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Medicare Advantage Agents Confusing Seniors

Medicare Advantage Agents Confusing Seniors Through Ambiguous Promises

by Don Drake, Connelly Law Offices, Ltd. 6.11.24

Attorney Connelly and Medicare Advantage
Attorney RJ Connelly III

"Medicare Advantage (MA) plans, or Medicare Part C, are health insurance plans provided by private companies approved by Medicare and are by independent insurance brokers," said professional fiduciary and certified elder law Attorney RJ Connelly III. "These plans offer seniors an alternative to traditional Medicare by bundling together coverage for hospital stays (Part A), medical services (Part B), and often prescription drug coverage (Part D). This option allows beneficiaries to receive their Medicare benefits through a single plan provided by a private insurer, offering additional benefits and sometimes cost-saving features compared to traditional Medicare."

Medicare Advantage plans also offer several other benefits compared to regular Medicare. They often feature lower out-of-pocket costs and can provide additional coverage for services such as vision, hearing, and dental care, which are not typically covered by original Medicare. However, it's important to note that Medicare Advantage plans usually require using in-network providers and obtaining a referral to see specialists. In contrast, original Medicare allows more flexibility in choosing healthcare providers.

"Despite the advantages for certain seniors, it's also crucial to recognize that independent health insurers offering Medicare Advantage plans stand to gain significant profits from these plans," stated Attorney Connelly. "Unfortunately, the potential for substantial profits has led some unscrupulous brokers and companies that employ them to resort to unethical and fraudulent tactics to enroll patients in private Medicare plans."

Inaccurate and Ambiguous Information

Given the plethora of newspaper reports, Medicare Advantage agents confusing seniors is becoming more of a problem. Some MA marketers spread inaccurate information through television advertisements and mailings. For example, some providers have asserted that switching to a Medicare Advantage plan will increase the recipient's Social Security benefits without explaining why or how.

Medicare Fraud
Using celebrities and ambiguous promises

This office has had conversations with numerous seniors about their Medicare Advantage plans and the possibility of losing coverage after receiving mail from companies promoting them while providing misleading statements. These communications are deliberately ambiguous, causing seniors to have these concerns.

The marketers appear to keep the information intentionally vague knowing that many seniors may be experiencing some cognitive impairments and become confused by the promises made. Even though it's against the law for telemarketers to make unsolicited calls to individuals with Medicare, some seniors have received multiple phone calls to persuade them to sign up for specific insurance plans while attempting to talk them into dropping their current MA provider.

A Local Case

An older adult, living independently and facing cognitive difficulties, has been subjected to distressing treatment by telemarketers. Between March 29, 2024, and early May 2024, this individual was shifted between Medicare Advantage plans with different companies four times, causing significant disruption and confusion.

Connelly Law Offices Medicare Fraud Rhode Island
Confusing information

She was initially enrolled in the AETNA Explorer Plan but disenrolled from this plan on April 1, 2024. Subsequently, she began her coverage with AARP United Healthcare on the same day. However, her enrollment in United Healthcare ended on April 5, 2024, and she began receiving coverage from Wellcare starting June 1, 2024. She was disenrolled from Wellcare at some point, but the specific date is unknown. Later, she received a letter on May 7, 2024, indicating that she had been re-enrolled in the AETNA plan. The client reported to this office that she made these changes after receiving calls from "Medicare" stating they could give her better plans if she switched to a different provider -- "so I did," she told us.

The client reports that she has been inundated with many unwanted calls daily from individuals who promise her better insurance coverage, refunds, and even complimentary food. These calls are related to her MA insurance and involve the promotion of Prescription Drug Plans, Funeral Plans, and Life Insurance. As recently as June 7th, she contacted us to report that an individual claiming to represent Medicare phoned her and asked for her Medicare numbers to alter her plan. It's crucial to highlight that Medicare does not initiate such requests via phone, a critical piece of information that may not be widely known among senior citizens.

Below is just a handful of the correspondence received by the client showing the "merry-go-round" of Medicare Advantage changes in April and early May. Please remember that brokers who sell these plans are independent and do not work for the companies on the letterhead.

