Category Archives: Marketing Deceptive

Medicare Advantage’s $64 Billion Supplemental Benefits Slush Fund

Posted on by • Posted in Health Insurance Industry, Marketing Deceptive, Medicare Advantage, Medicare Advantage Denials, Medicare Advantage Overpayments, Medicare Advantage Supplemental Benefits, Medicare Payment Advisory Commission (MedPAC) • Leave a comment
https://wendellpotter.substack.com/p/medicare-advantages-64-billion-supplemental?utm_source=post-email-title&publication_id=255152&post_id=144847454&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

Medicare spends huge sums financing the dental, vision and other benefits offered by Medicare Advantage plans. A new government report sounds the alert about their potential misuse.

In mid-March, the Medicare Payments Advisory Commission (MedPAC), which advises Congress on Medicare policy, made a bombshell disclosure in its annual Medicare report. The rebates that Medicare offers Medicare Advantage plans for supplemental benefits like vision, dental, and gym membership were at “nearly record levels”, more than doubling from 2018 to nearly $64 billion in 2024, but the government “does not have reliable information about enrollees’ actual use of these benefits at this time.”

In other words: $64 billion is being spent to subsidize private Medicare Advantage plans to provide benefits that are not available to enrollees in traditional Medicare, and the government has no idea how they are being spent.

Not only is this an enormous potential misallocation of taxpayer resources from the Medicare trust fund, it is also a critical part of Medicare Advantage’s marketing scam. The additional benefits offered in Medicare Advantage plans are what entice people to give up traditional Medicare, where there is no prior authorization, closed networks, or care denials.

But, as MedPAC states in the report, even though the Centers for Medicare and Medicaid Services (CMS) does not collect the data on utilization of supplemental benefits, what little data there is does not paint a pretty picture, with MedPAC noting that, “Limited data suggest that use of non-Medicare-covered supplemental benefits is low.”

HEALTH CARE un-covered is among the first media outlet to report MedPAC’s findings.

A 2018 study by Milliman, an actuarial firm, found that just 11 percent of Medicare Advantage beneficiaries had claims for dental care in that year, and that “multiple studies using survey data have found that beneficiaries with dental coverage in MA are not more likely to receive dental services than other Medicare beneficiaries.” A study from the Consumer Healthcare Products Association found that just one-third of eligible participants in Medicare Advantage plans used an over-the-counter medication benefit at pharmacies, leaving $5 billion annually on the table for insurers to pocket. Elevance Health, formerly Anthem, has 42 supplemental benefits available to Medicare Advantage beneficiaries. They analyzed a subset of 860,000 beneficiaries. For six of the 42 benefits, the $124 billion insurer could not report utilization data. For the other 36 supplemental benefits, the bulk of those covered used fewer than four benefits, with a full quarter not using any benefits at all and a majority using one or less benefits.

Medpac added that it had “previously reported that while these benefits often include coverage for vision, hearing, or dental services, the non-Medicare supplemental benefits are not necessarily tailored toward populations that have the greatest social or medical needs. The lack of information about enrollees’ use of supplemental benefits makes it difficult to determine whether the benefits improve beneficiaries’ health.”

With studies already showing that Medicare Advantage is associated with increased racial disparities in seniors’ health care, the massive subsidies provided to supplemental benefits appears to be an inadvertent driver of this problem:

the $64 billion—at least the portion of it that is actually being spent as opposed to deposited into insurer coffers—is likely not going to the populations that actually need it.

Amber Christ is the managing director of health policy for Justice in Aging, which advocates for the rights of seniors. “Health plans are receiving a large amount of dollars to provide supplemental benefits through rebates to plans. Clearly the offering have expanded, but the extent that they are being used is a black box,” she said. What little we do know, she said, indicates a “real lack of utilization.”

Christ pointed out that the Biden administration has taken some significant steps forward. “We’ve seen some good things coming out of CMS that will bring some transparency—the plans are going to have to report spending and utilization data, and in 2026 they will have to start sending notices to enrollees at the six-month point, letting people know what benefits they have used and what’s available. Those are all good moves.”

What’s missing from the proposed rule-making, however, is how the colossal outlays to supplemental benefits impact the goal of health equity, Christ said. “What we would have wanted to see more is demographics around utilization. Are there disparities in access?”

Of particular concern to advocates is the way that Medicare Advantage plans use supplemental benefits to market to “dual eligibles,” people who are eligible for Medicaid and Medicare. Medicare Advantage plans have taken to offering what amounts to cash benefits to dual eligibles, which provides a very strong incentive for people to sign up for Medicare Advantage.

But it’s effectively a trap, as being in both Medicare Advantage and Medicaid can not only result in prior authorization, care denials, and losing access to one’s physician, but also making care endlessly complex.

“Medicaid offers a bunch of supplemental benefits, either fully or often more comprehensively than Medicare Advantage. Seniors get lured into these health plans for benefits that they already have access to. But because benefits between Medicare Advantage and Medicaid aren’t coordinated people experience disruptions to their access to care. If they are dually enrolled it should go above and beyond, not duplicate coverage or making it more difficult to access coverage,” Christ said. 

David Lipschutz, the associate director of the Center for Medicare Advocacy, related an experience he had with a state health official who counseled a senior against enrolling in Medicare Advantage. The official “was able to stop them and help them think through their choices. She wanted to enroll in a Medicare Advantage plan that offered a flex benefit,” which is basically restricted cash (Aetna, for example, restricts its recipients to spending the money at stores owned by CVS Health, its parent company). “None of her five doctors contracted with the Medicare Advantage plan. Had it not been with that interaction with the health counselor. She would have traded the flex card for no access to her current physicians. It’s an untenable situation.”

Lipschutz added that Medicare Advantage insurers contract with community organizations to administer supplemental benefits, which helps to insulate the industry from political pressure from advocates in Washington. “This whole new range of supplemental benefits has also at the same time pulled in a lot of community based organizations. They need the cash that the plans are offering. It creates a welcome dynamic for insurance companies trying to make community organizations dependent on their money. But it’s not a good situation to be in when you’re trying to reign in Medicare Advantage overpayments.”

Bid/Ask

The core of the financing of supplemental benefits is through a bid system, in which CMS sets a benchmark based on area fee-for-service Medicare spending, and then invites insurers to submit a bid, and then receives a rebate for supplemental benefits based on the benchmark. The essential problem is that the average person in traditional Medicare is sicker than someone in a Medicare Advantage plan—the research shows that when patients get sick, they leave Medicare Advantage for traditional Medicare if they can. And Medicare Advantage plans aggressively market to healthier patients—the oft-touted gym membership supplemental benefit only works for those who actually work out at the gym regularly. (Well under one-third of those 75 and over.)

And in counties with low traditional Medicare spending, the benchmark is at 115 or 107.5 percent—an unreasonable and massive subsidy written into the Affordable Care Act at the behest of the insurance lobby. The lowest benchmark is at 95 percent of FFS spending for areas with high costs.

“The way the payment is set up leads to this excessive amount of rebate dollars,” said Lipschutz. “It’s a fundamentally flawed payment system which is in dire need of reform.” Lipschutz’s position jives with the MedPAC report, which states that: “A major overhaul of MA policies is urgently needed.”

