Deceptive Medicare marketing draws ire of low-income seniors

Photo: Manuel Breva Colmiero/Getty Images

Almost everyone 65 and older has received marketing related to Medicare, but some have reported experiences with Medicare marketing that violate federal rules, including marketers asking for Social Security or Medicare numbers outside the enrollment process and advertising special, time-limited discounts – which are not permitted. 

That's according to a new Commonwealth Fund study, which found the problem especially prevalent among low-income seniors, who are twice as likely to file complaints regarding what they perceive as shady marketing practices, compared to higher-income beneficiaries.

Reports of seeing, reading, or receiving advertising information that was later found to be untrue were significantly more common among people with incomes of less than $25,000 than those with incomes above that level.

About one in 10 said they had enrolled in a plan under the impression that their doctor was covered, only later to learn there were limitations on seeing that doctor, or that the doctor was not in the plan's network, the survey found.

While Medicare Advantage plans, brokers and agents are responsible for much of the marketing, it's also generated by the companies that provide the additional benefits these plans offer, findings showed. About two-thirds of people aged 65 and older reported seeing marketing materials from companies that provide Medicare Advantage benefits, like Silver Sneakers, which connects beneficiaries with gym memberships.

Among people who reported seeing ads from various companies, two in five (41%) said that marketing encouraged enrollment in a Medicare Advantage plan, the report said.

WHAT'S THE IMPACT?

The Centers for Medicare and Medicaid Services regulates Medicare marketing and prohibits certain activities. For example, marketers can't call beneficiaries unless they agreed to be contacted or have requested the call, and brokers and agents can't coerce or otherwise pressure beneficiaries into signing up for a plan. CMS also does not endorse or market specific plans. According to the Commonwealth Fund, such materials that seem to be from Medicare are likely to have been sent by a marketer that is inaccurately characterizing its relationship with CMS and the Medicare program.

Despite CMS rules, unsolicited calls and emails from plans or plan representatives are a common theme running throughout the survey. A larger share of Black adults than white adults reported unsolicited calls in the past 12 months (88% vs. 76%).

Most adults aged 65 and older (70%) said that use of the Medicare name in marketing information does not affect their confidence in that information. Of the remainder who said the Medicare name does affect their confidence, a somewhat larger share said its mention made them less confident rather than more confident in the marketing information (19% vs. 11%, respectively).

Most (75%) also said that they trust Medicare private plans; only a quarter said they did not trust them. For the most part, marketing efforts did not change the level of trust in these plans (78%). And most didn't stay on the phone when they received an unsolicited marketing call. Of the 14% who said they remained on the line, those with household incomes less than $25,000 were more likely to do so than those with incomes of $50,000 or more.

According to the Commonwealth Fund, fraud and misleading marketing can confuse people and cause them to enroll in a plan that doesn't meet their needs. These activities also can affect how people view the Medicare program and the insurers behind private plans.

THE LARGER TREND

In late 2022, CMS responded to complaints that recent Medicare Advantage advertisements and marketing materials have been "confusing, misleading or inaccurate," at least in the minds of consumers.

Kathryn A. Coleman, director of the agency's Medicare Drug and Health Plan Contract Administration Group, sent a letter to all Medicare Advantage Organizations and prescription drug plan sponsors saying CMS will enhance its review of MA-related marketing materials. Such materials should be submitted under the "File and Use" regulatory authority for MA and Part D drug plans.

CMS reviewed thousands of complaints and hundreds of audio calls, and said it identified numerous issues linked to television and newspaper ads, mailings, and internet searches. The agency called numbers associated with these ads in a "secret shopping" campaign meant to monitor these advertisements.

"Our secret shopping activities have discovered that some agents were not complying with current regulation and unduly pressuring beneficiaries, as well as failing to provide accurate or enough information to assist a beneficiary in making an informed enrollment decision," wrote Coleman.

CMS said the number of Medicare beneficiary complaints about private sector marketing for Medicare Advantage plans more than doubled from 2020 to 2021.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com