Nov 3, 2022 - Health

Senate Dems urge action on false Medicare marketing

Illustration of a pattern of a newspaper classified page with money as the advertising images.

Illustration: Aïda Amer/Axios

The Biden administration needs to crack down on deceptive Medicare Advantage marketing, Democratic staff for the Senate Finance Committee wrote in a report released Thursday.

Why it matters: Medicare Advantage is on track to capture more than half of the Medicare market by next year. As the program grows, misleading marketing practices undermine enrollees' trust in the program.

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What they're saying: The administration should monitor why people leave private Medicare plans and hold bad actors accountable, the report said. Regulators should also require insurance agents and brokers to follow best practices and close loopholes to prevent cold-calling of Medicare enrollees.

  • CMS should issue warnings to Medicare-eligible people this year about calling helplines advertised on TV and what to do if they've been enrolled in a plan they don't like.

The big picture: Misleading, aggressive and flat-out false marketing about Medicare Advantage has become a national trend.

  • In Massachusetts, complaints about Medicare Advantage or Medicare prescription drug plans increased 700% from 2020 to 2021. Nine out of 10 states that gave the Senate panel data saw complaints increase last year. The report compliments CMS data that shows complaints about Medicare Advantage marketing skyrocketing from 2020 to 2021.
  • But CMS has only taken one enforcement action against a Medicare Advantage plan for marketing abuse since September 2017, according to the report.

The details: The Senate Finance Committee began collecting information on Medicare Advantage marketing complaints from 14 states in August.

  • Plans made inaccurate claims about provider networks and sent mailers made to look like federal documents. States also reported issues with third-party marketing organizations, which profit off generating leads and enrollments for insurers.
  • National plans' aggressive advertising strategies have siphoned members away from community-based Medicare Advantage plans. Independent Health Plan in Buffalo, N.Y., said 35% of members that left for a national competitor did so due to misleading marketing, the report said.

Be smart: The Biden administration has already begun efforts to rein in bad Medicare Advantage marketing practices. Starting next year, television ads for Medicare Advantage plans will be subject to a more extensive approval process before they can air, regulators announced in October.

  • CMS under President Biden has also required Medicare Advantage plans to take more responsibility for third-party marketing organization activities.
  • These actions come after the Trump administration significantly relaxed Medicare Advantage marketing requirements.

Our thought bubble: Thursday’s report suggests more active oversight is coming. But the program has wide support from lawmakers on both sides of the aisle. Read more about what lies ahead in Axios Pro.

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