Medicare Advantage insurers face high marketing stakes

Growing public interest in Medicare Advantage plans means insurers are flooding the market with outreach.

Health insurance agents set up enrollment booths at community events. In grocery stores, brokers offer prospective members sign-up sheets, often for private Medicare plans that are co-branded with the retailer. Insurers and their partners send letters to people who meet criteria for specialized plans. Lionel Richie appears on television screens, playing the piano and talking about the “discombobulated” healthcare system while promoting insurtech Devoted Health. Call centers dial until they hear the four magic words: “Do Not Call List.”

The Centers for Medicare and Medicaid Services has taken notice. It is cracking down on how Medicare Advantage plans are promoted to consumers, looking for activities that could be considered misleading. This is the first year insurance companies could be directly penalized for marketing operations tied to their brand—even if the insurer does not hold a contract with an individual broker, agent or lead generator. As insurers ramp up efforts to attract new enrollees, they must ensure marketers aren’t engaging in tactics that could trigger complaints.

“The stakes are quite a bit higher this year,” said Helaine Fingold, a partner at law firm Epstein Becker Green who specializes in health insurance regulations. Fingold previously served as director of CMS’ surveillance division for Medicare Advantage marketing and on the Medicare Payment Advisory Commission, an independent legislative branch that advises Congress on Medicare.

Medicare Advantage plan carriers—and their marketers—are following the money.

The number of older adults enrolled in private Medicare Advantage plans has more than doubled over the last decade to 28 million individuals in 2022, representing 45% of all eligible enrollees, according to a February report by The Chartis Group, a consultancy. By 2025, more than half of all eligible beneficiaries are expected to sign up for the private Medicare program.

As enrollment grows, so has the number of plans. Last year, the average Medicare beneficiary had the choice of 39 Medicare Advantage plans, more than double the number available in 2017, according to a report from the Kaiser Family Foundation.

The insurers managing these plans use a vast network of marketers, call centers and contractors to attract eligible enrollees. The operation includes local and national organizations, online brokers, insurance agents and internal teams. Field marketing organizations act as go-betweens, negotiating sales deals with insurance companies that a network of brokers can then offer to customers. The overall push includes tailoring benefits to target specific populations, and fine-tuning branding efforts for those groups.

“The carriers have, for the most part, improved benefits, and in some cases drastically. The carriers want the market share, especially in Florida,” where the competition is fierce, said Eddy Romero, vice president for Medicare growth strategy and business development at New Health Partners, a field marketing organization based in Miami.

“The plans are getting very aggressive with benefits and trying to beat each other up, and the consumers are going to benefit from this. Those plans that have the right combination of benefits, in the right geographic areas, could really win big,” Romero said.

Orange, California-based insurtech Alignment Health leverages an internal platform to create profiles of potential consumers based on language, over-the-counter shopping trends, care utilization and medication adherence. The technology pulls information from more than 200 company data sources, including electronic health records, hospital admission and claims data, biometric medical devices, consumer and social determinant data and personalized genomics.

It uses the information to tailor its plan benefits and additional outreach.

In Florida and Texas, the insurer this year launched El Único, a $0-premium HMO that features a network of Spanish-speaking providers and service agents for Medicare Advantage patients. In California, the company is offering an HMO that covers wellness services such as acupuncture, cupping and gua cha. The plan also includes a network of Asian grocery stores where members receive $50 monthly grocery allowances.

As part of promoting the plans, Alignment Health runs ads via marketing organizations on Univision to reach Spanish-speaking populations and on the radio to connect with Vietnamese and Chinese populations, said Markets President Dawn Maroney.

Maroney said the efforts and product designs drive positive responses from the market, but did not offer concrete data.

Humana, which has the second-largest Medicare Advantage operation in the country with more than 800 plans across 49 states, developed technology that helps it distinguish various Latino subpopulations across geographic regions and use a diversity of Spanish dialects when marketing Medicare Advantage plans through virtual platforms, such as digital banner ads. Going the extra mile to have that granularity pays off, according to Chief Marketing Officer Jennifer Bazante, who said the insurance company has seen an uptick in the number of Latino consumers enrolled in its health plans.

