The Medicare Advantage Marketing Problem and Where It’s Headed

September 21, 2023 - Each year, Medicare’s open enrollment period starts mid-October and is preceded by an influx of marketing materials advertising private Medicare Advantage, Medicare Part D, and Medigap plans. While marketing practices are intended to inform consumers of their health plan options, many strategies have led to confusion and complaints from beneficiaries.

Since 2022, the Biden Administration has increased efforts to improve oversight of Medicare and Medicare Advantage marketing activities. Strategies to curb misleading advertising of Medicare Advantage are especially important as 50 percent of all Medicare beneficiaries are enrolled in the private program.

Deceptive marketing by the numbers

Medicare Advantage marketing can consist of direct mailings, telemarketing, and advertising on radio, television, websites, and social media.

According to a report from the Commonwealth Fund, the majority of older adults received some type of plan marketing between November 30 and December 8, 2022. The survey included a nationally representative sample of 2,001 adults 65 and older.

Over three-quarters of adults reported seeing one or more television and online ads per day, while 30 percent said they received seven or more phone calls per week.

Some of the experiences that respondents mentioned would be considered fraud by federal authorities, such as a marketer asking for a beneficiary’s Medicare or Social Security number before offering plan details or calls advertising time-limited special discounts.

Additionally, adults had experiences with false advertising or misleading marketing information.

For example, some respondents reported seeing, reading, or receiving advertisements that made them believe something about a plan they later found was untrue. Around one in ten adults said they enrolled in a plan thinking their doctor was in the network but later learned there were certain limitations or their doctor was out of network.

These misleading marketing experiences were more likely to impact low-income seniors, the Commonwealth Fund brief found.

A KFF analysis also offered insight into how Medicare Advantage plans and brokers market Medicare. Between October 1 and December 7, 2022, there were over 640,000 airings of English-language Medicare advertisements played on broadcast television and national cable.

Almost 75 percent of the television ads were sponsored by health insurers, while brokers and other third-party entities sponsored 21 percent. Furthermore, most ads (86.4 percent) were promoting Medicare Advantage plans.

More than a quarter of the advertisements showed the Medicare card or a similar image, a practice that CMS has prohibited for the 2023 open enrollment period. The ads often included a “Medicare” hotline other than the official Medicare line run by the federal government.

The marketing materials tended to highlight low healthcare costs and supplemental benefits, but few ads emphasized access to doctors or quality star ratings.

Early steps toward more oversight 

In response to deceptive marketing practices and beneficiary complaints, the Senate Finance Committee has been working to increase oversight. In August 2022, Senate Finance Committee Chair Ron Wyden requested information from health insurers on Medicare Advantage marketing practices.

Wyden is responsible for Senate oversight of Medicare Advantage and Part D plans. He sent letters to 15 state insurance commissioners and state health insurance assistance programs requesting information on beneficiary complaints and examples of potentially misleading marketing materials.

The Committee received information from 14 states and urged CMS to conduct regular oversight of Medicare Advantage marketing materials, monitor disenrollment patterns, and hold agents and brokers accountable for deceptive practices.

Policies in the final rule

In April 2023, CMS released the Medicare Advantage and Part D final rule, which included policies to increase marketing oversight. Starting in 2024, the agency will prohibit ads that use Medicare logos or other words and imagery in confusing or misleading ways. In addition, ads that do not mention a specific plan name are prohibited.

According to a fact sheet on the final rule, CMS reinstated protections that prevent predatory behavior and finalized changes that strengthen plans’ role in monitoring agent and broker activity. The rule also includes requirements to ensure beneficiaries receive accurate information about Medicare coverage and know how to access this information from other sources.

The regulations in the final rule emphasize the need for Medicare Advantage plans to have more proactive oversight of agent and broker activities, as opposed to reactive strategies, Laura Dillon, senior manager of the Washington Council practice within Ernst & Young, told HealthPayerIntelligence.

“One of the key pieces of the rule is it will require plans to have a new oversight plan that does a proactive review of grievances and complaints and random samplings of sales and marketing calls,” Dillon shared.

Payer strategies for compliance

With a slew of new marketing regulations, payers must stay on top of the changes to protect beneficiaries from misleading information.

“Plans [should] have a process to absorb these changes and integrate them across not only their plans but also get the information out to those who they are contracting with,” Dillon said.

Plans should ensure that their compliance activities do not operate in siloes and continuously discuss oversight policies with their marketing teams and other departments, Dillon noted.

Although it may be vendors and brokers who are deploying faulty marketing materials, ultimately, it is the plans’ responsibility to prevent these practices by creating oversight programs, Helaine Fingold, partner at Epstein Becker & Green, explained to HealthPayerIntelligence.

“Plans need to be proactive in understanding how people get to them and how they’re being presented, or even just the generic marketing of the entities that they contract with downstream and some they may not even contract with, but that are part of the chain of marketing and enrollment,” Fingold said. “They need a more intimate understanding of how that’s being handled.”

Another critical area payers should address is aligning marketing materials with the available products in a given geographic area.

“Some broad-based marketing says beneficiaries could be eligible for additional benefits like vision, dental, or hearing aids, but it depends upon where you live, what plans are available where you live, and your eligibility for those plans,” Fingold pointed out.

Medicare Advantage plans may also leverage different technologies to help them comply with marketing regulations. Technology can not only make compliance less burdensome but also help create marketing content that is more individualized and relevant for beneficiaries, Dillon indicated.

“This is potentially a place that’s pretty nascent still and growing, but I think that there are plans that see a lot of potential for [artificial intelligence (AI)] in particular to help them comply in the future,” Dillon said.

“For example, as they have to develop new marketing materials, new plan documents, is there a way for AI to relieve the burden for them and ensure they’re complying with this ever-changing landscape of marketing requirements coming down from CMS?”