[Senate Hearing 118-715]
[From the U.S. Government Publishing Office]
S. Hrg. 118-715
MEDICARE ADVANTAGE ANNUAL ENROLLMENT:
CRACKING DOWN ON DECEPTIVE PRACTICES
AND IMPROVING SENIOR EXPERIENCES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 18, 2023
__________
Printed for the use of the Committee on Finance
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-699-PDF WASHINGTON : 2025
-----------------------------------------------------------------------------------
COMMITTEE ON FINANCE
RON WYDEN, Oregon, Chairman
DEBBIE STABENOW, Michigan MIKE CRAPO, Idaho
MARIA CANTWELL, Washington CHUCK GRASSLEY, Iowa
ROBERT MENENDEZ, New Jersey JOHN CORNYN, Texas
THOMAS R. CARPER, Delaware JOHN THUNE, South Dakota
BENJAMIN L. CARDIN, Maryland TIM SCOTT, South Carolina
SHERROD BROWN, Ohio BILL CASSIDY, Louisiana
MICHAEL F. BENNET, Colorado JAMES LANKFORD, Oklahoma
ROBERT P. CASEY, Jr., Pennsylvania STEVE DAINES, Montana
MARK R. WARNER, Virginia TODD YOUNG, Indiana
SHELDON WHITEHOUSE, Rhode Island JOHN BARRASSO, Wyoming
MAGGIE HASSAN, New Hampshire RON JOHNSON, Wisconsin
CATHERINE CORTEZ MASTO, Nevada THOM TILLIS, North Carolina
ELIZABETH WARREN, Massachusetts MARSHA BLACKBURN, Tennessee
Joshua Sheinkman, Staff Director
Gregg Richard, Republican Staff Director
(II)
C O N T E N T S
----------
OPENING STATEMENTS
Page
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee
on Finance..................................................... 1
Crapo, Hon. Mike, a U.S. Senator from Idaho...................... 3
Brown, Hon. Sherrod, a U.S. Senator from Ohio.................... 4
WITNESSES
Reeg, Christina, Ohio Senior Health Insurance Information Program
Director, Ohio Department of Insurance, Columbus, OH........... 5
Blumenfeld-Gantz, Cobi, CEO and co-founder, Chapter, New York, NY 7
Hoglund, Krista, A.S.A., MAAA, chief executive officer, Security
Health Plan, Marshfield, WI.................................... 9
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Blumenfeld-Gantz, Cobi:
Testimony.................................................... 7
Prepared statement........................................... 33
Responses to questions from committee members................ 36
Brown, Hon. Sherrod:
Opening statement............................................ 4
Crapo, Hon. Mike:
Opening statement............................................ 3
Prepared statement........................................... 41
Hoglund, Krista, A.S.A., MAAA:
Testimony.................................................... 9
Prepared statement........................................... 41
Responses to questions from committee members................ 45
Reeg, Christina:
Testimony.................................................... 5
Prepared statement........................................... 49
Responses to questions from committee members................ 50
Wyden, Hon. Ron:
Opening statement............................................ 1
Prepared statement........................................... 53
Communications
AARP............................................................. 55
American College of Physicians................................... 56
Association for Clinical Oncology................................ 60
Association of Web-Based Health Insurance Brokers................ 62
Avant, Laura..................................................... 65
Better Medicare Alliance......................................... 66
Blue Cross Blue Shield Association............................... 68
Celestino, Lucille............................................... 69
Center for Economic and Policy Research.......................... 70
Center for Medicare Advocacy..................................... 78
Commonwealth Care Alliance....................................... 82
The Commonwealth Fund............................................ 83
Dekker, Lisa..................................................... 87
eHealth, Inc..................................................... 88
Federation of American Hospitals................................. 93
Gallegos, Patricia............................................... 94
Gebhart, Virginia................................................ 95
Grad, Brian...................................................... 96
Harvey, Patty.................................................... 96
Insurance Marketing Coalition.................................... 97
Knutson, Carola Gay.............................................. 101
Lawson, Gregory J................................................ 102
Medicare Rights Center........................................... 103
National Association of Benefits and Insurance Professionals..... 105
People's Action.................................................. 109
Physicians for a National Health Program......................... 111
Reichart, Ellen A., Esq.......................................... 112
Sharp, Sterling.................................................. 113
Sutton, Paul W................................................... 114
Voices for Health and Healing.................................... 114
MEDICARE ADVANTAGE ANNUAL
ENROLLMENT: CRACKING DOWN ON
DECEPTIVE PRACTICES AND
IMPROVING SENIOR EXPERIENCES
----------
WEDNESDAY, OCTOBER 18, 2023
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 10:05
a.m., in room SH-216, Hart Senate Office Building, Hon. Ron
Wyden (chairman of the committee) presiding.
Present: Senators Stabenow, Menendez, Brown, Bennet, Casey,
Hassan, Cortez Masto, Warren, Crapo, Grassley, Lankford, and
Blackburn.
Also present: Democratic staff: Nicole Brussel Faria,
Investigator; Melissa Dickerson, Senior Investigator; Eva
DuGoff, Senior Health Advisor; and Joshua Sheinkman, Staff
Director. Republican staff: Kellie McConnell, Health Policy
Director; Gregg Richard, Staff Director; and Charlotte Rock,
Health Policy Advisor.
OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM
OREGON, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. The Finance Committee will come to order.
This morning, the Finance Committee gathers to discuss an
emerging trend in Medicare Advantage: marketing middlemen. Now,
there's a long history of rip-off artists in the private sector
trying to take advantage of seniors who depend on their
flagship health program, Medicare.
Since I served as the director of the Oregon Gray Panthers,
something like a year or 2 ago, these unethical salespeople
would often sell seniors 10 or 15 separate, unnecessary Medicap
policies that were not worth the paper they were written on.
Senator Daschle, Senator Heinz, Senator Dole, and I came in,
and we pretty much drained that swamp.
The same thing happened at the start of Medicare Advantage.
In fact, I think my colleagues were there. Then-chairman Baucus
held a hearing on Medicare marketing, because scammers were
actually going door to door in the south wearing white coats
and stethoscopes around their necks to try to persuade seniors
to enroll in these plans.
We got a few protections, but it was not enough. Last fall,
I released a report that detailed some of the most outrageous
marketing practices I had seen in Medicare Advantage, like vans
parked outside senior centers with ``MEDICARE'' splashed across
the side and mailers designed to look like IRS documents. Many
members of the committee joined Senator Casey and I in calling
on the Centers for Medicare and Medicaid Services to make
changes to protect beneficiaries from these slimy tactics.
CMS moved and moved quickly. Just yesterday, they reported
that they rejected more than 300 ads because they were just so
frigging outrageous and misleading. At the time, we also said
we were not going to take any victory laps. As seniors
experienced Medicare's annual open enrollment that started 72
hours ago, our investigators found that marketing middlemen are
the latest set of sleazy private-sector scoundrels targeting
seniors on Medicare Advantage.
Now we've got bad actors again gearing up, this time for
the new enrollment period. So let's talk about who these people
actually are and why they are such a big deal in Medicare
Advantage. They are big private marketing companies, and they
get in the middle between seniors and their health-care
coverage.
These big marketing companies jump to get in front of
seniors, and they especially want to do it during the annual
open enrollment period. What these middlemen are doing is
hijacking personal information from as many seniors as
possible, and then they funnel the personal information to the
health plans that pay these sleazy marketers the most money.
Basically, we are going to describe this as a profit for these
companies first, help for seniors and taxpayers last.
Now, some seniors' information gets passed multiple times
from one money-grubbing hand to another. The marketers will
sell seniors' data once. If they can, they will sell it twice.
If they can, they will sell it as many times as possible. The
wheel of deceit, friends, just keeps going round and round,
ripping off seniors, ripping off taxpayers.
The seniors are the ones getting badgered by phone,
targeted on the Internet, stuck with mountains of mail, and
ultimately a plan that may not meet their needs. To sum it up,
the marketing middlemen have made seniors their product, and
they are trying to sell as much of the product as they can.
Now, it is also taxpayer dollars that are in effect
lubricating all this, and these dollars line the middlemen's
pockets. Insurance experts have told us that marketing cost
taxpayers $6 billion in 2022 alone. Put your arms around that:
6 billion taxpayer dollars went to marketing middlemen who may
have sold your elderly parents, your grandparents, or your
neighbors the wrong plan.
It is outrageous, it is a rip-off, and it has got to stop.
And that is why we have had our investigators launching a
further inquiry, because we believe there is additional
information with respect to these slimy practices.
One other quick issue, and then I want to yield to my
friend, Senator Crapo. We are also in a related effort to stop
what are called ghost networks. Now, a year and a half ago,
nobody knew what a ghost network was. But a ghost network is
what it sounds like. Somebody buys a mental health insurance
policy, and they expect they are going to get some services.
But after they buy it, after the contract is signed and they
actually need it, the ghost network basically has no ``there''
there. You cannot find a doctor; you cannot get information
about what hours of services they might keep. There is just
nothing to follow up on, and certainly nothing resembling the
health-care services you thought you bought.
So, our investigators looked at a cross-section of mental
health plans across the country. They contacted the providers;
they asked if they could get an appointment for a family
member. They were able to get an appointment 18 percent of the
time. So, more than 80 percent of the time, their plan actually
failed them.
Even if a senior could make an appointment with a
provider--and get this--they may be exposed to extra cost if
they have to go to a provider out of network. In other words,
they paid for something, but there was not any service. They
need some health services, they go out of network, and the
person they gave the money to originally sticks them with a
second bill.
So, we have a lot of work to do, and I just want to
particularly commend my colleagues Senator Bennet and Senator
Tillis. Like Senator Crapo and I and the Finance Committee, we
try to be bipartisan. They have introduced a good bill I am
pleased to be a cosponsor of, to try to make sure that seniors
will get more accurate data about these services.
I will tell some of those ghosts that I find run around on
Halloween that they are not going to be able to rip off seniors
the way they have been doing.
Last point will be this. Over the years, I have come to
believe that one of the pieces of the health-care puzzle that
is not getting enough attention is the role of middlemen.
Today, we are looking at marketing middlemen.
I am very appreciative that Senator Crapo has joined me in
another effort, with Senator Stabenow's support and our
colleagues here, and that is going after the PBMs, because
there again, you have middlemen, in effect, insurance companies
taking big fees and high salaries, rather than getting that
money to patients.
Now, as Senator Crapo and I have described, these middlemen
are not cut from a cookie cutter. They are not all the same.
But I think it is important to be looking at this in the
future. I intend to do it. We spend $4 trillion a year on
health-care costs, folks, and we can get more value for those
$4 trillion, and one of the areas I am going to be looking at
are these middlemen.
I am very appreciative of Senator Crapo joining me, not
just in today's project, but also on the PBMs.
Senator Crapo?
[The prepared statement of Chairman Wyden appears in the
appendix.]
