Democrat Takes Aim at Medicare Advantage Ads As Seniors Call Foul

A Democratic senator has launched a probe into Medicare Advantage's advertising practices after seniors complained of being misled and left with fewer, costlier healthcare options.

Sen. Ron Wyden, a Democrat from Oregon and the chair of the Senate Finance Committee, has issued letters to the leaders of five Medicare plan advertisers as he looks to end deceptive marketing to seniors.

Wyden said his probe looks into how "companies use insurance agents, lead generators and other data to target, market to and direct seniors toward certain Medicare Advantage plans."

Medicare Advantage plans, which are a privatized version of the federal Medicare, often allow seniors to get lower premiums and vision, dental and healthcare all bundled together. But there can be a hidden cost, namely higher out-of-pocket payments for treatments and a limited number of doctors who accept your insurance.

"For years, seniors have been bombarded with TV ads, flyers and phone calls about which health plan is 'right' for them," Wyden told Newsweek. "These marketing middlemen have exploded on the scene and are driven by padding their pockets."

Wyden said seniors' information is often sold by these marketing companies multiple times as they look to enroll seniors in plans regardless of if they are the right fit for their health needs.

"It's taxpayer dollars which are lining these middlemen pockets," Wyden said. "So ultimately, my goal is to stop the deceitful marketing practices, protect the privacy of seniors and make sure every senior in America gets the healthcare they need."

Previously, the Centers for Medicare and Medicaid Services issued new rules on Medicare Advantage marketing, but so far it is unclear if this is impacting what seniors are being told when marketers call and how they are choosing between various coverage options.

Wyden said he's specifically looking into the data from marketers in 2018 and 2022 before any of these rules were issued.

While Medicare Advantage used to be a largely secondary option to traditional Medicare, more than half of seniors are currently on such plans today. Some say this is potentially caused by aggressive and sometimes unclear advertising to seniors who are confused about their best option.

After the pandemic, it became common to see widespread television advertising campaigns targeted at helping seniors figure out how to sign up for Medicare. But once many seniors called the phone number on screen, they were barraged with salespeople specifically looking to sign them up for an Advantage plan.

Current rules for third-party marketing organizations stipulate they must record calls and offer standard disclaimers. Agents who speak to many customers at educational meetings are also barred from setting up Medicare sales appointments immediately after.

But there is still doubt that these marketers are exerting too much influence over seniors when it comes time to pick a plan.

Wyden's letter, which was addressed to eHealth, GoHealth, SelectQuote, Willis and Integrity Marketing, asked the companies to list their lead sources for both 2018 and 2022, as well as their five biggest lead sources for those years. The senator is also seeking information on the cost of different types of third-party marketing organization leads and the strategies used to gather the leads.

The organizations must also share how many career agents and independent contractor agents were employed during 2018 and 2022 and how leads were shared between them as well as the percent of Medicare plan customers that ended up ending their coverage within three months of enrolling.

Wyden is also looking at how the organizations look at how customers want to be contacted about Medicare Advantage plans and is verifying gifts that appealed to get seniors on the plan were low in value.

While Wyden sent out the letters on January 11, responses are not due until January 31.

"Tranzact takes compliance with applicable laws and regulations, and the questions raised by the committee, seriously and will fully cooperate with the request for information," a representative for Tranzact told ThinkAdvisor.

Ongoing Concerns Over Medicare Advantage

Wyden is far from the first to call into question the practices agents use to get seniors signed up for Medicare Advantage plans.

"My concern is connected to the fact that the overall Medicare, Medigap, Advantage plans are so complicated that the 'average' citizen would be hard-pressed to truly be able to 'choose' the appropriate plan for their needs," Linda Muñoz, a senior loan officer who mistakenly signed up for a Medicare Advantage plan, told Newsweek.

Muñoz said she now has to fight for coverage when she goes to the doctor because of how limited the Advantage plans can be.

"It begs the obvious question, 'Why are there so many plans?' to begin with," Muñoz said.

To Muñoz, it's clear that this isn't a worldwide problem, and much of the issues come down to how the United States approaches healthcare for its elderly and disabled.

"I'm quite sure no other senior living in any of the many European nations, or commonwealth nations, or even in much of South America, worries as much as U.S. citizen seniors have to worry about their health concerns and the potential for serious health issues later in their lives and how it could disastrously 'bankrupt' them if their insurance doesn't cover 'that' particular illness or surgery," Muñoz said.

Among her friends, Muñoz said none can actually name what plan they have, and that reflects a larger issue.

"This is insane," Muñoz said. "The British, Canadians, French, etc. do not worry about getting sick ever. They know the health system, even in Britain where there are many flaws, is still going to ultimately take care of their needs."

The lack of clarity, which led to her choosing a plan that does not fit her needs, has led to an ongoing concern as she ages, Muñoz said.

"This has just been a time in my life when I feel completely out of control of my ability to protect myself, and my husband and family, from what could be a terrible end of life," Muñoz said. "I told my husband, if I get really sick, I'll divorce you and put everything in your name so they can't bankrupt us."

Cheryl Mozer, a retired pharmacist living in Blue Springs, Missouri, said the Medicare Advantage plan was great for her parents when they were relatively healthy. But the second their health declined, it revealed a darker side to the alleged advantages.

"When their health declined and they needed expensive care costing thousands of dollars, such as rehab following a hospital stay, we had denial after denial as being 'medically unnecessary,' even though their doctors said it was necessary," Mozer told Newsweek.

"We went through the exhausting appeals process for them and won many of these appeals, but it took away from spending precious time with them while they were ill and in decline."

Now Mozer tells every elderly person she knows to never sign up for an Advantage plan, regardless of how convincing the marketing seems at the time.

"All of the advertising on TV hooks people in," Mozer said. "Yes, they may get free dental and a gym pass, but denial for expensive care is the issue."

If you would like to share your experience with Medicare Advantage with us, please reach out to personalfinance@newsweek.com.