Supplements For Half

“You shouldn’t have to enroll in a private plan just to access these benefits,” said Lipschutz. But that’s exactly the choice millions of seniors are faced with. Forty-nine percent of seniors remain in traditional Medicare.

And for that group, Medicare offers no supplemental benefits, Christ said. “As a foundational principle spending all this money for Medicare Advantage to give supplemental benefits doesn’t make sense. This is the Medicare trust fund. Half of Medicare has “access,” and the other half, in traditional Medicare, doesn’t. Wouldn’t those dollars be better spent giving everyone access? Especially when we understand that Medicare Advantage has narrower providers and prior authorization.

There’s a recognition that these supplemental benefits have positive impacts on quality of life, but we’re not offering it in traditional Medicare—even though Medicare Advantage is not doing a better job than traditional Medicare.”

House of Cards?

A new lawsuit, filed in April, could substantially impact the incentives that plans have to offer supplemental benefits. To manage costs, many Medicare Advantage plans have value-based care arrangements with providers—meaning that they share some of their revenues with hospitals and other health providers to ensure access to networks and to smooth costs out in the long run.

But as part of this arrangement, providers bear some of the costs of the plans—including the cost of supplemental benefits. Bridges Health Partners, which is a clinically integrated network of doctors and hospitals, sued Aetna to block the allocation of supplemental benefits to the expenses that they bear the cost of, due to a 20-fold increase in their costs.

Combined with the 2026 requirement from CMS that participants be informed as to what benefits they haven’t used, insurers’ ability to offer these supplemental benefits and still retain sky-high profit margins could be curtailed.

The Heritage Foundation’s Medicare and Social Security Blueprint

Posted on by • Posted in Deceptive Advertising, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Lobbyist, Marketing Deceptive, Medicare, Medicare Advantage, Out of Pocket Expenses, Political Lobbying, Privatization, Social Security, The Heritage Foundation • Leave a comment
https://wendellpotter.substack.com/p/the-heritage-foundations-medicare?utm_source=post-email-title&publication_id=255152&post_id=143264746&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

If Congress in the next year or two succeeds in transforming Medicare into something that looks like a run-of-the mill Medicare Advantage plan for everyone – not just for those who now have the plans – it will mark the culmination of a 30-year project funded by the Heritage Foundation.

A conservative think tank, the Heritage Foundation grew to prominence in the 1970s and ’80s with a well-funded mission to remake or eliminate progressive governmental programs Americans had come to rely on, like Medicare, Social Security and Workers’ Compensation. 

Some 30 million people already have been lured into private Medicare Advantage plans, eager to grab such sales enticements as groceries, gym memberships and a sprinkling of dental coverage while apparently oblivious to the restrictions on care they may encounter when they get seriously ill and need expensive treatment.  That’s the time when you really need good insurance to pay the bills. 

Congress may soon pass legislation that authorizes a study commission pushed by Heritage and some Republican members aimed at placing recommendations on the legislative table that would end Medicare and Social Security, replacing those programs with new ones offering lesser benefits for fewer people.

In other words, they would no longer be available to everyone in a particular group. Instead they would morph into something like welfare, where only the neediest could receive benefits.  

How did these popular programs, now affecting 67.4 million Americans on Social Security and nearly 67 million on Medicare, become imperiled?

As I wrote in my book, Slanting the Story: The Forces That Shape the News, Heritage had embarked on a campaign to turn Medicare into a totally privatized arrangement. It’s instructive to look at the 30-year campaign by right-wing think tanks, particularly the Heritage Foundation, to turn these programs into something more akin to health insurance sold by profit-making companies like Aetna and UnitedHealthcare than social insurance, where everyone who pays into the system is entitled to a benefit when they become eligible.  

The proverbial handwriting was on the wall as early as 1997 when a group of American and Japanese health journalists gathered at an apartment in Manhattan to hear a program about services for the elderly. The featured speaker was Dr. Robyn Stone who had just left her position as assistant secretary for the Department of Health and Human Services in the Clinton administration. 

Stone chastised the American reporters in the audience, telling them: “What is amazing to me is that you have not picked up on probably the most significant story in aging since the 1960s, and that is passage of the Balanced Budget Act of 1997, which creates Medicare Plus Choice” – a forerunner of today’s Advantage plans.

“This is the beginning of the end of entitlements for the Medicare program,” Stone said, explaining that the changes signaled a move toward a “defined contribution” program rather than a “defined benefit” plan with a predetermined set of benefits for everyone. “The legislation was so gently passed that nobody looked at the details.” 

Robert Rosenblatt, who covered the aging beat for the Los Angeles Times, immediately challenged her. “It’s not the beginning of the end of Medicare as we know it,” he shot back. “It expands consumer choice.” 

Consumer choice had become the watchword of the so-called “consumer movement,” ostensibly empowering shoppers – but without always identifying the conditions under which their choices must be made.

When consumers lured by TV pitchmen sign up for Medicare Advantage, how many of the sellers disclose that once those consumers leave traditional Medicare for an Advantage plan, they may be trapped. In most states, they will not be able to buy a Medicare supplement policy if they don’t like their new plan unless they are in super-good health. 

In other words, most seniors are stuck. That can leave beneficiaries medically stranded when they have a serious, costly illness at a time in life when many are using up or have already exhausted their resources. I once asked a Medicare counselor what beneficiaries with little income would do if they became seriously ill and their Advantage plan refused to pay many of the bills, an increasingly common predicament.  The cavalier answer I got was: “They could just go on Medicaid.”

The push to privatize Medicare began in February 1995 when Heritage issued a six-page committee brief titled “A Special Report to the House Ways and Means Committee”, which was sent to members of Congress, editorial writers, columnists, talk show hosts and other media.  Heritage then spent months promoting its slant on the story. Along with other right-wing groups dedicated to transforming Medicare from social insurance to a private arrangement like car insurance, Heritage clobbered reporters who produced stories that didn’t fit the conservative narrative.

The right-wing Media Research Center singled out journalists who didn’t use the prescribed vocabulary to describe Heritage plans. Its newsletter criticized CBS reporter Linda Douglas when she reported that the senior citizens lobby had warned that the Republican budget would gut Medicare. The group reprimanded another CBS reporter, Connie Chung, for reporting that the House and Senate GOP plans “call for deep cuts in Medicare and other programs.”  Haley Barbour, then Republican National Committee chairman, vowed to raise “unshirted hell” with the news media whenever they used the word “cut.” He wined and dined reporters, “educating” them on the “difference” between cuts and slowing Medicare’s growth.  Former Republican U.S. Rep. John Kasich of Ohio, who chaired the House budget committee, called reporters warning them not to use the word “cut,” later admitting he “worked them over.”  

As I wrote at the time, by fall of that year reporters had fallen in line.  Douglas, who had been criticized all summer, got the words right and reported that the Republican bill contained a number of provisions “all adding up to a savings of $270 billion in the growth of Medicare spending.”