OPENING STATEMENT OF HON. MIKE CRAPO,
A U.S. SENATOR FROM IDAHO
Senator Crapo. Thank you, Mr. Chairman. This hearing comes
at a crucial time, as millions of Americans evaluate Medicare
coverage options during the annual open enrollment period.
During this window, seniors and many Americans with
disabilities have the opportunity to select a Medicare
Advantage, or MA, plan that best fits their needs.
I have long championed Medicare Advantage for its success
in leveraging market-driven competition to offer patients
access to a wide range of cost-effective coverage choices. The
vast majority of our MA plans cover services not available
under traditional Medicare, including for dental, vision, and
hearing health needs.
With consistently high satisfaction rates and low premiums,
MA's market dynamism serves as its strength, not as its
weakness. That said, the complexity of the health-care system
poses significant challenges for Americans from all walks of
life, including those enrolled in MA plans.
Seniors need clear, credible, and accurate information to
navigate the coverage and service landscape. Fortunately, a
variety of resources and tools can help guide Medicare
beneficiaries through the decision-making process this opaque
system requires.
However, the Federal Government's Medicare Plan Finder, the
decision support tool outlining coverage choices, can prove
cumbersome and confusing, often displaying out-of-date or
otherwise inaccurate data. As we consider options to ease
enrollment, we should assess solutions that improve Plan Finder
by integrating more relevant information and enabling more
user-friendly navigation.
Furthermore, we should examine opportunities to empower
effective insurance brokers who serve as key community-based
resources and access points, including in the context of MA
plan enrollment. Through common-sense patient protections and
targeted transparency, we can promote a vibrant and competitive
broker landscape, assisting seniors while preventing deceptive
marketing and other problematic practices.
Practical guard rails, however, cannot come at the expense
of patient privacy or a functional marketplace. With all
policies under review, we have an obligation to consider both
confidentiality
concerns and administrative burden. I look forward to hearing
thoughtful ideas about how to improve the enrollment process by
better aligning the incentives and increasing transparency.
With common-sense, consensus-driven, and market-based
solutions, we can ensure broad access for seniors to all of the
tools needed to make crucial, informed coverage decisions.
Thank you very much, Mr. Chairman.
[The prepared statement of Senator Crapo appears in the
appendix.]
The Chairman. I thank my colleague.
We've got terrific witnesses here. Senator Brown is in
attendance, and he and I go way back in terms of fighting for
senior rights, and I so appreciate his leadership. He is going
to introduce our guest from Ohio.
OPENING STATEMENT OF HON. SHERROD BROWN,
A U.S. SENATOR FROM OHIO
Senator Brown. Thank you. Thank you, Mr. Chairman. It is
very good to see you.
It is my pleasure to introduce Ms. Christina Reeg, who is
currently the Program Director for the renowned Ohio Senior
Health Insurance Information Program, so-called OSHIIP. OSHIIP
provides education and counseling to assist older Ohioans in
choosing the best and most affordable health and prescription
drug coverage plans for themselves and for their loved ones.
Ms. Reeg began her career at the Ohio Department of
Insurance as an OSHIIP training officer, went on to work as a
training supervisor and assistant director, prior to becoming
Program Director about 2 years ago. She oversees the program's
grant funding, operations management, outreach and education
efforts, and consumer service and counseling.
Under her leadership, OSHIIP has received national
recognition for the high-quality services it provides to Ohio's
nearly 2.5 million Medicare beneficiaries. We are a State of 12
million. The importance of those 2.5 million people and the
services you provide are really important.
She was selected to serve on the national SHIP steering
committee from 2012 to 2018. She has served as chair for the
last 4 years of that period.
Ms. Reeg, thank you for your commitment to making
enrollment easier for Ohio Medicare beneficiaries. Thanks for
helping them get better coverage and save money. Thank you for
joining this committee today. I look forward to hearing your
testimony. Thanks so much.
The Chairman. I thank my colleague.
And, Ms. Reeg, my mother always used to say after
basketball games, ``Dear, just make sure tonight you are
running with the right crowd.'' You Ohioans are in the right
crowd, and we are glad you are here. Thank you, Senator Brown.
Our next guest will be Cobi Blumenfeld-Gantz. Mr.
Blumenfeld-Gantz is the CEO and cofounder of Chapter, a
technology-enabled Medicare and retirement platform.
Previously, he worked at Palantir Technologies, and got
undergraduate degrees from the Wharton School and the
University of Pennsylvania. He holds a master's in public
policy from the University of Cambridge. We very much welcome
you, sir, and look forward to your comments.
And then, our final witness will be Krista Hoglund, chief
executive officer of Security Health Plan. She has been there
since 2021. Security Health is part of the Marshfield Clinic
Health System in Marshfield, WI. And she serves on the
executive committee and the board of directors of the Alliance
of Community Health Plans, and she is also an actuary.
So, we thank all of our witnesses. This is an important
hearing. We are going to have everybody take 5 minutes for oral
testimony.
We have plenty of questions, and, Ms. Reeg, let us start
with you.
STATEMENT OF CHRISTINA REEG, OHIO SENIOR HEALTH INSURANCE
INFORMATION PROGRAM DIRECTOR, OHIO DEPARTMENT OF INSURANCE,
COLUMBUS, OH
Ms. Reeg. Good morning, Chairman Wyden, Ranking Member
Crapo, and members of the committee. Thank you for the
opportunity to appear before you today. My name is Christina
Reeg, and it is an honor to be here. I am the Program Director
for the Ohio Senior Health Insurance Information Program, or
OSHIIP, at the Ohio Department of Insurance.
We are one of 54 SHIP programs that are funded through a
Federal grant to provide objective and unbiased information to
individuals on Medicare, their family members, and their
caregivers. SHIPs provide local and unbiased information to
empower the consumer to make an educated and individualized
decision regarding their prescription drug and health insurance
coverage.
Twenty twenty-three marks my 26th year with OSHIIP, so I
began as the boots on the ground, traveling Ohio's 88 counties,
29 Appalachian, providing one-on-one counseling about Medicare
Part A, Medicare Part B, and at the time, maybe Medigap. This
month, our program began counseling Ohio's now 2.5 million
Medicare beneficiaries to help them make educated decisions for
2024 coverage.
We now operate in a hybrid model, providing information and
education, both through virtual and in-person events that we
advertise through social media, paid and earned media, and
grass-roots efforts. The information that we present now vastly
differs from my early years with OSHIIP. Many of the counties
that we counsel in, there are more than a hundred health plan
options for us to review.
Most Medicare beneficiaries will not review or change plans
because the task of comparing is too daunting. To help narrow
the field, we do use Medicare's Plan Finder tool. This web-
based tool allows us to determine if their current prescription
medications are covered, outlining all out-of-pocket costs and
plan details. But it does not include the plan network. It
rather links to the plan's website.
The company websites can be difficult for Medicare
beneficiaries to navigate alone. We use that as a launching
point. We then ask the consumers to reach out directly to their
providers that they are not willing to give up, and ask very
pointed questions, right down to the contract number, to make
sure they can continue to use those services.
Counseling Ohio's low-income and limited-health-literacy
Medicare population brings added challenges. These individuals
are more apt to join a plan solely for the added benefits,
specifically the over-the-counter allowances and other cash
rewards. Many are applying for the extra help on Medicare's
assistance with prescription drug costs for the first time.
Even when the application is automatic, there are delays, which
can lead to affordability issues at the pharmacy window.
SHIPs assist by getting them into temporary programs like
LI Net to help curb those costs. Also, special enrollment
periods for low-income individuals are often misused, putting
consumers into managed care plans more frequently than the
quarterly allowance. OSHIIP's assistance is often reactive in
those situations, when the beneficiary has found themselves
having difficulty receiving needed medical care or
prescriptions.
In my time with OSHIIP, I have seen extreme growth: growth
with the Medicare population, growth within the scope of SHIP
work, and extreme growth with the plan options. Our Medicare
consumers are overwhelmed by the volume of options in each
county and are flooded with marketing material--and often
confused by the variants of plan details, networks, and these
added benefits.
The desire to have benefits you are entitled to or added
benefits often masks the need to look at critical plan data,
such as the specific cost, the networks, and other restrictions
they may encounter. This often leads to poor enrollment
decisions and undesirable outcomes.
Medicare beneficiaries would benefit from additional
oversight. A personalized Annual Notice of Change would assist
beneficiaries in better understanding changes, such as higher
costs from year to year. Stronger oversight on utilization of
special election periods, such as the low-income or emergency
special election periods, and a block on enrollments for those
with cognitive impairments, could minimize improper sales to
most vulnerable beneficiaries.
Reinstatement of measurable differences when approving plan
contracts would help contain the volume of plans in each
county. These actions could help make the process of choosing
and enrolling into a Medicare health plan less intimidating.
I am happy to answer any questions, and remain dedicated to
this population. Thank you.
[The prepared statement of Ms. Reeg appears in the
appendix.]
The Chairman. Thank you very much, and I go way back with
your organization in the Oregon chapter. So, great to see you.
Mr. Blumenfeld-Gantz?
STATEMENT OF COBI BLUMENFELD-GANTZ, CEO AND
CO-FOUNDER, CHAPTER, NEW YORK, NY
Mr. Blumenfeld-Gantz. Chairman Wyden, Ranking Member Crapo,
and members of the committee, thank you for inviting me to
testify, and for dedicating time to this important topic. My
name is Cobi Blumenfeld-Gantz, and I am the CEO and cofounder
of Chapter, a technology-enabled Medicare navigation platform.
I started Chapter because the Medicare enrollment and
navigation process is broken, and consumers deserve better.
Fighting deception and improving the Medicare experience is
personal to me. My parents were the first two people that
Chapter helped, and they are the reason I started this company.
They needed help fixing mistakes they made following the
advice of a broker, who had no obligation to prioritize my
parents' interests over his own. My parents' experience of
confusion and costly mistakes is the norm, not the exception.
Choosing the wrong Medicare plan can add thousands of dollars
of extra costs for consumers, and it can even make lifesaving
medications unaffordable.
Before I highlight more of the challenges facing Americans
on Medicare, I want to share Chapter's unique approach to
guidance, which has afforded us insight into what consumers are
up against. Chapter is a consumer-first Medicare navigation
platform. The breadth of Medicare choices is overwhelming to
most, but with good data and tools, choice is empowering. We
have invested millions into building a Medicare data and
technology stack from the ground up, to recommend the right
plan tailored to each person's needs.
Our exceptional engineers and Medicare advisors are
dedicated to demystifying Medicare for every American. But it
should not require world-class data scientists to help an
American choose their Medicare insurance. We have upended
status quo incentive structures in the brokerage model. We
consider the full scope of Medicare options from every carrier,
and then we recommend the right one, even when we earn no
money.
We operate this way because no consumer should enroll in a
suboptimal Medicare plan simply because their broker earns a
commission. Consumers are more likely to wind up on the right
Medicare plan when their advisor's incentives are aligned with
their own.
