Senator Probes MA Exchanges’ Marketing Tactics

An article from

Dive Brief:

• Senate Finance Committee Chair Ron Wyden, D-Ore., sent letters to the executives of several health insurance marketplaces on Tuesday inquiring into the marketing tactics they use to sell Medicare Advantage plans to seniors.
• The letters, sent on behalf of the Committee to the heads of GoHealth, eHealth, Agent Pipeline, SelectQuote and TRANZACT, ask the exchanges how they generate leads and partner with third-party marketing companies to sell the plans.
• The probe comes as lawmakers and regulators ramp up scrutiny into MA plans’ marketing tactics. Late last year, the CMS proposed a rule aimed at curbing predatory marketing and capping extra broker payments in the plans.

Dive Insight:

MA plans, which are administered by private insurers, have become increasingly popular among seniors. Last year, more than half of those eligible for traditional Medicare were enrolled in MA plans, according to KFF.

But concerns about MA plans’ marketing tactics have risen in tandem with their popularity.

Complaints of inappropriate MA marketing among beneficiaries more than doubled from 2020 to 2021, causing the Senate Finance Committee to launch an inquiry into the practices in 2022.

The Senate investigation found “widespread evidence of unfair tactics,” including misleading TV advertisements and fraudulent mailers, according to the letters.

The Committee also heard testimony that the Medicare open enrollment period creates an “open season” on seniors, and their personal information is sold between third-party marketing companies, the letters said.

“The largely unregulated sale of seniors’ information to lead generators and [third-party marketing organizations] has led to a race to the bottom as unscrupulous actors put their own financial interests ahead of seniors’ health needs,” Wyden said in a Tuesday release.

Concerns prompted the CMS to issue a final rule in April requiring MA plans to curtail misleading marketing. Regulators said the rule would strengthen accountability for MA plans.

Lawmakers have also expressed concerns about payments to MA brokers. Currently, MA brokers receive a fixed amount from Medicare, in addition to add-on payments from insurers. Additional commissions can allow brokers to collect upwards of $1,300 per enrollee each year, according to the Alliance of Community Health Plans. 

In November, the CMS issued a rule proposing to cap extra payments to MA brokers. The rule would create a ceiling for total compensation and would prohibit contracts between MA plans and marketing middlemen.

In the letters, the Senate committee asked for information regarding the health exchanges’ marketing practices, including which states they operate in, how many third-party marketing organizations they contract with, information collected when purchasing leads and the “rapid disenrollment rate” of seniors among certain MA plans.