Fast forward to now. The Heritage Foundation’s Budget Blueprint for fiscal year 2023 offered ominous recommendations for Medicare, some of which might be enacted in a Republican administration. The think tank yet again called for a “premium support system” for Medicare, claiming that if its implementation was assumed in 2025, it “would reduce outlays by $1 trillion during the FY 2023-2032 period.” Heritage argues that the controversial approach would foster “intense competition among health plans and providers,” “expand beneficiaries’ choices,” “control costs,” “slow the growth of Medicare spending,” and “stimulate innovation.”

The potential beneficiaries would be given a sum of money, often called a premium support, to shop in the new marketplace, which could resemble today’s sales bazaar for Medicare Advantage plans, setting up the possibility for more hype and more sellers hoping to cash in on the revamped Medicare program. Many experts fear that such a program ultimately could destroy what is left of traditional Medicare, which about half of the Medicare population still prefers.  

In other words, most seniors are stuck. 

That can leave beneficiaries medically stranded when they have a serious, costly illness at a time in life when many are using up or have already exhausted their resources. I once asked a Medicare counselor what beneficiaries with little income would do if they became seriously ill and their Advantage plan refused to pay many of the bills, an increasingly common predicament.  The cavalier answer I got was: “They could just go on Medicaid.”

The push to privatize Medicare began in February 1995 when Heritage issued a six-page committee brief titled “A Special Report to the House Ways and Means Committee”, which was sent to members of Congress, editorial writers, columnists, talk show hosts and other media.  Heritage then spent months promoting its slant on the story. Along with other right-wing groups dedicated to transforming Medicare from social insurance to a private arrangement like car insurance, Heritage clobbered reporters who produced stories that didn’t fit the conservative narrative.

The right-wing Media Research Center singled out journalists who didn’t use the prescribed vocabulary to describe Heritage plans. Its newsletter criticized CBS reporter Linda Douglas when she reported that the senior citizens lobby had warned that the Republican budget would gut Medicare. The group reprimanded another CBS reporter, Connie Chung, for reporting that the House and Senate GOP plans “call for deep cuts in Medicare and other programs.”  Haley Barbour, then Republican National Committee chairman, vowed to raise “unshirted hell” with the news media whenever they used the word “cut.” He wined and dined reporters, “educating” them on the “difference” between cuts and slowing Medicare’s growth.  Former Republican U.S. Rep. John Kasich of Ohio, who chaired the House budget committee, called reporters warning them not to use the word “cut,” later admitting he “worked them over.”  

As I wrote at the time, by fall of that year reporters had fallen in line.  Douglas, who had been criticized all summer, got the words right and reported that the Republican bill contained a number of provisions “all adding up to a savings of $270 billion in the growth of Medicare spending.”

Fast forward to now. The Heritage Foundation’s Budget Blueprint for fiscal year 2023 offered ominous recommendations for Medicare, some of which might be enacted in a Republican administration. The think tank yet again called for a “premium support system” for Medicare, claiming that if its implementation was assumed in 2025, it “would reduce outlays by $1 trillion during the FY 2023-2032 period.” Heritage argues that the controversial approach would foster “intense competition among health plans and providers,” “expand beneficiaries’ choices,” “control costs,” “slow the growth of Medicare spending,” and “stimulate innovation.”

The potential beneficiaries would be given a sum of money, often called a premium support, to shop in the new marketplace, which could resemble today’s sales bazaar for Medicare Advantage plans, setting up the possibility for more hype and more sellers hoping to cash in on the revamped Medicare program. Many experts fear that such a program ultimately could destroy what is left of traditional Medicare, which about half of the Medicare population still prefers.  

In a Republican administration with a GOP Congress, some of the recommendations, or parts of them, might well become law. The last 30 years have shown that the Heritage Foundation and other organizations driven by ideological or financial reasons want to transform Medicare, and they are committed for the long haul.  They have the resources to promote their cause year after year, resulting in the continual erosion of traditional Medicare by Advantage Plans, many of which  are of questionable value when serious illness strikes. 

The seeds of Medicare’s destruction are in the air. 

The program as it was set out in 1965 has kept millions of older Americans out of medical poverty for over 50 years, but it may well become something else – a privatized health care system for the oldest citizens whose medical care will depend on the profit goals of a handful of private insurers. It’s a future that STAT’s Bob Herman, whose reporting has explored the inevitable clash between health care and an insurer’s profit goals, has shown us.

In the long term, the gym memberships, the groceries, the bit of dental and vision care so alluring today may well disappear, and millions of seniors will be left once again to the vagaries of America’s private insurance marketplace.

Company behind Joe Namath Medicare Advantage ads has long rap sheet of misconduct

Posted on by • Posted in Bankruptcy, Corporate Liability, Corporate Responsibility, Health Insurance Industry, Investments, Marketing Deceptive, Medicare Advantage, Pension, Pension Funding, Pension Public, Private Equity, Securities and Exchange Commission (SEC) • Leave a comment

https://wendellpotter.substack.com/p/company-behind-namath-ads-has-long

Former New York Jets superstar Joe Namath can be seen every year during Medicare open enrollment hocking plans that tell seniors how great their life would be if only they signed up for a Medicare Advantage plan. From October 15 to December 7 last year alone, Joe Namath ads ran 3,670 times, according to iSpot, which tracks TV advertising.

But the company behind those ads, now called Blue Lantern Health, and their products, HealthInsurance.com and the Medicare Coverage Helpline, have an expansive rap sheet of misconduct, including prosecutions by the Securities and Exchange Commission and the Federal Trade Commission, and a recent bankruptcy filing that critics say is designed to jettison the substantial legal liabilities the firm has incurred. In September 2023, the company became Blue Lantern; before that, it was called Benefytt; and before that, Health Insurance Innovations. Forty-three state attorneys general had settled with the company in 2018, with it paying a $3.4 million fine. A close associate of the company, Steven Dorfman, has also been prosecuted by the FTC, in addition to the Department of Justice. 

Namath himself has a bit of a checkered past when it comes to his business associates—in the early 1970s, he co-owned a bar frequented by members of the Colombo and Lucchese crime families, according to reporting at the time cited in a 2004 biography.  Due to the controversy surrounding the bar, Namath was forced by the NFL Commissioner to sell his interest in it. Last year, it was revealed that Namath had employed a prolific pedophile coach at his football camp, also in the 1970s, and the 80-year-old ex-quarterback is now being sued by one of the coach’s victims. 

The Namath ads are the main illustration of the behemoth Medicare Advantage marketing industry, which is designed to herd seniors into Medicare Advantage plans that restrict the doctors and hospitals that seniors can go to and the procedures they can access through the onerous “prior authorization” process, and it costs the federal government as much as $140 billion annually compared to traditional Medicare. Over half of seniors—nearly 31 million people—are now in Medicare Advantage, and there is little understanding of the drawbacks of the program. Seniors are aware that they may receive modest gym or food benefits but typically do not realize that they may be giving up their doctors, their specialists, their outpatient clinics, and their hospitals in favor of an in-network alternative that may be lower quality and farther away.

How so many seniors are lured into Medicare Advantage

Blue Lantern—with its powerful private equity owner Madison Dearborn—may be the key to understanding how so many people have been ushered into Medicare Advantage—and the pitfalls that private equity’s rapid entrance into health care can create for ordinary Americans.

While Blue Lantern is just one company, it is a Rosetta Stone for everything that is wrong with American health care today—fraud, profiteering, lawbreaking, no regard for patient care—where only the public comes out the loser. 