Every American who enrolls in Medicare deserves to do it
with clarity and confidence. I wanted this for my parents, I
want it for every person who works with Chapter, and I want it
for myself someday. Here is how we get there: better data,
ending deceptive marketing, and prioritizing consumers'
interests.
Consumers deserve significant improvements in the quality
and availability of data, specifically on provider networks,
benefits, and prescription prices. Without these, consumers,
along with the organizations trusted to guide them, will
continue to struggle to make informed choices. CMS sponsors
some of the tools with the greatest potential to help, like
Medicare.gov's Plan Finder and their published data files.
These valuable resources are widely used by the industry
and by State health programs. But if Americans need support
making a fully informed decision, these tools are not enough.
For example, Plan Finder cannot help a consumer understand
which plans let them keep their doctors, and there are limits
to the information on how much a prescription will cost on each
plan.
Consider a consumer who sees three doctors. They might need
to compare over 100 separate searches across each insurance
company's website. It is not reasonable to expect a typical
consumer to conduct this search. Insurance carriers owe it to
consumers and to the industry that supports them to provide
open, accurate provider network and other benefit data via
APIs.
How can we expect consumers to make informed Medicare-
related decisions when they lack the data and tooling to do so?
Chapter has worked hard to solve this problem for consumers,
but it has been an uphill battle. Accessible, transparent data
is the first line of defense for any consumer making Medicare
decisions among a barrage of misinformation. Last year, this
committee published a report on deceptive marketing, and I
commend the committee's ongoing focus on this topic.
Every fall, Medicare-eligible consumers are bombarded with
mailers, TV ads, and phone calls rife with misleading and
pernicious content. The bad actors are typically not local
brokers who live in each community; rather, they are lead
generators operating as marketing middlemen who traffic in
scare tactics, imitate government agencies, and inaccurately
advertise plan benefits.
CMS has proposed regulations to prohibit the transfer of
consumers' personal information from one marketing middleman to
another. This would have been a welcome change, but these
updates were excluded from the final rule this year.
At Chapter, we have trained our experts to help consumers
distinguish between scare Medicare ads and real government
information. But the fact that we have to do this is an
indictment of how brazen some Medicare advertising has become.
The current Medicare brokerage model is broken because
there are no legal requirements for stakeholders to prioritize
consumer interests the way we do at Chapter. This hurts
consumers, and it hurts the reputation of the Medicare program.
Brokers should be held to a higher standard of conduct and
accountability.
Brokers could be required to consider all plans when making
recommendations. Agencies could ensure that their salespeople
are not incentivized to push plans that pay higher commissions.
If we can commit to transparent data, honest tactics, and
putting consumer interests first, we can help Medicare live up
to its promise.
Thank you for your time, and I look forward to your
questions.
[The prepared statement of Mr. Blumenfeld-Gantz appears in
the appendix.]
The Chairman. Thank you very much, and I want you to know,
I took notice particularly of your statement that we missed out
this time on the rules with respect to marketing middlemen.
That is going to change, and I thank you.
Ms. Hoglund?
STATEMENT OF KRISTA HOGLUND, A.S.A., MAAA, CHIEF EXECUTIVE
OFFICER, SECURITY HEALTH PLAN, MARSHFIELD, WI
Ms. Hoglund. Chairman Wyden, Ranking Member Crapo, and
members of the committee, my name is Krista Hoglund, and I am
the chief executive officer for Security Health Plan, a
provider-aligned plan that is part of the Marshfield Clinic
Health System. It is my honor to be here today to discuss this
important topic of protecting Medicare beneficiaries.
Prior to my current role, I served as the chief financial
officer and chief actuary at Security, with nearly 20 years of
actuarial experience, including working on MA bids. And on a
personal note, I am familiar with the consumer side as well, as
both of my parents are Security MA enrollees.
Today I am here to share our experience about competition
and marketing practices in the Medicare Advantage market.
Security Health Plan has offered MA for 2-plus decades, proudly
serving more than 60,000 beneficiaries today. This year for the
first time, the majority of all Medicare-eligible beneficiaries
use MA for their coverage, and it is growing quickly in
popularity.
CMS estimates next year there will be an additional 2
million more MA enrollees compared to this year. However, in
recent years, enrollment growth has not been evenly distributed
among plans. In the most recent open enrollment period, two-
thirds of national enrollment went to just two large national
for-profit companies. We very much appreciate the attention
this committee and CMS have paid to the issue of inappropriate
marketing aimed at seniors, but more must be done.
While consumers get information from many sources when
choosing a Medicare Advantage plan, the single most influential
perspective does remain brokers. We value the important role
brokers play in efforts to ensure our efforts to educate our
consumers, sell our products, and support our members.
Local brokers are a trusted partner for Security Health
Plan and health plans across the country. In fact, 85 percent
of our MA enrollment at Security Health Plan comes from our
more than 500 brokers that we are very proud to partner with.
Unfortunately, we know some large firms and third-party
marketing organizations leverage their influence for financial
gain, rather than what is in the best interest of the consumer.
Many of these field marketing organizations receive add-on
or incentive payments that go above and beyond the CMS-approved
broker commission caps. Instead of collecting the maximum
commission of $611 for a new enrollment, many brokers are
collecting $1,300 or more. This additional compensation is
marked as ``marketing administrative dollars'' and can include
all kinds of additional add-on fees besides that.
This creates an environment in which beneficiaries and,
ultimately, the Medicare program itself are paying out billions
in unnecessary dollars. These aggressive marketing techniques
have real-world consequences.
Just last week in a conversation with one of our trusted
broker partners, he described the ambush that had already begun
ahead of open enrollment, which is technically not allowed,
with his clients receiving as many as five or more phone calls
a day. And his team is barely able to keep up with their
existing customers--answering their questions, making sure they
understand what those calls are about--let alone seek to
support new enrollees who might be interested in enrolling in
MA.
In a previous Medicare open enrollment period, our team
assisted a senior who was tricked into enrolling in another
plan. We worked with the consumer to reenroll in the Security
Health Plan product, not once but four times in a single open
enrollment period. These aggressive tactics make it more
difficult for smaller regional health plans like Security
Health Plan to compete.
Less competition between MA plans means less pressure to
keep costs low and less innovation. This is a disservice to
beneficiaries and taxpayers. I urge you to engage with CMS to
review the practice of add-on broker payments to ensure that
unfair practices are inhibited, especially total payments above
and beyond the CMS caps. Further, CMS and regulators must
remain vigilant in enforcing marketing rules that protect
seniors from misleading and aggressive marketing.
Three immediate changes that can be made to ensure that
brokers remain sufficiently compensated for assisting
beneficiaries, while also ensuring that health plans utilize
Medicare dollars to compete for enrollment based on benefits
and quality are: first of all, standardizing and limiting total
compensation--so rather than a commission, a total compensation
cap; thinking about creating incentives for enrolling
beneficiaries in high-quality and value-based plans; and
finally, transparency in requiring total broker and third-party
marketing compensation, so that we can all understand all the
dollars that might be flowing through these mechanisms.
Chairman Wyden, Ranking Member Crapo, and members of the
committee, again I am honored to be here. Creating a well-
functioning MA program that protects beneficiaries and supports
them in making well-informed decisions is crucial to the long-
term success and sustainability of this program. I thank you
for the time this morning, and welcome the opportunity to
answer questions.
[The prepared statement of Ms. Hoglund appears in the
appendix.]
The Chairman. Thank you very much.
And this of course arrives at such a crucial time, at the
start of the open enrollment season. Let me start with you, Ms.
Hoglund. You gave us an example of what amounts to a jaw-
dropping rip-off. You basically said that some of these plans
are paying $1,300 or more for a new enrollee.
Is it right that when you add up all of these extra costs,
all of the costs heaped onto the system by these middlemen,
this comes to somewhere in the vicinity of $6 billion?
Ms. Hoglund. Yes. I would say that that estimate might even
be low. I mean truly, I think it is really important that we
are recognizing the amount of dollars that we are talking about
here. They are quite significant.
But we are continuing to see this growing trend in paying
these field marketing organizations, these middlemen as you
call them, all kinds of additional fees: technology fees,
referral bonuses, marketing, health risk assessment, and on and
on and on. The list of creative add-ons continues to grow.
And so, this has really become sort of an arms race and
creating this anticompetitive environment where--to my
colleague's point here--that folks are not necessarily being
enrolled in the plan that is right for them. They are being
enrolled in the plan where the largest incentive lies.
The Chairman. Yes, and the reality is, we want competition
in the system based on coverage. I am thinking--my friend and I
worked together back in 2009. We had a bipartisan bill--and
Senator Stabenow was with us on it as well--that would have put
the competition in terms of who would get the best for their
health-care dollar, in terms of coverage and options.
That leads me to my last question for you. The way we
stopped the rip-offs in traditional Medicare--and I mentioned
when I was director of the Gray Panthers, I would go to a
senior's house, and they would go to the back room and be kind
of embarrassed, and bring out 10-15 policies that were not
worth the paper they were written on.
They had these fancy subrogation clauses, and you basically
got nothing. The way we drained that swamp is, we had some
core, standardized principles around which traditional Medicare
is offered. There is competition, but it is competition based
on coverage, not who can win the arms race. Is that really what
you are recommending here?
Ms. Hoglund. Yes, absolutely. We want what you want, which
is, sort of fair and equal competition. But competition,
ultimately, is what is best for our seniors in making decisions
based on the benefits offered, but not the financial
incentives.
The Chairman. So you characterized it as an arms race.
Paint the picture of what would happen if nothing is done.
Supposing that Congress just says, ``We are very busy. We do
not have time to deal with it. And they are making a good point
over there in Finance, but we have a lot of stuff on our
plate.''
I share your view. I think there will literally be a health
care arms race. But paint the picture of what that would look
like.
Ms. Hoglund. Yes. I mean, I think the first thing is, we
would continue to see add-on payments. As I mentioned, there
already is a lot of creativity about what these things can be
called, and I think we continue to see that number grow and
grow if there is no cap or additional transparency, and
ultimately that starts to inhibit competition as smaller
regional plans in particular are not able to afford to keep up
in that arms race and continue to make these add-on payments.
And so, I think that ultimately, it does lead to less
competition, and not things that are in the best interest of
the beneficiaries.
The Chairman. Mr. Blumenfeld-Gantz, just a question for you
about ghost networks. And you know, my 10-year-old is always
wondering why I am always talking about ghosts. You know, the
point really is, 6-8 months ago, nobody knew really what this
was about.
But this is about as stark a rip-off as I can imagine
seeing, because if, say somebody in the audience or a family
member buys a policy that they think will give them essential
mental health services, and then they go to get them, they find
that nobody is there. There are not any providers, and you do
not get any information services, and there may not even be a
directory in terms of where to go.
Why is this so serious? You have looked at this I know, in
considerable detail. Tell the committee why it is so serious.
