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PA warns against marketing misrepresentation of Medicare coverage plans

Harrisburg, PA – With private insurers increasingly promoting their Medicare coverage plans through marketing campaigns that feature celebrities or offer gifts, the Pennsylvania Department of Aging has sent a letter to the Centers for Medicare & Medicaid Services (CMS), supporting CMS’ efforts to address the issue of marketing misrepresentation, and offering suggestions to protect consumers from advertising messages that may be confusing or misleading.

In the letter, Secretary Robert Torres outlined the consequences that older adults could face if they switch from a Medigap plan to a Medicare Advantage plan due to these marketing campaigns, including loss of coverage and access to their doctors, new co-pays, and the inability to return to the Medigap plan. The letter cited an example in which an older adult left their Medigap plan for a Medicare Advantage plan for the incentive of a free fruit basket that they did not qualify to receive.

Secretary Torres further urges CMS to act on the following proposed measures:

  • Require clearer disclaimers with standard language developed by CMS that indicate the products offered do not represent the full selection of choices available to consumers.
  • Make the beneficiary aware of the disclaimer, the availability of other suitable options, and the ramifications of switching plans.
  • Prohibit the use of the word “Medicare” in the phone number, company, or website name, and the use of Medicare-like graphics in marketing materials.
  • Require a statement that the advertised plans may not be the best choice for everyone and may not be available in every area.
  • Include the 1-800-MEDICARE toll-free helpline and numbers for State Health Insurance and Assistance Programs (SHIPs).

Learn about the programs and services offered by the Department of Aging by visiting the department’s website and Facebook page.

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Content of the letter to CMS below. 

March 4, 2022

Chiquita Brooks-LaSure, Administrator
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850

Submitted electronically via http://www.regulations.govOpens In A New Window

RE: Advance Notice of Methodological Changes for Calendar Year (CY) 2023 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies

Dear Administrator Brooks-LaSure:

The Pennsylvania Department of Aging (Department) appreciates the opportunity to submit comments on the Advance Notice of Methodological Changes for Calendar Year (CY) 2023 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. We applaud the Biden Administration’s efforts to continually evaluate and review these policies to better protect older adults from confusion and misrepresentation.

Pennsylvania is home to more than 3.4 million older adults, where 1 in 4 Pennsylvanians are over age 60. In less than a decade, about 4 million, or 1 in 3 Pennsylvanians, will be over 60 which highlights the anticipated growth of more individuals becoming eligible for Medicare benefits. Currently 2,762,509 older Pennsylvanians are Medicare beneficiaries, and they will greatly benefit from the protections put in place by these additional measures.

The Department’s State Health Insurance and Assistance Program (SHIP) has seen firsthand how manipulative marketing tactics can confuse older adults and result in the enrollment into  a plan that may not be in the best interest of the individual. Too often SHIP receives complaints from older adults who have fallen prey to manipulative marketing schemes, enroll in those plans, and then after learning the negative consequences of switching plans, wish to go back to their original plan.  SHIP works with consumers to resolve these issues, but options are limited depending on the circumstances.

SHIP counsels and assists beneficiaries who have gotten confused by advertisements on television and other sources. TV ads and mailings can be confusing and misleading to beneficiaries, touting services and benefits that are only available in certain areas to select individuals who qualify. Older adults do not realize that these advertisers have a financial incentive to enroll them into their plans and that these plans may not necessarily be the best option for them.

When consumers leave a Medigap plan for a Medicare Advantage Plan they face real challenges concerning their finances and access to healthcare. They often lose coverage, access to their doctors, face new co-pays and are unable to return to the Medigap Plan. SHIP worked with an individual who left a robust Medigap plan to join a lesser Medicare Advantage Plan because the plan advertised a free fruit basket.  Changing plans would have had a detrimental impact on the individual’s health and finances, all because of a small incentive that they ultimately did not qualify to receive.

The Department supports CMS’s efforts to address the issue of marketing misrepresentation by including measures in category 1.30 (CMS Lead Marketing Misrepresentation: Allegation of inappropriate marketing by plan, plan representative, or agent/broker) and complaints in category 2.30 (Plan Lead Marketing Misrepresentation: Allegation of inappropriate marketing by plan, plan representative or agent/broker).  We offer some feedback for your consideration:

  • Categories 1.3 and 2.3 do not seem to address complaints related to agents, brokers, and clearinghouses that represent multiple plans and products.  We suggest requiring plans to police the third-party sellers of their products and hold them accountable.
  • Categories 1.3 and 2.3 penalize the plans through the star rating system as a result of complaints after the fact. We suggest to also include additional timely and pro-active measures to prevent marketing misrepresentation.

While we applaud CMS’s efforts to address marketing misrepresentation, the Department would be remiss in our duty to protect older Pennsylvanians if we did not take this opportunity to urge additional actions outside of these measures and we offer these for further consideration:

  • We recommend requiring clearer disclaimers with standard language developed by CMS, that indicates the products offered do not represent the full selection of choices available to consumers.   The disclaimer should be prominently displayed and not hidden in small text that older adults are not able to see or read.  The Medicare beneficiary must also be made clearly aware of the disclaimer and have an understanding that there are other options available for their consideration and perhaps more suitable for their needs.  Older adults need to be told about the serious ramifications of switching plans, so they are fully informed in their decision-making.
  • We also recommend prohibiting use of the word “Medicare” in the phone number, company or website name, and the use of Medicare-like graphics in marketing materials.
  • Finally, we urge you to require a statement that the advertised plans may not be the best choice for everyone and are not available in every area, and require the promotion of the 1-800 MEDICARE tollfree helpline and numbers for SHIPs. The promotion of SHIPs, which offer free impartial counseling, would help individuals make an informed choice that is best for their circumstances.

The Department supports the inclusion of additional measures to protect older adults from misrepresentation and confusion.  We urge CMS to take additional steps by addressing complaints regarding agents, brokers, and clearinghouses which represent multiple plans or products. Additionally, the impact of the misrepresentation complaints to the star rating only creates a punitive effect well after the consumer complaint is received; and we urge you to consider more timely and proactive measures to prevent marketing misrepresentation from occurring. Finally, we urge stronger marketing rules and guidelines, such as prohibiting the use of word “Medicare” by plans, which misleads consumers.

Thank you again for the opportunity to submit comments and feedback supporting protections for older Pennsylvanians.

Sincerely,

Robert Torres, Secretary