Blue Lantern uses TV ads and, at least until regulators began poking around, a widespread telemarketing operation, being one of the main firms charged with generating “leads” that are then sold to brokers and insurers, as Medicare Advantage plans are banned from cold-calling. Court filings reviewed by HEALTH CARE Un-Covered allege that after legal discovery, Blue Lantern (then known as Benefytt) at minimum dialed seniors over 17 million times, potentially in violation of federal law that requires telemarketers to properly identify themselves and who they are working for—ultimately, in this case, insurers that generate huge profits from Medicare Advantage.

The Namath ads have been running since 2018 when the company was named Health Insurance Innovations—the same year the FTC began prosecuting Simple Health Plans, along with its then-CEO Steven Dorfman. The Fort Lauderdale Sun-Sentinel identified Health Insurance Innovations as a “successor” to Simple Health Plans. After five years of likely exceptionally costly litigation, for which Dorfman is represented by jet-set law firm DLA Piper, on February 9, the FTC won a $195 million judgment against Simple Health Plans and Dorfman. The FTC alleged in 2019 that Dorfman had lied to the court when he said that he did not control any offshore accounts. The FTC found $20 million, but the real number is probably higher. 

Friends in high places 

In February 2020, Trump’s Secretary of Health and Human Services, Alex Azar, said that the Namath ads might not “look or sound like the future of health care,” but that they represented “real savings, real options” for older Americans. 

In March 2020, Health Insurance Innovations (HII) changed its name to Benefytt, and in August 2020, it was acquired by Madison Dearborn Partners. Madison Dearborn has close ties to the Illinois Democratic elite, pumping over $916,000 into U.S. Ambassador to Japan Rahm Emanuel’s campaigns for Congress and mayor of Chicago.

In September 2021, HII settled a $27.5 million class action lawsuit. The 230,000 victims received an average payout of just $80.  

In July 2022, the SEC charged HII/Benefytt and its then-CEO Gavin Southwell with making fraudulent representations to investors about the quality of the health plans it was marketing. “HII and Southwell…told investors in earnings calls and investor presentations that HII’s consumer satisfaction was 99.99 percent and state insurance regulators received very few consumer complaints regarding HII. In reality, HII tracked tens of thousands of dissatisfied consumers who complained that HII’s distributors made misrepresentations to sell the health insurance products, charged consumers for products they did not authorize and failed to cancel plans upon consumers’ requests,” the SEC found, with HII/Benefytt and Southwell ultimately paying a $12 million settlement in November 2022. 

By August 2022, Benefytt had paid $100 million to settle allegations that it had fraudulently directed people into “sham” health care plans. “Benefytt pocketed millions selling sham insurance to seniors and other consumers looking for health coverage,” the FTC’s Director of Consumer Protection, Samuel Levine, said at the time. 

Bankruptcy and another name change

In May 2023, Benefytt declared Chapter 11 bankruptcy—where the company seeks to continue to exist as a going concern, as opposed to Chapter 9, when the company is stripped apart for creditors—in the Southern District of Texas. The plan of bankruptcy was approved in August. The Southern Texas Bankruptcy Court has been mired in controversy in recent months as one of the two judges was revealed to be in a romantic relationship with a woman employed by a firm, Jackson Walker, that worked in concert with the major Chicago law firm Kirkland and Ellis to move bankruptcy cases to Southern Texas and monopolize them under a friendly court. While the other judge on the two-judge panel handled the Benefytt case, Jackson Walker and Kirkland and Ellis were retained by Benefytt, and the fees paid to Jackson Walker by Benefytt were delayed by the court as a result of the controversy.

In September 2023, Benefytt exited bankruptcy and became Blue Lantern. 

The August approval of the bankruptcy plan was vocally opposed by a group of creditors who had sued Benefytt over violations of the Telephone Consumer Privacy Act (TCPA). The creditors asserted that Benefytt had substantial liabilities, with millions of calls made where Benefytt did not identify the ultimate seller—Medicare Advantage plans run by UnitedHealth, Humana, and other firms prohibited from directly contacting people they have no relationship with—and violations fined at $1,500 per willful violation. 

Attorneys for those creditors stated in a filing reviewed by HEALTH CARE Un-Covered that Madison Dearborn always planned “to steer Benefytt into bankruptcy,” if they were unable to resolve the substantial liabilities they owed under the TCPA. 

Madison Dearborn “knew that Benefytt’s TCPA liabilities exceeded its value, but purchased Benefytt anyway, for the purpose of trying to quickly extract as much money and value as they could before those liabilities became due,”

the August 25, 2023, filing stated on behalf of Wes Newman, Mary Bilek, George Moore, and Robert Hossfeld, all plaintiffs in proposed TCPA class action suits. The filing went on to say that the bankruptcy was inevitable “if—after siphoning off any benefit from the illegal telemarketing alleged herein—[Madison Dearborn] could not obtain favorable settlements or dismissals for the telemarketing-related lawsuits against Benefytt.”

Under the bankruptcy plan, Blue Lantern/Benefytt is released from the TCPA claims, but individuals harmed can affirmatively opt-out of the release, which is why the bankruptcy court justified its approval. Over 7 million people—the total numbers in Benefytt’s database, according to the plaintiffs—opting out of the third-party release is an enormous administrative hurdle for plaintiffs’ lawyers to pass, massively limiting the likelihood of success of any class-action litigation against Blue Lantern going forward. 

Their attorney, Alex Burke, stated in court that “[t]his bankruptcy is an intentional and preplanned continuation of a fraud.” His statement was before 3,670 more Namath ads ran during 2023 open enrollment. 

In response to requests for comment from HEALTH CARE un-covered, the Centers for Medicare and Medicaid Services did not answer questions about Benefytt and why the company was simply not barred from the Medicare Advantage market altogether. 

Corporations have used the bankruptcy process in recent years to free themselves from criminal and civil liability, with opioid marketer Purdue Pharma being the most prominent recent example. The Supreme Court is reviewing the legality of Purdue’s third-party releases currently, with a decision expected in late spring.

The role that private equity plays in keeping Benefytt going cannot be overstated.

Without Madison Dearborn or another private equity firm eager to take on such a risky business with such a long history of legal imbroglios, it is almost certain that Benefytt would no longer exist—and the Joe Namath ads would disappear from our televisions. Instead, Madison Dearborn keeps them going, suckering seniors into Medicare Advantage plans. 

This is part and parcel of the ongoing colonization by private equity into America’s health care system. Private equity is making a major play into Medicare Advantage.

It has pumped billions of dollars into purchasing hospitals. It has invested in hospice care. It is gobbling up doctors’ groups. It is acquiring ambulance companies. It is hoovering up nurse staffing firms. It is making huge investments into health tech. It is in nursing homes. And it is in health insurance. Nothing about America’s health care system is untouched by private equity.

That’s a problem, experts say.

“I’ve been screaming at the TV every time Joe Namath gets on—it is not an official Medicare website,” said Laura Katz Olson, a professor of political science at Lehigh University who has written on private equity’s role in the health care system.