Mr. Blumenfeld-Gantz. There are a few aspects here, and it
is a really serious issue. I think there are gradients of how
this plays out in practice. On the one hand, on the far side,
as you are alluding to, there are networks that just do not
exist. They are straight-out fraudulent. That is not legal
today. It is an enforcement issue, not a policy issue, because
that is not allowed, based on the rules.
But there is a really complicated gray area in the middle,
where you have networks that do exist, but there are no open
opportunities for patients to schedule appointments, for a host
of reasons, either because the providers are overbooked and
understaffed, or because the tooling is insufficient. There are
a host of reasons.
But I think, even from the well-intentioned perspective,
when there are good intentions, it can still be very
challenging for consumers. And so, when we look at additional
policies or regulations that we could consider, certainly
better enforcement of the true ghost networks that just should
not exist, and there should be better enforcement there.
But I do think there is an issue as well of provider
networks that do exist that are just really hard to access.
The Chairman. Great.
Senator Crapo?
Senator Crapo. Thank you, Mr. Chairman.
Protecting seniors' privacy should be a top priority during
the enrollment process, because Medicare and Social Security
numbers can be used to file false claims or enroll
beneficiaries in plans without their consent. Federal
regulation prohibits marketers, whether calling on behalf of a
plan or a third party, from asking beneficiaries for this
information. However, a recent survey of seniors over the age
of 65 found that 10 percent of all respondents were asked for
their Medicare or Social Security number.
Mr. Blumenfeld-Gantz, outside of the formal enrollment
process, is there a time when a broker or marketer would need a
beneficiary's Medicare or Social Security number?
Mr. Blumenfeld-Gantz. There should not be.
Senator Crapo. What are some of the challenges that the
Federal Government faces enforcing the current guidelines, and
what additional steps should the administration take to conduct
better oversight in order to protect the beneficiaries' privacy
and to prevent fraud?
Mr. Blumenfeld-Gantz. Thank you. As I alluded to in my
opening statement, there were proposals to make it more
difficult for middlemen to sell and transfer data to multiple
consumers. I think that is a really helpful step that would
essentially make it illegal for a middleman to sell the same
consumers' data to multiple additional middlemen, multiple
third parties at the same time, which is the status quo. It is
legal today, and it is what happens today. And that is, I
think, one big step we can take.
Another big step we can take is making it easier to have
more transparent information online. The status quo right now
is that it is very simple, from a regulatory perspective, to
provide information over the phone. It is extremely onerous for
third parties and good actors, including Chapter, to provide
that information online. It is much easier to provide it over
the phone, based on the regulatory framework, and I think that
should be inverted.
Senator Crapo. All right; thank you. That is helpful.
Ms. Hoglund, in your testimony you stated that one entity
alone cannot reasonably educate all current and potential MA
beneficiaries about their plan choices. I also agree that
brokers play a very important role in helping many seniors
navigate their choices, to find the plan that best fits their
need.
You mentioned that brokers are responsible for 85 percent
of Security Health Plan's MA enrollment. Can you expand on how
your company partners with brokers to better serve your
beneficiaries?
Ms. Hoglund. Yes, so I appreciate that question. So, as you
know, the open enrollment period is a relatively short amount
of time, and for a health plan of our size to be able to
service all those enrollees that we would like to in that
period of time is just not feasible.
So, we do believe strongly in partnering, particularly with
our local brokers, who again, in most cases, want the same
thing we want, which is to put the consumer in the plan that is
best for them. And so, we do educational events to make sure
that our communities, the brokers in our communities,
understand what plans we can offer, how those might compare to
other options, and make sure that there is education on an
ongoing basis.
We also make sure that the regulations are communicated,
what is allowed and not allowed in terms of practices. And we
are very particular in who we partner with, making sure that,
again, the brokers are aligned with us and making sure that
they are committed to following the CMS regulations that are
out there around how they interact with our beneficiaries.
Senator Crapo. So, we are very fortunate that your plan is
very responsible, and if we could get every plan to do the
same, we would not have a lot of the trouble we are talking
about here today. How should CMS and Congress balance
protecting seniors from fraudulent or abusive actors, while
also helping plans to ensure that they continue getting the
education and support they need to make these decisions?
Ms. Hoglund. Yes. So I will just say that we certainly have
shared the same concerns with CMS that we are sharing with this
committee today, and they have been very interested and
understanding and are, I think, committed to helping address
this problem in the same way that this committee is. And we
certainly think bipartisan support today would be something
that would be very valuable in helping them move and take
additional steps around addressing areas where there is abuse
or misuse.
You know, we continue to partner with CMS when we have
specific examples as well of where someone has not followed the
regulations, and make sure that CMS has that ongoing awareness,
so that they are in a position to address it.
Senator Crapo. All right. Thank you very much.
The Chairman. I am going to go to Senator Stabenow in just
1 second. I also noted, Ms. Hoglund, that you talked about your
sense that it is these big plans. You talked about two big
plans that are the bulk of the problem, and there are a lot of
people at the local level, brokers and others, who work with
you and the like.
I want to--I am not going to take more time, because it is
Senator Stabenow's time, but I am going to want to follow up
with you on that. Thank you.
Senator Stabenow?
Senator Stabenow. Well, thank you, Mr. Chairman. A really
important question that you just asked, and I want to thank you
and our ranking member for holding this very timely hearing,
particularly because we are now at the beginning of the annual
enrollment period for Medicare.
And so, I do want to start by just stressing that the good
news is that in this enrollment period, 65 million Medicare
enrollees, seniors and people with disabilities, will see new
savings on prescription drugs, thanks to the successful
Democratic efforts about a year ago, such as the $35 cap on
insulin, which is so important; free vaccines; an inflation cap
on Medicare Part B drugs like cancer treatments that I know the
chairman championed--and we appreciate your effort.
And we are also seeing Medicare begin the process. The
first ten prescription drugs will be negotiated in terms of
lowering price, which is long, long overdue. But at the same
time, during this time, why we are here today is that it is
critically important that beneficiaries get the coverage that
is right for them and that they think they are signing up for,
that they think they are paying for, and don't get deceived
into selecting coverage that does not allow them to access the
best and most important services that they want and need.
I think it is really important also to note that because--
being involved in this initial discussion about should we open
Medicare to Medicare Advantage, should the private sector, for-
profit businesses be a part of Medicare--there was an argument
around lowering costs and providing more benefits.
We now are paying 4-percent higher rates for Medicare
Advantage than what is paid for under traditional Medicare, and
that makes it even more concerning that we are seeing $6
billion in taxpayers' funds being used to pay for marketing
middlemen or, Ms. Hoglund, as you said, it may be more.
Actually, we do not know for sure.
But it is even more concerning, given the fact that
Medicare Advantage is already receiving a bonus to participate
and be a part of the Medicare system. I am particularly
concerned about situations, as my colleagues have said, where
people are seeking a particular benefit--special benefits:
dental, vision, hearing, other additional behavioral health
services--and then they find out after they signed up that they
really are not getting the care that they need.
I wanted to speak specifically about, and ask a question
about mental health, Ms. Reeg, because one out of four Medicare
recipients, as we know, have a behavioral health condition--
either a mental health issue or an addiction issue. Many of
them are not able to get the care that they need. That has been
a particular focus of mine for a long time.
But we know that there are so many barriers put up under
Medicare Advantage plans, and we heard about those today: prior
authorizations, required referrals, and so on. I remember
discussing, when we did the Affordable Care Act and offered the
amendment to make sure that we had parity, that you could not
do that, and yet it is still happening.
Now we have President Biden coming out with additional
rules they want to enforce on this whole question. But these
things are still happening through Medicare Advantage. So, when
you are counseling someone to find the best plan for them, how
do you help them understand those barriers? How do you find out
about the barriers, particularly when it comes to mental health
care?
Ms. Reeg. It involves that individual conversation, and
really getting to know our community and the individuals that
we are serving. With regards to mental health, I think you
spoke accurately on the need to know the network and making
sure that there is availability prior to signing up for the
plan.
Additionally, where a lot of consumers miss the education
piece is knowing if there is a prior authorization situation,
where they have to have a relationship with their primary care
physician as a gatekeeper to that specialty care. Those are
things where the SHIPs can help assist.
In Ohio, our SHIP physically sits at the Department of
Insurance. We are very fortunate that we are also home to the
Mental Health Insurance Assistance Office, and we can
collaborate to make sure that we have extended additional
education to those consumers.
Senator Stabenow. Thank you.
I would just say that I still am so concerned, in general,
that we look at mental health or addiction services somehow as
specialty care, rather than just the continuum of health care.
Health care above the neck should be treated the same as health
care below the neck. It should be health care. And so, we start
with barriers for people.
And so, I think at this point, my time is up, Mr. Chairman,
but thank you very much.
The Chairman. And well said by my colleague, who is the
point person in the U.S. Senate for advocacy for mental health,
and we appreciate her comments.
Senator Cortez Masto is next.
Senator Cortez Masto. Thank you.
Thank you, Mr. Chairman, and to the Ranking Member and all
the panelists today for this important conversation. I have to
say, in Nevada as of October of this year, roughly 50 percent
of Nevadans eligible for Medicare are enrolled in an MA plan.
This is such an important issue for my State, and as we are
hearing, of course we need to better leverage transparency
tools across Medicare programs, including Medicare Advantage,
with the enrollment, as we are hearing, and spending growing.
I am actually working on legislation that will help
policymakers and researchers assess the value that these plans
deliver to over 30 million Americans. For today's hearing
though, I do want to focus a little bit on the importance of
transparency for consumers. So, Ms. Reeg, I have heard from
Nevadans, including staff in my own State, in my own office,
who are trying to help their parents as they are trying to
enroll in Medicare coverage for the first time.
They meet with a broker or see an advertisement about
Medicare Advantage plans offering zero-dollar premiums and
boundless supplemental benefits. Sounds good; sometimes too
good to be true. Are advertisements like this misleading, and
if they are, what should the Federal Government--what should we
be doing about it?
Ms. Reeg. They are, and this has gone on for years. In all
of our public presentations and our counseling, we beg the
consumers, do not choose your health plan, your prescription
drug coverage based on an advertisement. The advertisements
will focus on the zero premium, zero copay for primary care,
maybe no copay for generic medication.
But we really want them to look at things like, what is the
copay for inpatient hospitalization per day? When it comes to
Medicare Advantage, also know that maximum out of pocket, which
would be a limit to their financial risk. So, the
advertisements over the years have gotten more aggressive, and
they do focus on those added benefits--specifically cash
allowances, debit cards, money to go into the local drug store
and purchase items that are not covered.
We have counseled numerous individuals, especially over the
past open enrollment year. They were very upset with us,
because we could not use Medicare's Plan Finder tool to order
the plans in order of the highest debit card to the lowest.
When we try to circle back to things like their specific
providers, mental health needs, and other critically needed
services, they really want to focus on those added benefits,
and that has been a challenge for us, due to the
advertisements.
Senator Cortez Masto. So is there--and I understand the
Federal Government's recent steps to curb deceptive marketing,
to help seniors sign up for Medicare coverage. Is that helping?
