We are now roughly half-way through the Medicare Annual Enrollment Period (AEP) which ends on December 7 – the time during which people can compare, change and/or get out of Medicare Advantage (MA) and Part D plans for the following calendar year. As discussed in a recent CMA Special Report, broadly speaking, this annual exercise of comparison is flawed in many ways, including that it relies on savvy consumers to make complicated choices in order to optimize their coverage – which most people do not do. A New York Times article by Paula Span titled “Why Aren’t More People Comparison Shopping for Health Plans?” examines some of the challenges of comparing and selecting plans.
This is also a period of time during which many interested parties, including insurance plan sponsors and agents and brokers, are vying for peoples’ attention in order to convince them to enroll in a product(s) they are selling. Misconduct and misinformation during such sales attempts, either intentional or not, is common. Below, we offer warnings about general agent/broker conduct, misleading TV advertisements, educational events that turn into marketing events, and potential recourse for those who are negatively impacted by these things. Note that reporter Susan Jaffe recently wrote about several of these issues in a story published in the Washington Post on November 9, 2021.
Beware of General Agent/Broker Misconduct
The Medicare program has a set of rules that include outlining conduct that is permissible and impermissible by agents and brokers marketing and selling Medicare products. While we do not intend to lump all agents and brokers together, we regularly hear of violations of these rules, including the prohibition against unsolicited contacts.
CMS has recently updated their flyer entitled “Agent/Broker Dos & Don’ts (updated Sept. 2021), available at: https://www.cms.gov/files/document/agentbroker-dos-donts-92021.pdf and reprinted below. Note that CMS has translated this document in 17 languages: Armenian, Arabic, Chinese, Farsi, German, Haitian-Creole, Italian, Japanese, Korean, Polish, Portuguese, Russian, Vietnamese, French, Greek, Spanish and Tagalog.
We urge people who encounter such misconduct to report it to 1-800-MEDICARE (and request a “complaint” be entered into the Complaint Tracking Module) or contact their State Health Insurance Assistance Program (SHIP). Individuals may also contact their state department of insurance or other entity that licenses agents and brokers to report misconduct or file a complaint.
Beware of Educational Events that Turn into Marketing Events
Medicare rules concerning marketing (called Medicare Marketing and Communications Guidelines) make a distinction between “marketing” events, which are designed to steer or attempt to steer potential enrollees, or the retention of current enrollees, toward a plan or limited set of plans; and “educational” events, which are designed to inform beneficiaries about MA, Part D or other Medicare programs.
The last row of the above-referenced chart of agent/broker dos and don’ts notes that agents and brokers “[c]annot conduct marketing or sales activities at an educational event including distributing marketing materials or enrollment forms.”
Unfortunately, CMS made significant changes to the marketing guidelines, codified into regulations in January 2021, which weaken consumer protections. These include diminishing the distinction between marketing and educational events. For example, there used to be a requirement that such events needed to be separated by time and location – an agent, broker or other plan representative couldn’t roll right from an education into marketing event. This distinction is now virtually gone; now agents or brokers can set up marketing appointments directly following educational events.
Under the revised rules, agents and brokers have minimal requirements: “If a marketing event directly follows an educational event, the beneficiary must be made aware of the change and given the opportunity to leave prior to the marketing event beginning” (see 42 CFR §422.2264(c)(2)(i)). As we discuss in a previous CMA Alert, this still-vague requirement remains susceptible to manipulation by agents, brokers and other plan representatives. As the Center noted in comments to CMS protesting this change,
“Presumably individuals show up for educational events because they are advertised as such; if they were interested in engaging in a possible sale they have opportunities to do so, whether it is through an advertised marketing session, through an individual agent/broker, or directly through a plan. If agents/brokers can immediately make a sale after an educational event, it turns such events that were designed to be without pressure into a hunting opportunity for agents/brokers or plan representatives.”
One need not employ much imagination to see how such transitions will be described by marketers as merely “shifting gears”, “getting into more detail”, etc., and how attendees will be reminded that they are “free to leave” at any time. We are concerned that this merging of educational and marketing events will lead to people who merely sought information being pressured into enrolling into plans they didn’t seek.
Beware of Misleading TV Ads
There are some people who will not encounter agents and brokers during the selling season, and who will not attend an educational or marketing event but are nonetheless susceptible to being misled. As discussed in the above-referenced CMA Special Alert, a recent report by the Kaiser Family Foundation found that 7 in 10 Medicare beneficiaries didn’t compare MA and Part D plans, and do not widely use Medicare’s own materials. So where do people end up getting much of their information about Medicare?
One need only turn on their TV for a brief period of time before seeing a barrage of advertising for MA and Part D and even Medigap plans, particularly during this time of year. There is a plethora of ads featuring retired athletes and actors pitching general promises of better benefits, but more specifically promoting 1-800 numbers that connect with brokerage firms that sell Medicare Advantage plans. In a January 2020 CMA Alert, we highlighted the experience of Mr. G., a Medicare beneficiary in his 80s with advanced Parkinson’s disease who always had original Medicare along with a stand-alone Part D plan and a Medigap plan. While he was in a nursing home recovering from a fall, Mr. G. saw a TV commercial for an MA plan promising “zero payment.” He called the plan and spoke to a representative who falsely assured him that he would save money by enrolling. Mr. G. enrolled but did understand that the plan was an HMO with a restricted network, and that many of his providers were not in the network. The day Mr. G. was being discharged from the nursing facility, his family found out about his switch to the MA plan; they also discovered that the home health agency they had worked so hard to find to help with his transition back to living at home was not in his MA network. His family also determined that other important providers, such as his primary-care physician, were not in the plan’s network.
As noted by Mr. G.’s experience, these ads have enticed people into making coverage changes that have disrupted their current care and coverage, and not necessarily in their own best interests. In short, we urge people not to rely on such advertising that paints plans being sold in a light most favorable, and do not cover the full gamut of considerations one should make when making choices about their coverage options.
There is some indication that CMS may be trying to crack down on these types of ads. Last month, CMS released a memorandum to plans stating that it “is particularly concerned with national advertisements promoting MA plan benefits and cost savings, which are only available in limited service areas or for limited groups of enrollees, as well as using words and imagery that may confuse beneficiaries or cause them to believe the advertisement is coming directly from the government. In addition, CMS receives complaints from beneficiaries and caregivers that highlight sales tactics designed to rush or push beneficiaries into enrolling into a plan.” We hope that this action means we all will see less of such ads.
Potential Recourse – Special Enrollment Period (SEP)
Medicare provides certain rights to use Special Enrollment Periods (SEPs) to change or get out of a Medicare Advantage or Part D plan in certain circumstances. This includes when someone receives inaccurate or misleading information from the Medicare Plan Finder, customer service representatives at 1-800-MEDICARE, or an MA or Part D plan (or its agents). See, e.g., a “Note” on the www.medicare.gov webpage describing SEPs: “If you believe you made the wrong plan choice because of inaccurate or misleading information, including using Plan Finder, call 1-800-MEDICARE and explain your situation. Call center representatives can help you throughout the year with options for making changes.”
For a full list of available SEPs, see, e.g., for MA SEPs: Medicare Managed Care Manual, Chapter 2 (2021 update available here) and Title 42, Code of Federal Regulations §422.62(b); for Part D SEPs see Medicare Prescription Drug Manual, Chapter 3 (2021 update available here) and Title 42, Code of Federal Regulations §423.38.
November 11, 2021 – D. Lipschutz