Despite recent efforts by the Centers for Medicare & Medicaid Services (CMS) to crack down on misleading marketing of Medicare Advantage (MA) plans, further oversight is necessary to protect seniors who are overwhelmed by the volume of plan options and confusing marketing over benefits and networks, advocates told the Senate Finance Committee on Wednesday.
Senate Finance Committee Chair Ron Wyden, D-Ore., who has overseen several recent hearings on MA and unscrupulous marketing practices, opened the hearing by stating that while there is new oversight, the committee can’t take any “victory laps.”
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"Our investigators have found marketing middlemen are the latest sleazy set of private sector scoundrels targeting seniors on Medicare Advantage. These bad actors are gearing up for this new enrollment period," Wyden said in a prepared statement. "These middlemen hijack personal information from as many seniors as possible and then they funnel this personal information to the health insurance plans that pay these sleazy marketers the most. Basically, it’s 'profit for us first, help for seniors and taxpayers last.'"
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The single most influential perspective when choosing an MA plan remains advice from a broker, Krista Hoglund, chief executive officer, Security Health Plan, and board member of the Alliance of Community Health Plans, told the panel in prepared remarks. Brokers, she said, are a trusted partner for MA plans, but some large firms and third-party marketing organizations continue to leverage their influence for financial gain. The current Medicare brokerage model is broken, she said, because it doesn’t require brokers and other stakeholders to put consumers first.
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“The explosion of large field marketing organizations in recent years has created a compensation structure that makes it more difficult for smaller, regional plans and their local independent agent partners to compete,” she said. “Many of these field marketing organizations receive ‘add-on’ or incentive payments that go above and beyond the CMS-approved broker commission caps. Instead of collecting the maximum commission of $611 for a new enrollee, many brokers are collecting $1,300 or more. This additional compensation is marked as marketing or administrative dollars and can also include incentives for members completing a health risk assessment or vague application of referral bonuses.”
Cobi Blumenfeld-Gantz, CEO and co-founder of Chapter, a technology-enabled Medicare and retirement navigation platform, urged the panel to consider adopting principles to better protect consumers. Any trusted guide that consumers contact must be obligated to place their interests first, he said. They should receive information about all types of available Medicare plans, including supplemental plans, standalone Part D prescription plans, coverage under Original Medicare, and MA plans. Consumers need transparent and accessible data to easily search and compare plans based on their full features (including provider networks and drug formularies). Third-party marketing and lead generators must clearly identify who they are and the specific organization that will contact the consumer or which the consumer is being promoted to contact.
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Christina Reeg, program director for the Ohio Senior Health Insurance Information Program (OSHIIP), which provides objective counseling and education to Medicare patients through a federal grant program, said consumers are overwhelmed by the marketing material they receive and the volume of plan options.
“The desire to have the advertised ‘benefits you are entitled to,’ or the cash benefits for over-the-counter goods, utilities or other wants masks the need to review critical plan health benefits, prescription drug coverage, and plan networks. This often leads to poor enrollment decisions and undesirable outcomes,” she told the panel.
Reeg urged the committee to consider additional oversight, such as a personalized Annual Notice of Change to assist seniors in better identifying plan changes, such as higher premiums and copays. “Stronger oversight on utilization of special election periods, such as the low-income subsidy special enrollment period, and a block on enrollments for those with cognitive impairments could minimize improper sales to our most vulnerable beneficiaries,” she said.