Do you see some of that----
Ms. Reeg. We are cautiously optimistic. We will know more
as plans go into effect in 2024. Personally, I have seen a bit
of a difference in the commercials that are aired on television
and the online ads. But they are still, you know--and I get it.
Consumers with limited incomes, limited resources, to have
those added dollars each month for groceries or utilities is a
need.
But if we can focus on the critical need, which is their
health care and their medical needs, it could hopefully
redivert them into plans that are best suited to them.
Senator Cortez Masto. And would your recommendation be
stronger oversight on utilization of special election periods,
such as the low-income subsidy special enrollment period and
the block on enrollments for those with cognitive impairments?
Would that help if we were to provide more of that oversight in
these areas?
Ms. Reeg. Yes, I would agree with that. Thank you, Senator.
Senator Cortez Masto. Thank you.
And then, Ms. Hoglund, broker fees. This is an issue for me
as well, and I just--it astounds me that this is happening, but
I am not surprised. I am not surprised. Any time there is an
opportunity to make a profit, you are going to see people
trying to take advantage of that.
I am very curious. How do the brokers earn these extra
incentive payments, and are some of them considered, what we
are hearing now, junk fees? I mean, what is going on here?
Ms. Hoglund. Yes. So I would say the add-on fees really do
vary significantly, and some--perhaps there could be some value
to an FMO, the middlemen we are talking about. They have some
administrative costs, right, to be set up in an ongoing
business.
But when we hear things like they are being paid for health
risk assessments, we do not see a lot of value in having an
agent or a broker complete an HRA with a member. That is not
something where we can get the data and really use it. And so,
there are more and more of those types of things, where we do
not see there being true value. It is just, what creative way
can we come up with to shift more dollars to incent enrollment
in certain plans?
Senator Cortez Masto. So, thank you.
And I know my time is up, but, Mr. Chairman, I too think we
need to address not just the deceptive marketing, but what we
are seeing with the broker fees. The goal here is to make sure
this is not as complex for seniors, so they can access it and
keep more money in their pockets, and not some other predator
who is out there. So thank you.
The Chairman. My colleague, as usual, is way too logical.
And heaven forbid, as we talk about these administrative
costs--and going back to those Gray Panther days, we always
were talking about it. I fail to see how $6 billion in
marketing costs in Medicare Advantage is a reasonable allotment
for administration.
So we are going to work closely with you, and I look
forward to hearing more about your bill.
Next in order of appearance would be Senator Lankford.
Senator Lankford. Mr. Chairman, thank you. Thanks to all
the witnesses for your ongoing work, and for being here and
your preparation today. I really do appreciate it. I am like a
lot of other folks: my family is taking care of elderly
parents, and MA has been a huge asset to us, because it keeps
everything all together. We are able to help manage all that
and to be able to go through the options on it.
So I am one of many folks who are grateful for it, but I
also have questions on how it actually operates and how things
actually work. The medical loss ratio piece about this, and the
gift cards that we have already talked about and such, where
that actually gets listed and how plans actually file that as
medical expenses gets a little iffy in the process.
Are there specific things that you could share that you
would say we can solve some of this by just not allowing the
gaming of the system and how they define these gift cards and
things and what they apply for, to be able to make sure people
are actually focused in on the health-care side of things,
rather than on the free cash side of things? Is that a
definitional issue that we need to resolve? And I am fine with
anyone who wants to take that on.
Ms. Hoglund. I would say, I appreciate you pointing out
there technically is a limit on what is supposed to be spent on
administrative costs. But I think this is where I would say
that more transparency--to your point, perhaps a better
definition of what are administrative costs, what truly are
benefits costs--could be very helpful. And then, any time you
require that transparency, making sure there are enough audits
to verify that folks are completing as intended, and not
getting creative with how they complete the forms.
Senator Lankford. Okay. Any other suggestions on what that
definition could or should be?
Mr. Blumenfeld-Gantz. Thank you for the question. I think
about this as really a combination of health and financial
expenses. Many people, when they are enrolling in a Medicare
plan, do have to make both health and financial tradeoffs.
And so, the question is, how do we make it more transparent
to consumers--the all-in costs, the all-in health coverage that
they are getting? And whether those dollars come out of Part A
or Part B or Part C or Part D with regard to the plan, and
which budget allocation, I think, is secondary to the consumer
but probably very important to the system.
Senator Lankford. I want to drill down a little bit more on
what Senator Cortez Masto was talking about: the advertising.
Advertising is one thing, things that are coming in online or
on the television. It is another issue when I've got seniors
who literally, every single day, get a call. Day after day,
they are getting calls on it.
They are furious about it, obviously, but again, this is a
business that is trying to be able to reach out to potential
customers. We also have that we want to be able to maintain the
options and the awareness of it. How do we strike a balance on
that, because my seniors are sick of all the calls coming in on
it?
Ms. Reeg. If I may, our seniors are sick of it too. When we
are at public events, they approach us afterwards with their
phone, saying how do I make it stop?
And we ask them if they are on the Do Not Call list, but
that is not enough. And Ohio also is home to, I think, over a
quarter-million independent agents that want to do right by
their consumers, and that is not where these calls are
generated from. It is often the lead agencies and these third
parties. And I believe that if the plans were held accountable
for the actions of those middlemen, those entities, it might
curb some of those calls.
Senator Lankford. Okay. What would that accountability look
like?
Ms. Reeg. I think punishments for the plans. And whether it
impacts their star rating on the Medicare tool or financial
penalties, that would be determined up above.
Senator Lankford. Okay.
Let me follow up with another question on this. Medicare
Advantage--and this takes us a little bit off topic on this,
but the issue with some of my rural hospitals especially, they
are getting more and more frustrated with the denials that
happen. Just an automatic, it is going to be denied.
So, trying to get the preauthorization in process so that
they are not going to have denials, or to be able to have a
predictability in the process--what we are seeing is literally,
in my State, we have some hospitals now that just will not take
Medicare Advantage, period. They just cut everybody off and
said, ``We cannot do it because we cannot afford the cost in
chasing for all the denials.''
So that is exactly the opposite of what we want to be able
to create here. What are you hearing on that, and what are
alternatives that you would see?
Ms. Hoglund. So, I appreciate the question. In particular,
we serve a very rural population, and our goal is always to
partner. I mean, we are part of an integrated health system, so
I think that really helps us in thinking about the provider's
perspective when it comes to a variety of issues, including
prior authorization, as you mentioned.
But we spend a lot of time making sure we work closely with
our rural facilities. It is absolutely imperative, right, that
our seniors can get in for care when they need it, and that we
are not putting up unnecessary barriers to necessary care. So,
this is a priority for us, to make sure that we are partnering,
particularly in those rural areas where there are not a lot of
options, so that our seniors can get in for care when they need
it.
Senator Lankford. Okay; thank you.
Mr. Chairman and Ranking Member, thank you for holding a
hearing on this. But this is something we have talked about
before. If they are on a provider list but they are actually
not a provider that is out there, that is frustrating in many
ways.
But if you are a provider and you are told that Medicare
covers this and you just get an automatic denial for it every
time, that also disincentivizes them to be able to be a
provider. So I do think we need to work on both sides of this
issue as well.
The Chairman. It is an important point.
Senator Grassley is next.
Senator Grassley. My turn?
The Chairman. Yes.
Senator Grassley. Okay. I am sorry I missed your testimony
because I had to be in the Budget Committee, also dealing with
something with Medicare and Medicaid.
I am going to start with Ms. Reeg, a couple of questions. I
have heard from Iowa independent agents and brokers about the
new Federal requirements to record all phone calls with seniors
and to store the audio files for 10 years. So, can you say, is
this the most effective way for Federal regulators to conduct
oversight, and are there more effective ways to ensure quality?
Ms. Reeg. Thank you, Senator. While the SHIPs are impartial
and focus on the Medicare beneficiaries--the patients, the
caregivers--as a SHIP that sits within Insurance, I know that
that was a struggle for many of the independent agents, to take
on that added request for recordings.
And as shared previously, those typically are not the bad
actors. It is oftentimes the large brokers, activity that
happens out of State, that is consequential for our Medicare
beneficiaries ending up in the poor plans. I believe recording
the calls from the lead agencies, the third-party marketing,
and the out-of-State brokers may have had an impact.
I am unaware if there have been results or data taken from
that. I am not sure if it was effectual with the independent
agents.
Senator Grassley. Another question for you. In addition to
the current Medicare open enrollment, Medicare Advantage
enrollees can change plans or switch to original Medicare in
the first 3 months of the year. This was added in 2016.
Currently, this open enrollment is not available for Medicare
Part D plans.
Iowans have told me that sometimes their Medicare Part D
plan's pharmacy benefit manager switches the tier placement of
a patient's drug during the plan year. This change can increase
the patient's out-of-pocket cost. Is this a common problem, and
should there be an additional open enrollment period for
Medicare Part D?
Ms. Reeg. Yes. SHIPs, I believe, would support that. So, we
have the open enrollment every fall, October 15th to December
7th. Ideally in a perfect world, every Medicare beneficiary
would accurately review their health and drug options and be in
the best plan come the New Year.
However, we often have to use January, February, and March
to review different Medicare Advantage plans, and we do not
have that option for the individuals that are currently in
original Medicare with a stand-alone plan.
Senator Grassley. Ms. Hoglund, Medicare Advantage
enrollment continues to grow as a percentage of Medicare
enrollment. When I led, in the past, the 2003 Medicare
Modernization Act, 5 million seniors were enrolled in private
health plans. Today it is 30 million. Why are seniors choosing
to enroll in Medicare Advantage plans compared to the original
Medicare?
Ms. Hoglund. I appreciate this question. I agree. I mean, I
think Medicare Advantage is an undeniable success. It offers
pretty high-quality coverage to a lot of Americans. It is one
of the only Federal programs that measures and rewards high
quality.
So I think there is an element of that, that beneficiaries
can see what plans are considered high-quality, and that is
something that is an advantage over other programs. It also, I
think, can be a very valuable program for rural populations and
underserved populations, and so I think that is another reason
perhaps why we have seen some of the success.
As was noted earlier, definitely the additional benefits
are also some things that really do appeal to our seniors and
can help with more well-rounded support for all of their needs,
not just their medical needs, perhaps some of their social
determinants as well.
Senator Grassley. Mr. Blumenfeld-Gantz, a question about
PBMs for you. They can have a significant impact on a seniors'
access to prescription drugs and how much they cost at the
counter where they get their drugs. How does your company help
seniors navigate challenges created by PBMs so seniors can
access a local pharmacy of their choice?
Mr. Blumenfeld-Gantz. At Chapter, we look at every single
Part D plan, and every single prescription, and every single
option of where someone could fill that prescription. That data
is unfortunately not available online. The government does not
publish it; insurance carriers do not publish it.
Chapter is the only organization in the country where you
can actually get accurate information on where to find a
prescription at a specific price on a specific Medicare plan.