“Private equity has so much money to deploy, which is far more than they have opportunities to buy. As such, they are desperately looking for opportunities to invest. There’s a lot of money in Medicare Advantage—it’s guaranteed money from the federal government, which makes it perfect for the private equity playbook.”

Eileen Appelbaum, the co-director at the Center for Economic and Policy Research, who has also studied private equity’s role in health care, concurred that private equity was a perfect fit for Medicare marketing organizations.

“I think basically the whole privatized Medicare situation is ready for all kinds of exploitation and misrepresentations and denying people the coverage that they need,” she said. “My email is inundated with these totally misleading ads. Private equity  took a look at this and said, “look at that, it’s possible to do something that’s misleading and make a lot of money.”

Madison Dearborn receives a large portion of its capital from public pension funds like the California Public Employees Retirement System (CalPERS) and the Washington State Investment Fund—people who are dependent on Medicare. Appelbaum said that the pension funds exercise little oversight over their investments in private equity. “Pension funds may have the name of the company that they are invested in, they’re told that it’s ‘part of our health care investment portfolio,’ but they don’t find out what they really do until there’s a scandal.

It is amazing that pension funds give so much money to private equity with so little information about how their money is being spent.”

Five Medicare Advantage fixes we can all get behind (except the health insurance industry, of course)

Posted on by • Posted in Clinical Documentation Improvement (CDI), Health Insurance Broker Commissions, Health Insurance Industry, Health Policy, Healthcare Reform, Marketing Deceptive, Medicare Advantage, Medicare Advantage Denials, Medicare Advantage Supplemental Benefits, Network Adequacy, Network Design, Payor Authorizations, Prior Authorization, Profit Margin, Profit Motive, Rev Cycle Management, Rural Health, Rural Hospital • Leave a comment
https://wendellpotter.substack.com/p/five-medicare-advantage-fixes-we?utm_source=post-email-title&publication_id=255152&post_id=142173912&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

It’s no secret I feel strongly that “Medicare Advantage for All” is not a healthy end goal for universal health care coverage in our country. But I also recognize there are many folks, across the political spectrum, who see the program as one that has some merit. And it’s not going away anytime soon. To say the insurance industry has clout in Washington is an understatement. 

As politicians in both parties increase their scrutiny of Medicare Advantage, and the Biden administration reviews proposed reforms to the program, I think it’s important to highlight common-sense, achievable changes with broad appeal that would address the many problems with MA and begin leveling the playing field with the traditional Medicare program. 

1. Align prior authorization MA standards with traditional Medicare 

Since my mother entered into an MA plan more than a decade ago, I’ve watched how health insurers have applied practices from traditional employer-based plans to MA beneficiaries. For many years, insurers have made doctors submit a proposed course of treatment for a patient to the insurance company for payment pre-approval — widely known as “prior authorization.” 

While most prior authorization requests are approved, and most of those denied are approved if they are appealed, prior authorization accomplishes two things that increase insurers’ margins.

The practice adds a hurdle between diagnosis and treatment and increases the likelihood that a patient or doctor won’t follow through, which decreases the odds that the insurer will ultimately have to pay a claim. In addition, prior authorization increases the length of time insurers can hold on to premium dollars, which they invest to drive higher earnings. (A considerable percentage of insurers’ profits come from the investments they make using the premiums you pay.)

Last year, the Kaiser Family Foundation found the level of prior authorization requests in MA plans increased significantly in recent years, which is partially the result of the share of services subject to prior authorization increasing dramatically. While most requests were ultimately approved (as they were with employer-based insurance plans), the process delayed care and kept dollars in insurers’ coffers longer. 

The outrage generated by older Americans in MA plans waiting for prior authorization approvals has moved the Biden administration to action. 

Beginning in 2024, MA plans may be no more restrictive with prior authorization requirements than traditional Medicare.

That’s a significant change and one for which Health and Human Services Secretary Xavier Becerra should be lauded. 

But as large provider groups like the American Hospital Association have pointed out, the federal government must remain vigilant in its enforcement of this rule. As I wrote about recently with the implementation of the No Surprises Act, well-intentioned legislation and implementation rules put in place by regulators can have little real-world impact if insurers are not held accountable. It’s important to note, though, that federal regulatory agencies must be adequately staffed and resourced to be able to police the industry and address insurers’ relentless efforts to find loopholes in federal policy to maximize profits. Congress needs to provide the Department of Health and Human Services with additional funding for enforcement activities, for HHS to require transparency and reporting by insurers on their practices, and for stakeholders, especially providers and patients, to have an avenue to raise concerns with insurers’ practices as they become apparent.

2. Protect seniors from marketing scams 

If it’s fall, it’s football season. And that means it’s time for former NFL quarterback Joe Namath’s annual call to action on the airwaves for MA enrollment. 

As Congresswoman Jan Schakowsky and I wrote about more than a year ago, these innocent-appearing advertisements are misleading at their best and fraudulent at their worst. Thankfully, this is another area the Biden administration has also been watching over the past year. 

CMS now prohibits the use of ads that do not mention a specific plan name or that use the Medicare name and logos in a misleading way, the marketing of benefits in a service area where they are not available, and the use of superlatives (e.g., “best” or “most”) in marketing when not substantiated by data from the current or prior year.

As part of its efforts to enforce the new marketing restrictions, the Center for Medicare and Medicaid Services for the first time evaluated more than 3,000 MA ads before they ran in advance of 2024 open enrollment. It rejected more than 1,000 for being misleading, confusing, or otherwise non-compliant with the new requirements. These types of reviews will, I hope, continue.

CMS has proposed a fixed payment to brokers of MA plans that, if implemented, would significantly improve the problem of steering seniors to the highest-paying plan — with the highest compensation for the insurance broker. I think we can all agree brokers should be required to direct their clients to the best product, not the one that pays the broker the most. (That has been established practice for financial advisors for many years.) CMS should see this rule through, and send MA brokers profiteering off seniors packing. 

A bonus regulation in this space to consider: banning MA plan brokers from selling the contact information of MA beneficiaries. Ever wonder why grandma and grandpa get so many spam calls targeting their health conditions? This practice has a lot to do with it. And there’s bipartisan support in Congress for banning sales of beneficiary contact information. 

In addition, just as drug companies have to mention the potential side effects of their medications, MA plans should also be required to be forthcoming about their restrictions, including prior authorization requirements, limited networks, and potentially high out-of-pocket costs, in their ads and marketing materials.

3. Be real about supplemental benefits 

Tell me if this one sounds familiar. The federal government introduced flexibility to MA plans to offer seniors benefits beyond what they can receive in traditional Medicare funded primarily through taxpayer dollars.

Those “supplemental” benefits were intended to keep seniors active and healthy. Instead, insurers have manipulated the program to offer benefits seniors are less likely to use, so more of the dollars CMS doles out to pay for those benefits stay with payers. 

Many seniors in MA plans will see options to enroll in wellness plans, access gym memberships, acquire food vouchers, pick out new sneakers, and even help pay for pet care, believe it or not — all included under their MA plan. Those benefits are paid for by a pot of “rebate” dollars that CMS passes through to plans, with the presumed goal of improving health outcomes through innovative uses. 

