A dozen U.S. Senators and three witnesses sharply criticized Medicare Advantage (MA) marketing schemes during a Senate Finance Committee hearing yesterday.

Participants blasted the “unscrupulous,” “deceptive,” and “rip-off” tactics and high commissions that enroll seniors in plans that don’t meet their healthcare needs.

With the 2024 Medicare re-enrollment window in its fourth day, committee chairman Sen. Ron Wyden (D-Ore.) pointed to federal investigators’ findings that “marketing middlemen are the latest set of sleazy private-sector scoundrels targeting seniors on Medicare Advantage.”

Wyden said these “big marketing companies … [are] hijacking personal information from as many seniors as possible, and then funnel the personal information to health plans that pay the sleazy marketers the most money.”

Rapidly increasing MA sales commissions were a theme throughout the hearing. Hearing witness Krista Hoglund, who is the CEO of a small MA plan in Wisconsin covering 60,000 lives, said MA companies now pay $1,300 or more to an agent for enrolling a new beneficiary — far above the CMS-approved cap of $611.

This aggressive practice of rewarding brokers with a variety of “add-on” bonuses resulted in two-thirds of the people who enrolled in MA plans during re-enrollment last year signing up for just two large national for-profit companies instead of smaller plans like hers, she said.

“Unfortunately, we know some large firms and third-party marketing organizations leverage their influence for financial gain rather than what’s in the best interest of the consumer,” Hoglund said. While many plan agents are trustworthy, many are not, she said.

Wyden said insurance experts have estimated those commissions cost the Medicare program $6 billion in 2022 alone. Those dollars “line middlemen’s pockets … who may have sold your elderly parents, your grandparents, or your neighbors the wrong plan,” Wyden said. “It’s outrageous. It’s a rip-off and it’s got to stop.”

Christina Reeg, director of the Ohio Senior Health Insurance Information Program — one of a Network of 54 federally funded unbiased SHIP counseling programs — said MA sales pitches often stress benefits that are of minimal importance to a person’s healthcare.

Seniors are “more apt to join a plan for the added benefits, specifically the over-the-counter allowances and other cash rewards” and debit cards, but ignore more important plan offerings like who is in the provider network, Reeg said.

Reeg would rather beneficiaries look at things like daily copays for inpatient hospitalization or maximum out-of-pocket costs.

Counselors try to focus their clients on specific providers in the plan’s network, coverage of mental health needs, and other critically needed services. However, it doesn’t always sink in, she said. Instead, some clients have become “very upset with us because we could not use Medicare’s Plan Finder tool to order the plans [from] the highest debit card.”

Reeg’s program covers 2.5 million beneficiaries in 88 Ohio counties, some of which have 100 health plan options, making the task overwhelming for seniors. The Medicare Plan Finder helps, but it too has limits that she wishes Congress could fix. For instance, it doesn’t list the providers in the MA plans’ networks, so beneficiaries have to call each provider and make sure they really are covered by the plan, she said.

That led some Senators to lambast the increasing problem of “ghost” networks, which Wyden called “about as stark a rip-off as I can imagine.”

These are in-network provider directories that are either outright “fraudulent” or the providers exist but their patients can’t schedule appointments with them. That’s according to witness Cobi Blumenfeld-Gantz, CEO of Chapter, a New York City-based counseling program for seniors. He founded the company after a broker sold his parents a plan that was more expensive than an identical alternative, he said.

Although millions of beneficiaries use brokers to find the right plan, the problem is that “brokers are not required to put consumers first. I think that needs to change,” Blumenfeld-Gantz said.

Congress and CMS should also require plans to publish data now held secret so that seniors and their helpers can get the information to make the right choice, he said.

Ghost networks also are a pet peeve of Sen. Michael Bennet (D-Colo.), who pointed to CMS’ routine review of dozens of MA plan directories that consistently show errors, such as providers who don’t work at the listed location or were out of network.

“The misinformation often leads to unexpected and higher out-of-pocket costs for Colorado seniors,” Bennet said. He’s an author of a bill aimed at preventing seniors from having to pay out-of-network charges for care from doctors inaccurately listed as in-network.

Another hot-button topic for several senators is the high rate of denials of prior authorization requests, which means MA plans get out of paying for services Medicare should cover. Sen. James Lankford (R-Okla.) noted that many of the rural hospitals in his state “just won’t take Medicare Advantage period. They just cut everybody off and said, we can’t do it because we can’t afford the constant chasing after all the denials.”

Bennet echoed his concern. “Consistently, hospitals and their patients experience hospital admission denials, delays in care, and plans refusing to pay after they’ve approved service,” he said. One hospital executive told him that in the past 6 months, all 45 of its hospital admissions requests for one MA plan were denied.

Bennet’s constituents with MA plans “consistently tell my office that their surgeries are delayed often for months, or that they were lied to about their level of coverage, or that their plan was too expensive and that their claims are denied when they’re told the service should have been or would have been covered.”

Sen. Maggie Hassan (D-N.H.) said her constituents complain of “unscrupulous marketing” of plans’ prescription coverage — a big reason many beneficiaries choose MA plans — but then don’t actually cover the drugs patients need, or change the tier or price category or stop covering them altogether during the plan year.

“Too often consumers feel that MA plans over-promise and then under-deliver on results,” she said.

Sen. Elizabeth Warren (D-Mass.), the final speaker, summed up her view of the issue. Larger MA companies use a “war chest of advertising money” to generate “deceptive marketing tactics to lure seniors into the wrong plans.”

They get this war chest, she said, by “making beneficiaries look as sick as possible by stuffing their medical records with as many diagnosis codes as possible, which means the government pays insurers more money.”

“Government watchdogs have uncovered hundreds of billions of dollars in overpayments that result from insurance companies gaming the system like this,” she said.