That should not be true. It unfortunately is. So what we do
is, we look at all of that data, and we recommend a plan that
minimizes costs, given someone's prescriptions and given any
potential prescriptions they may need to take throughout the
year.
Senator Grassley. Yes. And for you and Ms. Reeg, this
question: what steps have your organizations taken to ensure
that rural Americans receive quality and timely information?
Ms. Reeg. For the SHIP program, we rely on partnerships--
partnerships with the local Area Agencies on Aging,
partnerships with faith-based organizations, partnerships
really with anybody that will partner with us in those
communities--to disseminate information timely and accurately
to those populations, just as we would those in our
metropolitans.
Senator Grassley. Mr. Blumenfeld-Gantz?
Mr. Blumenfeld-Gantz. I think it is really important that
we continue to provide more information to consumers so that
they can make these really difficult decisions. I think without
that, and without better regulation oversight over brokers
themselves, there won't be much improvement.
Senator Grassley. Thank you, Mr. Chairman.
The Chairman. I thank my colleague.
Next in order of appearance would be Senator Blackburn.
Senator Blackburn. Thank you, Mr. Chairman. And I am so
pleased we've got a hearing today on the MA program, and I find
it so interesting that for the first time, most Medicare
beneficiaries have selected an MA program, and it really has
marked a shift, I think, in the thinking of our Medicare
enrollees from fee-for-service over to a value-based system.
And, Ms. Hoglund, I want to come to you first. In your
testimony, you talked about MA enrollment growth not being
evenly distributed through the marketplace, with a
concentration in a few national companies. So I want you to
drill down on that a little bit, about how you see this
affecting the overall competitiveness of the MA program, and
what changes would you suggest we look at as we try to promote
competition?
Ms. Hoglund. Yes. So, absolutely this is a huge area of
concern, as we talked about earlier. I think competition in
Medicare Advantage is what is best. It is what is best for the
consumers; it is what is best for the Federal Government in
terms of spend.
In particular on this topic, what can we do--I would start
with transparency, transparency in all of the dollars that are
flowing over and above that CMS cap, because we do think that
is a lot of what is driving the beneficiary choice. It is not
necessarily what is in the best interest of the consumer, but
where those dollars are flowing.
And so, I think it would be very interesting to track that
data and see--with transparency around total payments--is there
a correlation between those dollars and where we see the
enrollment lining up? And then the second thing there would
be--once we understand and have transparency--to talk about
true maximum caps that encompass not just commission, but total
payments.
And so again, then we are making sure that folks are not
using financial incentives, and it is really about placing the
beneficiary in the plan that is the best fit for them.
And then finally, thinking beyond about, how do we make
sure that that is directed toward high-quality plans and that
sort of thing?
Senator Blackburn. Okay. You touched also on some of the
aggressive and misleading advertising in the MA space. So, a
couple of questions there. Can you give us some specific
examples of impacts on seniors, and what you are seeing there?
And second, for people who have been enrollees, have you
conducted satisfaction surveys to know what they saw as being
aggressive and misleading?
Ms. Hoglund. Yes. So one of the things that we do is, we
watch our disenrollments. We stay right on top of those, and we
often will follow up with consumers when we see those come
through. And it is fairly often that our seniors were not even
aware they were switched. So that is how aggressive the tactics
are, and they are not even understanding.
It might be as basic as, would you like to have your
groceries covered, and the person says ``yes.'' And pretty soon
they are switched. That was the key, so they have no idea that
the question is leading to them being switched on a plan.
We have, as I mentioned in my testimony, a trusted partner
who said, ahead of open enrollment when they are not even
supposed to be allowed, their clients are receiving five, six,
seven calls a day. And so, just call after call after call, and
they are spending a lot of time trying to help reeducate their
consumers on, this is what you have, this is why we think it is
right for you.
Senator Blackburn. Okay. So it is some of those consumer
protection items that you are wanting to see enhanced.
Mr. Blumenfeld-Gantz, I do have a question for you, but I
am almost out of time, and I know others want to ask their
questions. So let us have you do this one in writing and submit
it. I would like to know what you see as the differences
between Chapter and other Medicare advisors. And then with it
being a tech-enabled platform, how do you address the needs of
older enrollees and allow them into your program?
And with that, I will yield back, Mr. Chairman.
Senator Bennet [presiding]. Thank you, Senator Blackburn.
Thank you for your questions.
Senator Menendez?
Senator Menendez. Thank you, Mr. Chairman.
CMS has recently implemented changes to reign in misleading
Medicare Advantage marketing practices. Yet marketers are
finding ways around these requirements. As a matter of fact,
the number of complaints that have been filed has nearly
doubled. A recent Commonwealth Fund survey found that 10
percent of respondents reported that marketing callers would
ask for their Medicare or Social Security number, which is not
permitted under Medicare law. Further, while cold calling is
specifically prohibited, three out of four respondents reported
receiving unsolicited calls.
So, Ms. Hoglund, what should CMS be considering to step up
enforcement and hold bad actors accountable?
Ms. Hoglund. Yes. I think that is a great question, and you
are absolutely right that, despite some new guidance--and we
talked earlier, there has been improvement in some spaces. But
we are certainly seeing, in many spaces, the aggressive tactics
really continue.
So, having CMS be in a position to respond quickly as these
are reported, I think, is really a critical piece, and we
believe they are. I just will share--we continue to hear from
our broker partners on an ongoing basis that this is an issue:
their clients are getting called.
We know sometimes sweepstakes or contests are used as a way
to get them in the door, with folks not even maybe
understanding that they actually have given their information
out. So that is another tactic that we hear that is being used
that perhaps could be addressed.
Senator Menendez. All right, because this is a
particularly, potentially vulnerable class.
Ms. Reeg, as you know, State Health Information and
Assistance Programs, known as SHIPs, are trusted sources of
information for many seniors and people living with
disabilities. These federally funded resources are tasked with
educating and assisting Medicare-eligible individuals through
outreach, counseling, training, and specifically support for
low-income individuals, those with disabilities, and
individuals who are dually eligible for Medicare and Medicaid.
Given your experience as a Program Director, how could
providing more resources to SHIPs support efforts to protect
low-
income individuals and those with disabilities?
Ms. Reeg. Well, it would certainly support the added
counseling that we have been doing for that particular
population. In Ohio, many of our lower-income individuals are
going through the redetermination, some signing up for Medicare
for the first time or enrolling in the low-income subsidy, and
they need extended counseling and assistance to get sometimes
into temporary drug programs to curb the high costs.
So our counseling for that population is taking longer. In
addition, our population has grown. The scope of options and
benefits has grown, and we are trying to keep up with that. We
are fortunate to have our base grant funds and priority one
from MIPPA funds, but it is not keeping up with growth.
Additional funding could support that.
Senator Menendez. Yes. And I am troubled by reports that
vulnerable individuals, particularly low-income and dually
eligible individuals, are being targeted by deceptive marketing
tactics and are often enrolled in plans that just simply do not
meet their needs.
What else can be done specifically to better support these
populations and ensure that the care plan that they need is the
one that they get?
Ms. Reeg. For SHIP programs, many of us utilize direct
entry into Medicare's Complaint Tracking Module, or CTM. And as
I shared earlier, a lot of times we are reactive. They are
already in a plan that is not a good choice for them, and we
are trying to get them either back or into a plan that is a
good choice.
If the plans were required to include the agent on record
in those complaints, it would help us with the investigatory
aspect of it. We are a SHIP, again, that sits within the
Department of Insurance. The only regulatory authority that the
States have really is on agent activity, and it would help us
identify some of the bad actors.
Senator Menendez. Finally, Mr. Blumenfeld-Gantz, we know
that seniors often find the process of selecting their coverage
to be confusing, difficult, overwhelming. I was looking at it,
now that there is open enrollment, and I am not sure that, even
as someone who is pretty well-versed in some of this, I would
know how to make the best decisions.
Many Medicare beneficiaries rely on a broker to assist them
with choosing their coverage. Almost one in three people ages
65 and older said they used a broker or agent to help them
choose Medicare coverage. Yet they still very often do not end
up in plans that are best for them.
What do you think consumers should know about making their
plan decisions?
Mr. Blumenfeld-Gantz. First, brokers are not required to
put consumers' interests first, and I think that needs to
change. We operate differently at Chapter. We do put consumers'
interests first, but that is by far the exception and not the
norm.
So I think it is important for consumers to know what the
incentives of their advisors and their trusted guides are. And
then I think there is a whole host of data challenges that need
to be solved to make sure that the information is available to
consumers so that they can make informed choices, because today
it is very challenging.
Senator Bennet. Thank you, Senator.
Senator Hassan is next.
Senator Hassan. Thanks, Senator Bennet. Thanks to the
witnesses for being here today. I really appreciate you and
your work.
Ms. Hoglund, I want to start with a question for you. As we
have heard today, Medicare Advantage plans are an important
option for individuals on Medicare who are looking for more
comprehensive benefits, such as prescription drug coverage,
vision, hearing, and dental. It is essential that we preserve
this option for seniors, but we also need to ensure that plans
are fairly and accurately representing their benefits. I have
unfortunately heard too many concerns from constituents with
Medicare Advantage plans who are unable to afford the
medications that their doctors prescribe.
While Medicare Advantage plans often advertise
comprehensive benefits, many people are not explicitly told, as
we are hearing today, by marketing agents that their plans do
not include prescription medication benefits. Even for Medicare
Advantage plans that do include those benefits, patients
sometimes do not get appropriate information about whether or
not their medications will be covered, or if the coverage will
change.
So, my office recently heard from a constituent in North
Conway. She has a Medicare Advantage plan, but it has scaled
back her prescription drug coverage. She uses several
medications to treat her autoimmune disease, two of which were
originally covered as preferred Tier 1 drugs under her plan,
with a low copay. However, the plan partially stopped covering
the medications a few months later, after she had already
signed up, which added to her financial burden. And she
previously had a different Medicare Advantage plan that
repeatedly denied her coverage for a third medication that she
has relied on for more than a decade to manage her autoimmune
disease, forcing her to rely on samples provided by her
physician.
Too often, consumers feel that the Medicare Advantage plans
overpromise and then they underdeliver on results. Now you, Ms.
Hoglund, as a CEO of a small health plan with a good record,
know what it is to do this well and right. How can we best
ensure that these big plans provide the benefits that seniors
need? What would you recommend we look at?
Ms. Hoglund. Yes, I appreciate this question. So certainly,
I cannot speak to the specific example, but you know, we have
heard stories like this before.
I mean, one of the things that we are really committed to
is making sure that we maintain a comprehensive and affordable
list, and really working with the individual to address if
there is a change in formulary but their provider indicates
that this is a necessary drug or there are concerns about side
effects for transitioning, and really work with the individual
to make sure that they maintain coverage through an exception
process.
And so, perhaps there could be some more work around how
could that exception process work better, to make sure that
there is consistency across plans.
