sales strategies. More than 1,260 unique ads for Medicare plans aired nearly 650,000 times during last year’s nine-week open enrollment period for 2023 Medicare coverage, reaching millions of senior consumers. The vast majority of ads highlighted extra benefits a plan could offer, such as dental benefits and lower out-of-pocket costs. Access to added benefits is among the most common reasons consumers choose Medicare Advantage plans over traditional Medicare, according to the Commonwealth Fund. More than 50,000 airings used language indicating that consumers would miss out on benefits if they didn’t enroll in a Medicare Advantage plan. Ten percent of all ads used celebrity spokespeople, such as retired football player Joe Namath. In addition, more than 25% of Medicare Advantage television ads last year used images evoking government Medicare cards. Many of the consumers who signed up for an MA plan believed the promises made in the ads and did so without a full understanding of the implications of their decision, and many of these consumers signed up for a plan that was not suitable for their needs.
Consumer Protections Were Put into Place by the Centers for Medicare & Medicaid Services (CMS)
In a move intended to protect consumers from being persuaded by potentially misleading marketing practices, CMS recently revised federal rules governing how MA insurers advertise their plans. These changes are being enacted to protect beneficiaries from confusing advertising and from receiving “unwanted and ongoing contacts from marketers.” The proposed rule has taken effect this month, just in time for Medicare Open Enrollment, which begins on October 15.
Previous changes “strengthened rules that hold MA insurers accountable for improper agent and broker activities (where many of the consumer complaints originate), required MA insurers to maintain oversight of agent and broker activities, and imposed more stringent requirements on third-party marketing organizations,” according to CMS. This year’s revisions to the MA marketing rules build on those and other existing regulations to increase oversight of MA plan marketing. Among the key provisions, the latest guidelines:
- make clear that supplemental benefits cannot be advertised in areas where they are not available;
- require MA plans to notify their enrollees each year that they can opt out of phone solicitations; and
- prohibit the use of Medicare’s name or logo in a misleading way (as has been the case in some television ads and mailings).
In addition, to be more transparent, MA insurers and agents are now required to gather pertinent information (such as an individual’s preferred health care providers and health care needs) when discussing their plan choices and explain to prospective enrollees that their current coverage will end once they enroll in an MA plan.
More Actions Are Needed to Strengthen Beneficiary Protections and to Enforce New Rules
The new rules are a significant step in the right direction, but more is needed to make sure that MA marketing efforts are not misleading or harmful to consumers.
In addition to more protection, CMS needs to ensure that the new rules are followed. Federal agencies should develop effective monitoring mechanisms and use their enforcement authority to hold insurers and other entities accountable for inappropriate marketing of their plans. If you are a senior who believes that you are being targeted by con artists or unscrupulous advertising in connection with Medicare, be sure to call 1-800-MEDICARE to report the activity. Remember to never reveal your Medicare card number or other personal health and financial information to anyone who’s not a bona fide member of your health care team!
This Open Enrollment Period: Review Your Medicare Health Plan, and if You Have Medicare Advantage, Consider Switching Back to Original Medicare
Medicare Open Enrollment goes from October 15 until December 7, 2023. For those reconsidering their options, you may want to consider switching back to original Medicare and purchasing a Medicare Supplement plan. If you are considering switching back, the sooner you do so the better, because you can be subject to medical underwriting for the Medicare supplement plan that you choose (another thing Medicare Advantage plans don’t typically tell people). Therefore, you may experience a significant increase in premium, but you must also understand that you will generally be getting significantly better coverage. Please read this article on the subject for more details.
A major problem we see with Medicare Advantage plans is that each plan is “in network” with only a few nursing homes and rehabilitation facilities, forcing people to choose a rehabilitation facility and/or nursing home that may not fully meet their needs. The good news is that you can switch from a Medicare Advantage plan back to Original Medicare during the annual open enrollment period; however, if you are already suffering from a significant medical issue, it may be very expensive or impossible to purchase a Medicare supplement plan. Please click here for more details on this and other important information about Medicare Advantage.
At the Farr Law Firm, we work with Retirement & Medicare Together to serve the Medicare needs of our clients. Now is a perfect time to review your plan and start thinking about making any necessary changes. Schedule your Medicare review today!
Medicare Planning Fairfax: 703-691-1888
Medicare Planning Fredericksburg: 540-479-1435
Medicare Planning Rockville: 301-519-8041
Medicare Planning DC: 202-587-2797
About Evan H Farr, CELA, CAP
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