In addition, the company has Medicare Advantage plans tailored for military veterans and dual eligibles, people eligible for both Medicare and Medicaid coverage. This year, benefits under the Humana Honor plan are expanding via a partnership with military financial services firm USAA, which will help promote the plan to veterans. For dual eligibles, its plans include flexible spending benefits that can be used for transportation, rent and food. Bazante said the varying enhancements help distinguish each plan to potential members as open enrollment is underway.

Bazante said the Louisville, Kentucky-based company will measure the success of its campaigns through enrollment and retention. The insurer aims to grow its Medicare Advantage membership by up to 8.7%, or 400,000 members, during open enrollment this year, executives said during a November earnings call.

“Marketing and distribution work really, really close together in order to be able to understand the customer and match a plan to their needs,” Bazante said.

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The expansion of plans’ marketing operations has increased carriers’ potential for regulatory liability. Complicated operations can make it difficult for plans to keep track of who is selling their products.

CMS in May clarified that plans are responsible for the conduct of the dozens of entities that interact with members before, during and after their enrollment in Medicare Advantage this year. Starting Oct.1, insurance representatives must record every communication they have with every customer—including interactions that do not eventually lead to enrollments—and store the recording for at least 10 years.

The agency plans to conduct secret shopper surveys and could subject insurance companies and plan marketers whose conduct is suspect during open enrollment this year to fines, enrollment freezes or restrictions.

The new regulations come after the number of “marketing misconduct” claims filed by CMS regional office employees, contractors with 1-800-MEDICARE and state advocates surged in 2021 to more than 39,600, a 157% increase from the previous year, according to federal data CMS provided to Modern Healthcare.

Consumers said they had been enrolled unknowingly, pressured into signing up for a new plan or received deceptive information about the benefits offered. Some brokers made it difficult to switch insurance carriers.

The Alliance of Community Health Plans, a trade group for nonprofit insurers, contends marketers accessed state and federal health information hubs to hone their pitches to prospective enrollees. Sellers improperly used patients’ protected personal health information from Medicaid and federal prescription drug databases, according to an October letter ACHP sent to Sen. Ron Wyden (D-Ore.), who chairs the Finance Committee. That led older adults to assume they were speaking with an individual from their existing health plan, the trade group said.

“The emergence of third parties getting into the Medicare enrollment space is worrisome because we do not know necessarily who they are and how they operate,” President and CEO Ceci Connolly said. “Lead generating is a practice that is ripe for some fresh oversight.”

Brokers working for larger health insurance companies and misrepresenting themselves led to higher-than-normal levels of churn among regional insurers, according to ACHP.

For example, Buffalo, New York-based Independent Health Plan said aggressive marketing by a single national for-profit insurer drove disenrollments last year among its Medicare Advantage members. The nonprofit insurer’s service department fielded complaints from more than 70 individuals who unknowingly signed up for the large national company’s plans, said Frank Sava, director of corporate communications.

Lead generating is a practice that is ripe for some fresh oversight."
Ceci Connolly, president and CEO, Alliance of Community Health Plans

 

“We’re seeing an increase this year in that,” Sava said. “A member will go to the pharmacy and fill a prescription, thinking they’re an Independent Health member. They find out the plan they were misled into doesn’t even have prescription drug coverage.”

Independent Health representatives helped the patients re-enroll in plans offered by the company. Sava and Connolly declined to name the large national insurer responsible.

Part of the rise in complaints may be due to sheer number of plans available, along with the murky definition of “misleading.”

“Even if the information on the paper doesn’t appear misleading to you, that doesn’t mean an individual beneficiary who’s 85 years old maybe didn’t find it misleading or didn’t understand something that was said on the phone,” said Epstein Becker Green’s Fingold.

“In general, this is a fairly broad and difficult-to-police area,” she said.

Some insurance agents argue there are relatively few bad actors in the Medicare Advantage arena.

“It’s 0.14% of all enrollments that resulted in a marketing complaint. That’s a small number,” said Michael Keegan, senior advisor for strategic communications at Health Agents for America, a lobbying group for independent insurance agents.

He said the number of complaints increased during the COVID-19 pandemic because more people were staying home, watching TV and paying attention to the Medicare Advantage commercials. The rise in complaints could reflect an increase in marketing too, he said.

