Enrolling in Traditional Medicare means paying more upfront to protect against catastrophic costs; in return, you get the care your treating physicians recommend you need. In stark contrast, enrolling in Medicare Advantage means allowing a for-profit insurer to second-guess your treating physician and inappropriately delay or deny the care you need, forcing you to gamble with your health and, sometimes, your life. What’s worse is that our federal government is rarely willing or able to punish Medicare Advantage insurers for their bad acts. Consequently, the insurers too often can get away with not covering their enrollees’ Medicare benefits.
Penalties on Medicare Advantage insurers that act in ways that deprive their enrollees’ of the care they need are few and far between. In the first four months of 2025, the Trump administration imposed more penalties on the insurers in Medicare Advantage than they faced during the entire four years of the Biden administration. It imposed about $3 million in penalties, reports Rebecca Pifer Parduhn for HealthcareDive. But, all told, $3 million is tiny relative to the billions in profits of the big insurers.
The Centers for Medicare and Medicaid Services charged most insurers under $100,000 for their violations. Penalties were for serious offenses, including improper delays and denials of care and requiring people to pay more than allowed under the law. Centene was charged the largest penalty of $2 million for charging its enrollees above the out-of-pocket maximum permitted to be charged in violation of 42 C.F.R. Part 422, Subpart C.
Molina received the second largest penalty of just over $285,000 for its failure to comply with prescription drug coverage requirements. CMS said that Molina’s “failure was systemic and adversely affected, or had the substantial likelihood of adversely affecting, enrollees because the enrollees experienced delayed access to medications, paid out-of-pocket costs for medications, or never received medications.”
Susan Jaffe reports for KFF News that over a seven-year stretch between 2016 and 2022, CMS did almost nothing to ensure network adequacy for Medicare Advantage enrollees. A Freedom of Information Act request regarding enforcement actions against Medicare Advantage insurers with inadequate networks resulted in letters to just five insurers about seven MA plans. Given the widespread evidence of network inadequacy, it’s inconceivable that only seven MA plans had inadequate networks. With network inadequacy, Medicare Advantage plans might not have enough primary care physicians, specialists, hospitals, nursing homes, rehab facilities or mental health professionals in their networks.
Technically, CMS can prevent insurers with inadequate networks from marketing these Medicare Advantage plans or freeze enrollment or fine them or even terminate the Medicare Advantage plan. But, it has never done so, according to the Medicare Payment Advisory Commission (MedPAC).
In its June 2024 report, MedPAC writes: “CMS has the authority to impose sanctions for noncompliance with network adequacy standards but has never done so.” CMS does not even let their enrollees know about the inadequacy of the provider network or allowed them the ability to disenroll.
Here’s more from Just Care:
- 24 health systems drop their Medicare Advantage contracts
- OIG finds Medicare Advantage continues to overcharge government
- OIG finds widespread inappropriate care denials in Medicare Advantage
- Government rules won’t curtail Medicare Advantage bad acts without stiff penalties
- Well-kept secrets of Medicare Advantage plans