There is a growing sense, though, that insurers have figured out how to game this system. While some of these offerings seem appealing and are certainly a focus of marketing by insurers, how heavily are they being used? How heavily do insurers communicate to seniors that they have these benefits, once seniors have signed up for them? Are insurers offering things people are actually using? Or are insurers strategically offering benefits that are rarely used?

Those answers are important because MA plans do not have to pay unused rebate dollars back to the federal government. 

CMS in 2024 is requiring insurers to submit detailed data for the first time on how seniors are using these benefits. The agency should lean into this effort and ensure plan compliance with the reporting. And as this year rolls on, CMS should be prepared to make the case to Congress that we expect the data to show that plans are pocketing many of these dollars, and they are not significantly improving health outcomes of older Americans. 

4. Addressing coding intensity  

If you’re a regular reader, you probably know one of my core views on traditional Medicare vs. Medicare Advantage plans. Traditional Medicare has straightforward, transparent payment, while Medicare Advantage presents more avenues for insurers to arbitrarily raise what they charge the government. A good example of this is in higher coding per patient found in MA plans relative to Traditional Medicare. 

An older patient goes in to see their doctor. They are diagnosed, and prescribed a course of treatment. Under Traditional Medicare, that service performed by the doctor is coded and reimbursed. The payment is generally the same no matter what conditions or health history that patient brought into the exam room. Straightforward. 

MA plans, however, pay more when more codes are added to a diagnosis.

Plans have advertised this to doctors, incentivizing the providers to add every possible code to a submission for reimbursement. So, if that same patient described above has diabetes, but they’re being treated for an unrelated flu diagnosis, the doctor is incentivized by MA to add a code for diabetes treatment. MA plans, in turn, get paid more by the government based on their enrollee’s health status, as determined based on the diagnoses associated with that individual.

Extrapolate that out across tens of millions of seniors with MA plans, and it’s clear MA plans are significantly overcharging the federal government because of over-coding. 

One solution I find appealing: similar to fee-for-service, create a new baseline for payments in MA plans to remove the incentive to add more codes to submissions. Proposals I’ve seen would pay providers more than traditional Medicare but without creating the plan-driven incentive for doctors to over-code.  

5. Focusing in on Medicare Advantage network cuts in rural areas 

Rural America is older and unhealthier than the national average. This should be the area where MA plans should experience the highest utilization. 

Instead, we’re seeing that the aggressive practices insurers use to maximize profits force many rural hospitals to cancel their contracts with MA plans. As we wrote about at length in December, MA is becoming a ghost benefit for seniors living in rural communities. The reimbursement rates these plans pay hospitals in rural communities are significantly lower than traditional Medicare. That has further stressed the low margins rural hospitals face. 

As Congressional focus on MA grows, I predict more bipartisan recommendations to come forth that address the growing gap between MA plan payments and what hospitals need to be paid in rural areas.

If MA is not accepted by providers in older, rural America, then truly, what purpose does it serve? 

The great Medicare Advantage marketing scam: How for-profit health insurers convince seniors to enroll in private Medicare plans

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Healthcare Reform, Marketing Deceptive, Medicaid, Medicare, Medicare Advantage, Medicare Advantage Insurance Brokers, Private Equity • Leave a comment

https://wendellpotter.substack.com/p/the-great-medicare-advantage-marketing

Jayne Kleinman is bombarded with Medicare Advantage promotions every open enrollment period — even though she has no interest in leaving traditional Medicare, which allows seniors to choose their doctors and get the care they want without interference from multi-billion-dollar insurance companies. 

“My biggest problem with being barraged is that so many of the ads were inaccurate,” Kleinman, a retired social services professional in New Haven County, Connecticut, told HEALTH CARE un-covered.

“They neglect to say that the amount of coverage you get is limited. They don’t talk about what you are losing by leaving traditional Medicare. It feels like insurance companies are manipulating us to get Medicare Advantage plans sold so that they can control the system, as opposed to treating us like human beings.” 

Seniors face a torrent of Medicare Advantage advertising: an analysis by KFF found 9,500 daily TV ads during open enrollment in 2022. A recent survey by the Commonwealth Fund found that 30% of seniors received seven or more phone calls weekly from Medicare Advantage marketers during the most recent open enrollment (Oct. 15 to Dec. 7) for 2024 coverage.

In 2023, a critical milestone was passed: over half of seniors are now enrolled in privatized Medicare Advantage plans. The marketing for these plans nearly always fails to mention how hard it is to return to traditional Medicare once you are in Medicare Advantage, and that the MA plans have closed provider networks and require prior authorization for medical procedures. Instead, the marketing emphasizes the fringe benefits offered by Medicare Advantage plans like gym memberships. 

U.S. Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, criticized the widespread and predatory marketing of Medicare Advantage in a report in November 2022 and has continued to pressure the Biden administration to do more to address the problem. 

The report said that consumer complaints about Medicare Advantage marketing more than doubled from 2020 to 2021 to 41,000. It cites cases such as that of an Oregon man whose switch to Medicare Advantage meant he could no longer afford his prescription drugs, as well as a 94-year-old woman with dementia in a rural area who bought a Medicare Advantage plan that required her to obtain care miles further from her residence than she had to travel before. 

When open enrollment began last fall, it was “the start of a marketing barrage as marketing middlemen look to collect seniors’ information in order to bombard them with direct mail, emails, and phone calls to get them to enroll,” Wyden stated in a letter to the Centers for Medicare and Medicaid Services (CMS), which was signed by the other Democrats on the Senate Finance Committee. 

Just three weeks after Wyden sent the letter, CMS released a proposed rule reforming Medicare Advantage practices that the main lobby group for Medicare Advantage plans, the Better Medicare Alliance, endorsed. 

But key recommendations by Wyden were missing, including a ban on list acquisition by Medicare Advantage third-party marketing organizations, which includes brokers, and banning brokers that call beneficiaries multiple times a day for days in a row.

Among the prominent third-party marketing organizations is TogetherHealth, a subsidiary of Benefytt Technologies, which runs ads featuring former football star Joe Namath.

In August 2022, the Federal Trade Commission forced Benefytt to repay $100 million for fraudulent activities. The month before, the Securities and Exchange Commission levied more than $12 million in fines against Benefytt.

But CMS continues to allow Benefytt to work as a broker. Benefytt is owned by Madison Dearborn Partners, a Chicago-based private equity firm with ties to former Chicago mayor and current Ambassador to Japan Rahm Emanuel. Benefytt collects leads on potential customers, which they then sell to brokers and insurers to aggressively target seniors. CMS did not provide comment as to why they had not blocked Benefytt’s continuing work as a third-party marketing organization for Medicare. 

Two different rounds of rule-making on Medicare Advantage marketing in 2023 instead focused on such reforms as reining in exaggerated claims and excessive broker compensation. 

The enormous profits generated by Medicare Advantage plans — costing the federal government as much as $140 billion annually in overpayments to private companies — explains what drives the aggressive and often unethical marketing practices, said David Lipschutz, an associate director at the Center for Medicare Advocacy. 

“The fact is, there is an increasingly imbalanced playing field between Medicare Advantage and traditional Medicare,” he said. “Medicare Advantage is being favored in many ways. Medicare Advantage plans are paid more than what traditional Medicare spends on a given beneficiary.