The jump also highlights how priorities change between political administrations, said Tricia Beckmann, a director at consultancy Faegre Drinker. Former President Donald Trump’s administration took a softer hand at policing Medicare Advantage marketing efforts than President Joe Biden’s administration.

Now, CMS and its regional offices are taking a closer look at which complaints could be categorized as marketing misconduct. CMS is investing in tools to more effectively search the central complaint tracking module to identify trends among specific brokers and insurers, she said.

“You need to have some type of querying tools to understand if these complaints are driven by specific common variables, like a common actor, common plan, common broker. That type of work is underway,” Beckmann said.

CMS plans to act on patient complaints it receives, as well as on its reviews of insurance agent calls with beneficiaries, a spokesperson wrote in an email. Insurers are required to investigate all allegations made against their contracted agent and terminate a contract if necessary, the CMS spokesperson said. The federal agency will work with insurers to report poor-performing agents to state insurance offices, where representatives could revoke their license to sell health plans.

But CMS didn’t respond to questions about how soon enforcement will begin, and about the full scope of potential enforcement against an individual broker.

“Some of these big brokers may contract with half or more of all the Medicare Advantage plans in the country. If they’re found to be doing something inappropriate or noncompliant, does that then get spread to all of the brokerage? What’s the ramification?” Fingold said.

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If the number of complaints is not curbed, insurance companies could face political hearings, negative publicity and increased government requirements in addition to individual penalties.

In August, the Federal Trade Commission ordered Benefytt Technologies to refund more than $100 million to consumers who unknowingly purchased sham insurance plans on Obamacareplans.com and other misleading websites. In September, House Ways and Means Health Subcommittee Chair Lloyd Doggett (D-Texas) led 30 other Democratic members in recommending changes to the Medicare program, which included reining in aggressive and misleading marketing tactics. And in November, Oregon’s Wyden unveiled the results of a Senate investigation into deceptive tactics used by Medicare Advantage-affiliated groups. The report found marketers were offering members bigger Social Security checks if they switched plans, among other things.

The uptick in attention "does put an onus on health plans to really crack down on some of the marketing issues,” Connolly said. “That’s an added responsibility for plans, and it will take time and money and energy.”

With the possible consequences in mind, carriers are cracking down on how marketers reach out to prospective members.

Some insurance companies have hired more individuals to focus on monitoring compliance and sending out warnings to sellers, Fingold said. Many large Medicare Advantage insurers are distributing notices reminding brokers of the new requirements, with some experts anticipating companies will conduct their own secret shopper surveys.

                                    With the possible consequences in mind,
                                carriers are cracking down on how marketers
                                         reach out to prospective members.
 

Alignment Health said it routinely files its advertisements with CMS to ensure the company is meeting compliance requirements. Humana and Indianapolis-based Elevance Health are requiring brokers to disclose any subcontracted relationships used for marketing, lead generation and enrollment, as well as to compile monthly reports on staff disciplinary actions and violations associated with beneficiary interaction, according to September memos the insurers sent to brokers, provided to Modern Healthcare by Health Agents for America.

Humana, Elevance and Hartford, Connecticut-headquartered Aetna have also launched programs to help agents and brokers record and store their audio sales calls.

Elevance is requiring brokers and agents to record any virtual interaction with possible members. “If the prospect or member does not want to be recorded, you should stop the recording and you MUST END the call,” the insurer wrote in its memo.

More federal agency oversight is on the way.

On Oct. 19, four days after open enrollment began, CMS announced that insurance companies must receive explicit federal agency approval for every TV commercial advertising Medicare Advantage plans, beginning next year. CMS' pledge to review regulations with an eye for equity, coupled with the growing trend of health insurance companies structuring plans and marketing toward specific populations, will mean that its process for reviewing advertising materials will need to be refined even further, Beckmann said. She expects CMS to crack down on Spanish-language marketing materials, for example, with insurers possibly needing to change their practices in turn.

“As these plans are customizing to different populations and sold to different populations, CMS will need to be more sophisticated at finding those nuances and looking at the ways plans connect with certain subpopulations,” she said.

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