Medicare Fraud Connecticut
Medicare Fraud Rhode Island
Medicare Fraud Martha's Vineyard

Unfortunately, despite our office's efforts to provide support and collaborate with social service agencies on her behalf, she had not been successful in fixing the problem. Changing her phone number was not a viable solution due to her short-term memory issues. However, we received good news yesterday that she has been accepted into a program that should address her current challenges. Nonetheless, we are left wondering about the many other seniors nationwide facing similar issues without a clear solution.

Why This is Happening

"Quite simply, insurance brokers have a strong financial incentive to promote the enrollment of individuals in Medicare Advantage plans," said Attorney Connelly. "They receive higher commissions for selling these plans than Medigap and Part D plans used with traditional Medicare."

When brokers sell Medicare plans, their earnings are typically based on two main methods of commission. They receive a predetermined flat dollar amount for each application submitted for Medicare Advantage and prescription drug plans. On the other hand, for Medicare Supplements, brokers earn a percentage of the premium from the plans they sell.

Medicard Advantage Fraud Massachusetts
Agents make commissions selling MA plans

Brokers who sell Medicare Advantage (MA) and Prescription Drug Plans (PDP) receive a fixed amount for each submitted application. This compensation is given in the form of initial commissions and renewal commissions. Insurance carriers pay initial commissions when a broker successfully makes a new sale or when a beneficiary enrolls in a new plan that differs from their previous one. Renewal commissions are paid annually to the broker if the beneficiary remains enrolled or enrolls in a similar plan.

The maximum initial commission for Medicare Advantage (MA) plans in 2024 varies by location. In most states, it is set at $611 per enrollee. However, there are exceptions. In Connecticut, Pennsylvania, and Washington, D.C., it is $689 per enrollee. For California and New Jersey, it is $762; in Puerto Rico and the US Virgin Islands, it's $418.

This commission is typically paid to licensed agents when a beneficiary enrolls in a Medicare Advantage plan for the first time or switches to a new plan during the Annual Enrollment Period (AEP) or other qualifying periods. Additionally, agents receive a renewal fee of 50% of the original commission.

Attorney Connelly raised an important question, "Did the agents who transferred our client to multiple plans receive a commission each time they did so? If this was the case, it raises concerns about the checks and balances within the Medicare system."

Interestingly, Medicare has recognized significant financial losses attributed to fraudulent marketing practices, primarily related to commission disbursements to unscrupulous insurance agents. The substantial profits obtained by Medicare Advantage plans have resulted in annual overpayments of up to $140 billion to private entities, elucidating the underlying motivation behind aggressive and often unethical marketing strategies and the waste of resources that could be used for additional healthcare services.

A Final Word

"It can feel incredibly daunting to compare the various Medicare plans available and decide which is the best match for many individuals, so many seek assistance from external companies," stated Attorney Connelly. "Unfortunately, this reliance on outside help can leave people vulnerable to Medicare fraud, making it challenging for prospective clients to discern which entities truly have their best interests at heart. For instance, in the specific case we presented, our client changed Medicare Advantage plans four times within thirty days, which, one would think, should raise red flags within the Medicare system. Although the State Health Insurance Assistance Program (SHIP) provides trustworthy support, some older adults may still become targets for telemarketers who make enticing promises through television advertisements or mass mailings. Until the companies enabling this fraudulent activity face significant repercussions, this problem will persist, leaving seniors susceptible to exploitation."

Meidcare Fraud

Please note that the information provided in this blog is not intended to and should not be construed as legal, financial, or medical advice. The content, materials, and information presented in this blog are solely for general informational purposes and may not be the most up-to-date information available regarding legal, financial, or medical matters. This blog may also contain links to other third-party websites that are included for the convenience of the reader or user. Please note that Connelly Law Offices, Ltd. does not necessarily recommend or endorse the contents of such third-party sites. If you have any particular legal matters, financial concerns, or medical issues, we strongly advise you to consult your attorney, professional fiduciary advisor, or medical provider.

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