The Centers for Medicare and Medicaid Services (CMS), the agency that oversees Medicare, is implementing new rules regarding marketing of Medicare Advantage plans–corporate health plans offering Medicare benefits. The rules are designed to help protect people with Medicare from joining a Medicare Advantage plan without understanding the risks. These new rules could help at the margins, but there’s no stopping the misleading marketing.
Medicare Advantage plans are raking in billions of dollars in profits. They’ll do everything they can to expand their market share. Directing their marketing towards enrolling healthy people is the best way to grow their profits. The penalties they face for misleading people are negligible relative to what they gain; they only pay penalties when they are caught.
CMS does not have the resources to detect a lot of the misleading Medicare Advantage marketing or the power to put the kibosh on it. Medicare Advantage plans have always misled the public about what they offer as compared to Traditional Medicare, and CMS has never succeeded at stopping the misleading marketing. They don’t advertise their out-of-pocket cap amounts, which can be as high as $7,550 a year for in-network care alone; they don’t let people know that network providers might not be taking new patients and can be out-of-network at any time; they don’t explain to people that if they join their MA lan, they might never be able to switch to Traditional Medicare. People have no guaranteed right to supplemental coverage in Traditional Medicare after they have been in an MA plan for more than 12 months, except in Maine, Massachusetts, New York and Connecticut.
Of course, marketing is by definition misleading. Unless CMS required Medicare Advantage plans to highlight all their limitations–their limited networks, inappropriate delay and denial rates and out-of-pocket costs–in all their communications with enrollees, people have no sense of what they are giving up when they enroll in a Medicare Advantage plan. They cannot compare Medicare Advantage plans with Traditional Medicare in a meaningful way. Moreover, CMS gives 4 and 5 -star ratings to MA plans that have histories of committing bad acts.
CMS found that the vast majority of sales agents’ communications with people with Medicare were misleading in a secret shopper exercise. Eighty percent of sales agent calls to potential enrollees are “inaccurate or insufficient.”
At best, CMS’ closer review of sales agents’ calls and Medicare Advantage TV ads before they are aired could help at the margins. When the sales agents are paid more to steer people to Medicare Advantage than to Medicare supplemental coverage, you can expect that they will steer people to Medicare Advantage. The same is true when sales agents for MA plans administered by the biggest insurers market to people in community MA plans. Curiously, CMS set the start date for tougher reviews of TV ads for January 1, after this year’s open enrollment period is over.
CMS has never held Medicare Advantage plans to account in meaningful ways. Rather, it has raised payments to them 8.5 percent in 2023, when the data show that they are overpaid 4 percent already. And, CMS has never even identified the Medicare Advantage plans with high inappropriate denial rates or delays, let alone cancelled contracts with them. In fact, CMS’ own 2o23 Medicare and You Handbook misleads people by not mentioning many of the risks of Medicare Advantage, including the maximum $8,300 out-of-pocket limit and the prior authorization hurdles people often face.
Here’s more from Just Care:
- OIG finds widespread inappropriate care denials in Medicare Advantage
- 2023 Medicare and You Handbook continues to mislead on Medicare Advantage
- Medicare Advantage: Tune out the Joe Namath ads
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Medicare Annual Open Enrollment: Beware of Bad Actors