Senator Hassan. Right.
Ms. Hoglund. The other thing that we talked about a little
earlier is, would a large enough change in the prescription
benefit perhaps be something that could trigger an option for
them to select another plan, because currently that may not be
the case.
Senator Hassan. Got it. Thank you so much.
Ms. Reeg, I also recently heard from a constituent in
Bedford, NH who unfortunately has experienced the kinds of
marketing practices that we have heard about in the hearing
today. This constituent cares for her 26-year-old son who has a
developmental disability and is eligible for Medicare.
Her son was on traditional Medicare, but a Medicare
Advantage marketing agent called his cellphone and got him to
agree to switch his insurance. This company took advantage of
him during a 5-minute conversation, leaving him with a plan
that would not fully cover his health-care needs.
The good news is that his family found out about it the
same day and was able to undo the changes just in time. But
unfortunately, there is nothing stopping, as we have heard,
this kind of unscrupulous marketing for these plans, and
nothing stopping them from targeting the most vulnerable
patients who may not have the resources that they need to
navigate this kind of conversation.
So, Ms. Reeg, how can we prevent these kinds of tactics
from impacting our most vulnerable populations?
Ms. Reeg. I agree. I am sorry to hear that story, but it is
a story we hear time and time again. We have counseled
individuals both under 65 on Medicare due to disabilities, and
individuals over 65 but with extreme cognitive impairments. And
the record that we are able to view on the Medicare system
through MARx shows an enrollment almost every month, which is
far exceeding what the low-income subsidy special enrollment
period allows. So, we do file the complaints, and I think
again, knowing who that agent on record is would allow us to
take a step further in enforcing those rules.
Senator Hassan. Right. Thank you very much, and thank you,
Mr. Chair.
Senator Bennet. Thank you, Senator Hassan, for your
questions.
The good news for all of you is, I think I am the last
person, and I have a few questions that I wanted to ask. Ms.
Reeg, let me start with you. Medicare Advantage plans have
grown in popularity in recent years. Over 50 percent of
Colorado seniors have selected MA plans over traditional
Medicare.
While this private insurance provides seniors with more
options, we need to provide appropriate oversight and protect
seniors from deceptive marketing and properly steward taxpayer
dollars. And I think that is why we are all here today.
I have heard from hospitals across Colorado, like San Luis
Valley Health, about the challenges they face to get their
patients timely care with Medicare Advantage plans.
Consistently, hospitals and their patients experience hospital
admission denials, delays in care, and plans refusing to pay
after they have approved service.
In fact, the head of San Luis Valley Health, Connie Morton,
told me that in the past 6 months, the hospital has made 45
hospital admission requests from MA plans, and every single one
of them was denied. This is in stark contrast to a 93-percent
approval number across other private non-Medicare plans.
This is utterly unacceptable, and I plan to follow up with
the plans directly, plan to follow up with the plans. I have
that plan. [Laughter.] We have to follow up with the plans, and
she was actually quite specific about who the folks were. I
think we are going to have a conversation.
But our seniors deserve better than this. Coloradans with
Medicare Advantage consistently tell me, tell my office, that
their surgeries are delayed, often for months, and that they
were lied to about their level of coverage, or that their plan
was too expensive, and that their claims are denied when they
are told services should have been or would have been covered.
All of this demonstrates, I think, that we need greater
transparency. And so, Ms. Reeg, as a Director of a State
Insurance Department, do you have access to Medicare Advantage
plan denial rates or approval turnaround times, and if you had
access to that data, how would that change your ability to
guide seniors toward the plan that is best for them and their
health-care needs?
Ms. Reeg. Thank you, Senator. At this current time, no, we
do not have access to that level of information. Having access
to that detailed information and accuracy rate would greatly
help us in choosing plans for consumers, and allowing them to
have confidence and peace of mind when enrolling into those
plans.
Senator Bennet. Thank you for that answer, and I have a
follow-up question for you, Ms. Reeg. Coloradans with Medicare
Advantage plans often do not recognize that their private plans
do not cover their doctors until it is too late. In 2018, the
Centers for Medicare and Medicaid Services reviewed 52 Medicare
Advantage plan directories and found that over a third of
providers were erroneously included, either because the
provider did not work at the listed location or because the
provider was out of the plan's network.
These are often known as ``ghost networks.'' Ghost networks
make it difficult for a beneficiary to determine if their
doctors are in network at all, and this misinformation often
leads to unexpected and higher out-of-pocket costs for Colorado
seniors. And that is why I worked with my colleagues, Senator
Ron Wyden and Senator Thom Tillis, to introduce the REAL Health
Providers Act, which will strengthen requirements for these
private Medicare Advantage plans to maintain adequate provider
directories. It would also ensure that seniors do not pay out-
of-network costs for appointments with doctors who were
inaccurately listed as in network.
Ms. Reeg, when you help counsel seniors, as I know you do,
how important is it for them to know that their current doctors
are actually in the network, and do you feel confident telling
them that the provider directories they rely on are accurate?
Ms. Reeg. Network information is vital to choosing a plan.
As shared earlier, no, we do not rely on the directory or even
the Plan Finder linked to the company's website page. We use
that as a springboard for them to work directly with their
provider offices, to see if they are in specific Medicare
Advantage plans.
Network information, not just in network versus out of
network, but also knowing if there is a prior authorization to
utilize specialists, are hurdles that we often go over with
Medicare beneficiaries.
Senator Bennet. I do think--I am at an end, so I am not
going to ask my third question. I will submit it for the
record.
But I appreciate your testimony very much. To me, this is
just one more place where seniors are having to spend their
golden years fighting, fighting, fighting just to get the
health care that people in other countries have relied on. And
when it comes to Medicare, that is something that people
generally, I think, feel pretty good about in our country.
So thank you. We are going to fix this problem, and I
really appreciate your testimony here today.
Senator Casey, you are next. I am going to turn it over to
you. Thank you.
Senator Casey [presiding]. Thank you, Senator Bennet. I
want to thank the witnesses. I was at another hearing, so we
had a conflict, so I did not hear your testimony. But I am
grateful for your willingness to be here today and to testify
about these important issues.
Ms. Reeg, I will direct both of my questions to you. In
your testimony, you mentioned the kind of information and
marketing tactics that ``often lead to poor enrollment
decisions and undesirable outcomes.'' Medicare, as we all know,
is a promise, and here is the basic promise: guaranteed access,
no questions asked; guaranteed access to health care after a
lifetime of hard work.
Unfortunately, that promise is not often enough fulfilled.
Despite this promise, which everyone, every member of the U.S.
Senate and House, is bound by, despite this promise, we know
that many older adults and people with disabilities still have
a hard time getting quality coverage because they are either
confused by the enrollment process, or influenced by misleading
marketing, or both.
Ensuring that there is both clear information and accurate
information about enrollment in different health plans is the
very least that government can do, so that Medicare-eligible
individuals are appropriately educated on how to make the most
of their earned health-care benefits. That is consistent with
keeping the promise.
I have introduced the so-called BENES 2.0 Act--the
Beneficiary Enrollment Notification and Eligibility
Simplification Act--with Senator Young of Indiana. The bill
would provide advanced notice to individuals approaching
Medicare eligibility, as well as timely information on when to
sign up for Medicare.
So here is my question. How important is the role of SHIP
counselors like yourself in ensuring Medicare beneficiaries can
make the best decisions for their needs?
Ms. Reeg. We feel it is vital. We provide objective and
unbiased guidance. No one affiliated with the SHIP program can
have a financial gain or a conflict of interest in dealing with
the information that is going out there.
We provide that, and unfortunately, we see the same. Just
this month, we were working with a gentleman who was undergoing
active cancer treatment, and he got a phone call and enrolled
in a different managed care plan that none of his specialists
were involved in. We were able to get him back into his other
plan and back on his plan of care.
Senator Casey. We appreciate the work that you do. And I am
also concerned about a question that has arisen, I know, in a
lot of these discussions, which is that SHIPs may not have the
resources they need to meet the growing demand, due to growing
demographic trends and other challenges.
Medicare funding to SHIPs and other resources for low-
income outreach and enrollment efforts may be in jeopardy,
because it was not included--not included--in the recent
continuing resolution. How can you speak to the needs for
continued resources for SHIPs, given the demands and challenges
you are facing and the implications for low-income older adults
if funding is not extended this year?
Ms. Reeg. I think it is important to note that the SHIPs
are very good stewards of Federal funding. The return on
investment--with both volunteer counselors and the hours that
they put in and the dollars saved by enrolling consumers in the
most cost-effective plans, signing up for the low-income
subsidy or extra help with their prescription drugs, and the
influx of assisting consumers with applying for Medicare
savings programs--far outweighs the dollars that are included
in the current grant models.
But the growing population, the growing scope, and the
demand in every State, would warrant the additional dollars.
Senator Casey. Well, thanks very much, and thank you for
your testimony.
And now I will turn it over to Senator Warren.
Senator Warren [presiding]. All right. Thank you, Senator
Casey.
So this week, millions of people will begin the process of
choosing a Medicare plan through open enrollment, and one
option is to stay with traditional Medicare. The other is to
enroll in one of the many Medicare Advantage plans, or MA as
people often refer to it, which allows these for-profit health
insurance companies to offer Medicare coverage.
Now in theory, these private companies should compete on
the merits of the coverage they offer. Instead, big MA insurers
with a war chest of advertising money use deceptive marketing
tactics to lure seniors into the wrong plans. These companies
exaggerate benefits, they claim that seniors can keep seeing
doctors that are actually out of network, and they deceive
seniors about how much they will spend for out-of-pocket care.
This is harmful to seniors, and that is a big part of what this
hearing today has been all about. But I want to focus on a
different point. It also drowns out competition from smaller
insurers, even when they offer a better product.
So, Ms. Hoglund, you are the CEO of Security Health Plan.
This is a small community-based plan that participates in
Medicare Advantage.
So, let's start with this: how does your marketing budget
compare to the marketing budget, for example, of United Health
or Cigna?
Ms. Hoglund. Well, I obviously do not know the specifics of
what that number might be, but I can tell you it is pennies on
the dollar, a fraction of what we would have to spend.
Senator Warren. Okay. So, everybody is out there trying to
sell their plans to people, and some folks have got huge
marketing budgets, and you have a little sliver of that. So
where do these big insurance companies get the budget for all
of this advertising?
Well, think about the structure here. The government pays
MA plans a set amount of money per beneficiary. If a
beneficiary is sicker, then the amount of money that the
government pays can go up, and then whatever the insurers do
not spend on care, they get to keep in profits.
Now, as a result of this structure, giant insurance
companies have built an entire business around making
beneficiaries look as sick as possible by stuffing their
medical records with as many diagnosis codes as possible, which
means the government pays insurers more money. This is called
``upcoding,'' and government watchdogs have uncovered hundreds
of billions of dollars in overpayments that result from
insurance companies gaming the system like this.