Those factors combined with the fact that they generate such profits for insurance companies, leads to those companies doing everything they can to maximize enrollment.”

Adding to the problem, Lipschutz argued, was the enormous influence of the health insurance industry in Washington. Health insurers spent more than $33 million lobbying Washington in just the first three quarters of 2023 alone. 

“There is no real organized lobby for traditional Medicare, or organized advertising efforts,” he said. “During open enrollment, 80% of Medicare-related ads have to do with Medicare Advantage. We regularly encounter very well-educated and savvy folks who are tripped up by advertising and lured in by the bells and whistles. The deck is stacked against the consumer.”

Private equity firms have made a large investment in the Medicare Advantage brokerage and marketing sector, in addition to Madison Dearborn’s acquisition of Benefytt. Bain Capital, which Sen. Mitt Romney (R-Utah) co-founded, invested $150 million in Enhance Health, a Medicare Advantage broker, in 2021.

The CEO of EasyHealth, another private equity-backed brokerage, told Modern Healthcare in 2021 that “Insurance distribution is our Trojan horse into healthcare services.”

As federal law requires truth in advertising, a group of advocacy organizations–led by the Center for Medicare Advocacy, Disability Rights Connecticut, and the National Health Law Project–cited what they considered blatantly deceptive marketing by UnitedHealthcare to people who are eligible for both Medicare and Medicaid, in a complaint to CMS. 

UnitedHealthcare had purchased ads in the Hartford Courant asking seniors in large bold-faced type: “Eligible for Medicare and Medicaid? You could get more with UnitedHealthcare.” 

People who are eligible for both Medicare and Medicaid due to their income level are better off in traditional Medicare than Medicare Advantage given that Medicaid covers their out-of-pocket costs, meaning that they have wide latitude to choose their doctors, hospitals and medical procedures.

Sheldon Toubman, an attorney with Disability Rights Connecticut who worked to draft the complaint, framed the ad in the broader context of poor marketing practices by the Medicare Advantage industry. 

“I have been aware for a long time of basically fraudulent advertising in the MA insurance industry,” Toubman told HEALTH CARE un-covered. “There’s an overriding misrepresentation — they tell you how great Medicare Advantage is, and never the downsides. 

“There are two big downsides of going out of traditional Medicare:

They don’t tell you that you give up the broad Medicare provider network, which has nearly every doctor. And should you need expensive medical care in Medicare Advantage, you will learn there are prior authorization requirements. Traditional Medicare does almost no prior authorization, so you don’t have that obstacle. They don’t ever tell you any of that,” he said.

But it is marketing to dual-eligible individuals that is arguably the most problematic, Toubman argued. “They have Medicare and they are also low income. Because they are low-income, they also have Medicaid.

“Medicaid is a broader program — it covers a lot of things that Medicare doesn’t cover.

In Connecticut, 92,000 dual-eligible seniors have been ‘persuaded’ to sign up for Medicare Advantage. What’s outrageous about the marketing is they get you to sign up by offering extra services. … If you look at the ad in the Hartford Courant, it says you could get more, with the only real benefit being $130 per month toward food. But you now have this problem of a more limited provider network and prior authorization. UnitedHealth is doing false advertising.”

It’s a nationwide problem, Toubman said. “All insurers are doing this everywhere. We’re asking CMS and the Federal Trade Commission to conduct a nationwide investigation of this kind of problem. The failure to tell people that they give up their broader Medicare network — they don’t tell anybody that.”

For Jayne Kleinman, the unending ads are about one thing only: insurance industry profits. “Medicare Advantage has been strictly based on the people who make millions of dollars at the top of the company making more,” she said. “It’s all about money, not about you as an individual. Every time I saw an ad I’d get angry every single time — because I felt they were misleading people. The Medicare Advantage insurers are trying to scam people out of an interest of making money.”

Health Care Sharing Ministries Leave Consumers with Unpaid Medical Claims

Posted on by • Posted in Denial, Health Care Sharing Ministries (HCSMs), Health Insurance Coverage Adequacy, Health Policy, Marketing Deceptive, Out of Pocket Expenses, Public Good, Public Perception, Underinsured, Uninsured • Leave a comment

https://www.commonwealthfund.org/blog/2023/health-care-sharing-ministries-leave-consumers-unpaid-medical-claims

Health care sharing ministries (HCSMs) claim to offer health coverage: members follow a common set of religious or ethical beliefs and make monthly payments to help pay the qualifying medical expenses of other members.

These products often appear comparable to insurance, but they lack the consumer protections and benefit standards that apply to comprehensive coverage. HCSMs are under no obligation to pay members’ claims and often require members to negotiate discounts or seek charity care from health care providers.

Because of how HCSMs are marketed, consumers may have difficulty identifying the significant limitations of these arrangements and risk getting stuck with unpaid bills. Until recently, states did not have access to data on HCSMs’ enrollment, operations, and finances.

Massachusetts and Colorado have begun to fill these gaps, and the data they have obtained are revealing. The Massachusetts marketplace began requiring HCSMs to report key data in 2020; and last year, Colorado became the first state to require comprehensive data from all HCSMs enrolling Colorado residents. The state’s first report provides a detailed look at HCSMs selling memberships in Colorado.

What’s in Colorado’s First Report?

The data show HCSMs have grown to include far more members than previously understood and shed light on risks for consumers who pay monthly fees with an expectation that their membership will cover health care claims.

Greater than expected enrollment. National enrollment for the HCSMs included in the Colorado report is larger than previously recognized: 1.7 million people. In Colorado alone, HCSM enrollment (at least 68,000) is equivalent to 30 percent of marketplace enrollment. Because HCSMs often exclude essential health services and are therefore more attractive to people who are relatively healthy, enrollment of this size, relative to marketplace enrollment, may increase premiums for marketplace plans.

It also means a significant number of people have forgone comprehensive coverage and federal subsidies to buy this alternative arrangement that does not guarantee health care costs will be paid.

One HCSM recently surveyed its members and found 42 percent had incomes under 200 percent of the federal poverty level (about $50,000 annually for a family of three). Individuals and families at this income level would likely be eligible for low- or no-cost coverage in the marketplace or Medicaid.

Broker-driven marketing. Seven HCSMs reported using brokers to market their plans; some said they rely heavily or exclusively on brokers to grow membership. About one-third of all enrollment in these seven HCSMs was attributed to brokers.

Because HCSMs pay substantially higher commissions (15% to 20%) than marketplace insurers (2.6%) typically do, brokers have an incentive to place consumers in these arrangements.

Unpaid claims. Though their members submitted about $362 million in claims during the reporting period, the HCSMs asserted that only one-third of this amount — about $132 million — was eligible for payment. During the same time period, HCSMs brought in about $97 million, resulting in an apparent shortfall of $35 million. The low share of eligible claims is attributable in part to the HCSMs’ strict rules that disallow reimbursement for various types of care.

In addition, HCSMs have broad flexibility to refuse sharing of a claim even if it otherwise meets the rules. For example, HCSMs often require their members to negotiate their own discounts or seek charity care from health care providers before their claims will be eligible for sharing.

Essential care ineligible for sharing. HCSMs reported they exclude from sharing any expenses for certain essential health care, including costs related to preventive care, mental health care, and substance use disorders, and exclude coverage for many preexisting conditions, including asthma, autism, cancer, diabetes, and hypertension. Alternatively, comprehensive insurance must cover essential health benefits and all preexisting conditions.

Getting Uniform Data Is Challenging but Essential

The first-year report shows the challenges of obtaining data from HCSMs that are not subject to any of the standards or oversight that apply to comprehensive health insurance. Regulators determined that several HCSMs marketing memberships in Colorado had failed to report data and getting complete and accurate data from those that did was difficult. A second report, recently released, indicates those challenges continue, making it impossible to draw comparisons between the two years. Still, by requiring HCSMs to use templates and state-defined terms to submit data in a uniform way, Colorado regulators seem to be on the path to a clearer understanding of how HCSMs are working, their financial solvency, and their effect on state residents and the health insurance market. Indeed, data in the second report show the risks to consumers described above persist.

Looking Ahead

Colorado’s annual requirement to share data will help regulators better understand HCSM operations and finances and, with improved compliance to data submission requirements, should allow for comparisons across HCSMs and from year to year. Data can help point regulators to HCSMs that warrant closer scrutiny and identify for policymakers ways to better protect consumers who may lack a clear understanding of the financial risks of HCSM membership.

The Potential for SHIPs to Combat Medicare Misinformation and Deceptive Marketing

Posted on by • Posted in Health Insurance Coverage Adequacy, Marketing, Marketing Deceptive, Medicare, Medicare Advantage, Medicare Enrollment, Medicare Part D, Misinformation, Mislead, Misleading, Out of Network, Out of Pocket Expenses, Out-of-Network, State Health Insurance Assistance Program (SHIP) • Leave a comment
The Potential for SHIPs to Combat Medicare Misinformation and Deceptive Marketing

With Medicare’s Annual Election Period (also known as Open Enrollment) beginning on October 15th, over 65 million adults across the United States will have until December 7th to decide whether they plan to renew or change their Medicare coverage. Beneficiaries choose between Traditional Medicare (TM) and a variety of Medicare Advantage (MA) plans and prescription drug coverage.

For this enrollment cycle, it is estimated that the average beneficiary will have over 40 plans to choose from, leading to complexity. For those who are dually eligible for both Medicare and Medicaid benefits, there is an even greater number of options for them to consider, especially if they live in areas where integrated options such as dual-eligible special needs plans and Medicare-Medicaid plans are available.

As the US population continues to age and the number of Medicare enrollees grow, it is important to understand how beneficiaries make their coverage decisions and ensure they are protected from any misinformation in the process.

Though already complex, the plan selection process for older adults is further complicated by the deceptive marketing tactics that brokers, agents, and third-party marketing organizations (TPMOs) have employed in recent years. In a recent study, the Commonwealth Fund identified how some of these practices are driven by the financial incentives associated with enrolling beneficiaries in particular MA plans.

Between robocalls and misleading television advertisements, many beneficiaries across the country have found themselves enrolled in MA plans they did not intend to enroll in, or that did not cover services or in-network providers that they were initially marketed. In a sweeping review of Medicare Open Enrollment-related television ads, Kaiser Family Foundation found that the majority of Open Enrollment-related advertisements last year promoted the Medicare logo and privately-operated hotlines, misleading beneficiaries into believing these were government sponsored ads and helplines.

Acknowledging the growing concerns and complaints among beneficiaries, the Centers for Medicare and Medicaid Services (CMS) announced that starting in 2024, Medicare-related television ads must be approved in advance of airing and cannot contain plan names or Medicare logos and images that misrepresent their organization or agency. Additional consumer protections included in the 2024 MA and Part D Final Rule will hold brokers, agents, and other TPMOs to higher standards of providing transparent, quality information. These activities include monitoring TPMO behavior, regulating how and when they market to beneficiaries, ensuring brokers review the full list of options and choices available to a beneficiary, and going through a detailed, standardized set of pre-enrollment questions. There is also an increased effort in getting beneficiaries to use some of the federally funded tools and resources available to assist in their coverage decisions.

Some of these tools include the Medicare.gov website, the CMS Medicare Plan Compare tool, and a 1-800-MEDICARE hotline to help inform beneficiaries about their benefits. However, a study by Hernandez et al. revealed that very few Medicare beneficiaries utilized these tools and often felt more comfortable discussing their options in-person with brokers or family members and friends, even though these sources may be biased or potentially inaccurate.  Additionally, it is important to recognize that navigating these tools requires some degree of health literacy and technological proficiency, which may disproportionately affect those who are low-income, have lower levels of education, or are non-native English speakers.

The State Health Insurance Assistance Program (SHIP), however, is a free and unbiased resource for Medicare counseling that few beneficiaries are aware of. In 1990, the federal government implemented SHIPs to help support Medicare beneficiaries with free, one-to-one health insurance counseling and education within their communities. It is currently run by the Administration for Community Living (ACL). The ACL administers grants to states, who in turn provide funding to community-level subgrantees to maintain various networks of full-time, part-time, and/or volunteer counselors. The latest available data suggests that SHIPs provided assistance to 2.7 million Medicare beneficiaries from April 2018 through March 2019—just 4.5% of the eligible Medicare population.

While some states had greater success, serving over 10% of their eligible population, others were only able to reach as few as 2%. A 2018 evaluation of California’s SHIP, called HICAP (Health Insurance Counseling & Advocacy Program), highlighted the strengths of this community-based counseling system. HICAP reported high rates of engagement, citing their ability to deliver uniquely tailored counseling to beneficiaries in their native languages and through in-person or hybrid settings depending on the beneficiary’s condition or preferences. Moreover, strong marketing efforts via Spanish radio shows and mailing postcards were particularly effective in reaching “hard-to-locate” populations. However, the program did experience challenges given the variation in operations across locations, citing concerns over the recruitment, training and retention of volunteers and paid staff.

In recognition of SHIP’s potential to provide an unbiased alternative to brokers and combat misinformation, CMS finalized a requirement in the 2024 MA and Part D rule that TPMOs are to provide a disclaimer citing SHIP as an option for beneficiaries to obtain additional help (42 CFR § 422.2267(e )(41)). But despite SHIP’s promise, some beneficiary advocates have worried that the multi-tiered, volunteer, and part-time driven delivery model that characterizes most SHIPs leads to access and quality gaps. This is especially a concern among vulnerable beneficiaries who may live in low-income neighborhoods, have disabilities, or limited English proficiency. Given their historically low utilization rates and limited visibility, others have expressed concern that SHIPs may be ill-equipped to handle an increased demand for services in the coming year, due to more Medicare beneficiaries being advised of their existence through TPMO disclaimers. With the limited evidence about SHIP’s performance and outreach nationally, given the diffuse nature of the program, it will be important to understand some of the barriers and facilitators they face to delivering timely and accurate Medicare counseling.

The free and unbiased nature of the SHIP program presents a promising alternative to helping beneficiaries navigate complex plan choices for Open Enrollment. As MA enrollment increases and as plan choices become more complex, the SHIP program should be monitored for potential inequities in access to and quality of services based on area income.

For more information about your state’s SHIP program and to find a local Medicare counselor, please visit https://www.shiphelp.org/.