Ms. Hoglund, are Medicare Advantage plans permitted to
spend the money they make off this upcoding on advertisements?
Ms. Hoglund. So, there is some amount of discretion in how
the dollars can be spent. I do want to say I really do
appreciate this question and how you framed it. I would agree
with you that we should be competing on the merits of coverage,
not on the financial incentives.
We certainly believe at Security Health Plan in care, not
coding, with care as the focal point.
Senator Warren. I am very glad to hear this, because my
understanding is, these plans can spend about 15 percent of the
money they get from the Federal Government--these are your tax
dollars at work--on overhead and marketing.
Nothing prohibits them from using the payments they get
from gaming the system to actually draw more people in, so they
can keep that practice up. So the way I think of this is, the
Medicare Advantage plans that game the system get billions of
dollars in overpayments. They then turn around and use that
money to flood seniors with deceptive ads, to lure them to join
their plans.
But there is one more twist in this. Once people sign up,
once the companies make them look as sick as possible, these
giant insurance companies refuse to deliver on the care that
they actually promised. Now in 2019, the Health and Human
Services Inspector General found that Medicare Advantage
insurers improperly denied payment for care in roughly one out
of five claims, leaving seniors with piles of unpaid medical
bills.
And in just 2 months last year, the giant insurance company
Cigna used a computer algorithm to instantly deny payment for
300,000 claims, even though trained doctors are supposed to
make those determinations.
Ms. Hoglund, giant Medicare Advantage insurers are
overcharging the government, they are peddling false promises,
and then they are turning around and denying care to seniors
and people with disabilities. So this is why CMS has taken
steps to start to crack down on deceptive marketing and unfair
denials of care. Do you think that the government's proposals
go far enough?
Ms. Hoglund. No. I think there is more opportunity, and
again, that is why we are here today. One of the things that we
specifically have suggested around the marketing tactics that
are currently out there, and the additional payments that we
see going to FMOs or middlemen, is to really require some
additional transparency so that it is very clear what all the
dollars are and how they are flowing, to understand who might
be the bad actors so that those can be addressed specifically,
and then really thinking about, once we understand how the
money flows, how do we put true maximum caps on some of these
items so that they cannot continue to be leveraged for
financial gain?
Senator Warren. Well, I very much appreciate it, very much
appreciate your help in trying to expose these problems today,
and I appreciate the help from all of you. You know, it is
simple: responsible insurers do not lie and cheat seniors to
make a buck.
But it is clear that the big Medicare Advantage insurers
are not playing by the same set of rules as some of the smaller
insurers. I appreciate the steps that CMS has already taken,
but they need to go further by making the Medicare Advantage
insurers publish accurate data on patient care and out-of-
pocket costs, and cracking down on practices like upcoding--
doing all of this to the full extent of their authority.
So, thank you all for being with us today. And with that,
for the information of the Senators, questions for the record
will be due by 5 p.m. on October 25th, and this hearing is
adjourned.
[Whereupon, at 11:45 a.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Prepared Statement of Cobi Blumenfeld-Gantz,
CEO and Co-Founder, Chapter
introduction
Chairman Wyden, Ranking Member Crapo, and members of the committee,
thank you for inviting me to testify. My name is Cobi Blumenfeld-Gantz.
I am the CEO and co-founder of Chapter, a technology-enabled Medicare
and retirement navigation platform.\1\ I started Chapter because the
Medicare enrollment and navigation process is broken, and consumers
deserve better. I want to thank and commend the committee for holding
this hearing and dedicating time to this important topic.
---------------------------------------------------------------------------
\1\ Memoir, Inc., d/b/a Chapter (``Chapter'') is a privately owned,
data and technology-enabled advisory that helps older Americans
navigate retirement (www.askchapter.org). Licensed insurance agency
services are provided through Chapter's wholly owned subsidiary,
Chapter Advisory LLC. In California, Chapter Advisory LLC does business
as Chapter Insurance Services.
This topic is personal to me. My parents were the first two people
that Chapter supported because they needed help fixing mistakes they
made when following the advice of a traditional broker. Through
building Chapter to serve a growing portion of the approximately 65
million Americans who benefit from Medicare, I've learned that my
parents' experience of confusion and costly mistakes was far from
---------------------------------------------------------------------------
unique.
When my parents first enrolled in Medicare several years ago, a
broker advised them to choose a plan that was more expensive than an
identical alternative. The broker had no obligation to consider every
plan option or to prioritize my parents' interests over his own.
While CMS, consumer advocates, and policymakers have made
significant progress since my parents enrolled in Medicare, further
steps are needed to improve the consumer experience, quality and
availability of data, and the behavior of brokers and third-party lead
generators and advertisers.
The Medicare program is tremendously complex. Medicare Advantage
plans can each have different networks of health-care providers,
different coverage for prescriptions, different medical and
prescription copays, and differences in dozens of nonmedical benefits
like dental services, transportation allowances, and hearing aids. The
number and diversity of plans creates broad choices for consumers
looking to maximize their savings, benefits, and coverage. But the
complexity and optionality also means that consumers deserve the option
of working with a trusted guide to support them with these
consequential decisions.
Today, Medicare navigation and enrollment is far too confusing,
costly, and consumer unfriendly. The system is rife with misaligned
incentives and data opacity. Consumers should be able to easily
navigate plans and have a trusted guide to support them. Mistakes in
coverage selection can result in hundreds or thousands of dollars of
extra annual costs for consumers, and even the inability to afford
lifesaving medications or to see preferred doctors without the risk of
paying completely out of pocket.
chapter's approach
Before I highlight some of the significant challenges impacting
consumers navigating Medicare, I want to share our unique approach to
providing Medicare guidance. This work has afforded us insight into
what consumers are up against. Unlike other insurance agencies, we did
not start working on Medicare as just another offering to complement
other insurance products. We built Chapter to focus specifically on
issues related to Medicare and retirement, and we designed our model
around the distinct needs of this consumer group and the unique
characteristics of Medicare plans.
At Chapter, we help Americans decide when to enroll in Medicare and
how to cover costs and services not covered by original Medicare. To do
this, we've had to engineer a Medicare plan data model from the ground
up. We've built a plan recommendation platform that considers every
option in the country across Medicare Advantage plans, Medicare
supplements, Part D prescription plans, and Special Needs Plans for
those who are dual-eligible or have chronic conditions. Our platform
tailors recommendations based on consumers' health-care providers,
prescription drugs, additional benefit needs, lifestyle choices, risk
preferences, and budget. The result is a coverage recommendation suited
to the consumer's particular needs and preferences.
Our interactions with consumers are far from a one-time
transaction. Consumers who rely on Chapter work with a consistent
Medicare advisor who guides the consumer through the process of
choosing coverage and signing up for a plan. The process frequently
includes several conversations with the same advisor as a consumer is
preparing to retire, for example.
We also support consumers with challenges beyond their enrollment.
We help them navigate their Medicare coverage, including by finding
specialists who are in-network, determining the most cost-effective way
to purchase prescriptions, activating and accessing benefits, and
answering the maze of other questions that arise.
Critically, our plan recommendations are based solely on the needs
of the consumer, and they are never limited to the subset of insurance
companies with which we have contracts--nor are they influenced by
those contracts. To maintain
consumer-first incentives for our licensed Medicare advisors, their
compensation does not vary based on which coverage a beneficiary
selects. Consumers are less likely to wind up on the wrong plan when
the incentives of their advisors are not stacked against them.
We operate this way because no consumer should enroll in a
suboptimal Medicare plan simply because a broker recommends or
contracts with a limited number of plans.
We have made significant efforts to put consumers first. But it is
not easy. We have a team of exceptional engineers, data scientists,
product managers, and Medicare advisors dedicated to demystifying
Medicare for everyday Americans, and we've invested tens of millions of
dollars into building an unbiased platform.
There are many challenges that confuse and deceive consumers. I'd
like to highlight three areas where improvement is needed.
1. Improving plan data availability.
2. Eliminating deceptive marketing.
3. Putting consumers' interests first.
improving plan data availability
Consumers deserve significant improvements in the quality and
availability of data, specifically on health plans' networks, benefits,
and other features. This data should be publicly available and easily
accessible. Without improvements, consumers--along with the many
organizations trusted to guide them--will continue to struggle to make
informed Medicare coverage choices.
One of the tools with the greatest potential to help consumers is
Medicare.gov's Plan Finder, which is also used by consumer advocacy
groups and many organizations providing telephonic support. While Plan
Finder is a useful resource and the team at CMS has made great strides
in improving access to data, limitations in the current offering
illustrate data-quality and availability issues.
Specifically, Plan Finder lacks integrated provider network data,
and it has insufficient information on ancillary benefits included in
Medicare Advantage plans, such as dental services, hearing aids,
transportation, and over-the-counter benefits. These limitations
significantly impede a consumer's ability to choose the right plan. In
addition, despite recent policy efforts, provider network data is not
widely available via public APIs.
Consider a consumer who has three doctors and wants to determine
the network status of their doctors across local plans. Because of the
large number of Medicare Advantage plans locally available to the
average consumer, this consumer might need to conduct over one hundred
separate searches across each insurance company's website and track the
comparisons independently. It is not reasonable to expect a typical
consumer to do this, and it is no surprise that many consumers may not
fully understand the network status of their doctors across each plan.
Additionally, a consumer requiring hearing aids and dental coverage
cannot use the Plan Finder to compare plans based on the amount of
dental coverage or copays for hearing aids. While consumers can sort by
whether a plan has any dental or hearing coverage, the binary filter is
not sufficient because the annual benefit amounts can vary in the
hundreds or thousands of dollars across plans.
eliminating deceptive marketing
The second set of challenges relates to confusing and often
deceptive marketing tactics, particularly those employed by third-party
lead generators. Last year, this committee published a report outlining
many of these marketing issues,\2\ and we commend the committee's
ongoing focus on this topic.
---------------------------------------------------------------------------
\2\ https://www.finance.senate.gov/imo/media/doc/
Deceptive%20Marketing%20Practices%20
Flourish%20in%20Medicare%20Advantage.pdf.
Every fall during the Medicare annual enrollment period, Medicare-
eligible consumers are bombarded with mailers, advertisements on
television and the radio, and phone calls. While the sheer volume and
noise of these materials is itself a challenge, the misleading and
---------------------------------------------------------------------------
pernicious content of these advertisements presents the most concern.
We frequently hear from consumers that they are confused by mailers
and other ads because the materials are designed to look like they're
from the government or because they make misleading claims.
There are a variety of bad actors in the Medicare lead generation
space. The bad actors are typically not local brokers who live and work
in each community. Rather, they are lead generation businesses that
traffic on scare tactics, imitate government agencies like the Federal
Medicare program, and inaccurately advertise plan benefits that either
simply are not available to all consumers receiving the advertisements
or that fail to acknowledge trade-offs like the fact that plans
offering certain benefits might leave consumers' preferred doctors out
of network.
Furthermore, these advertisements don't clearly display the
organization that the consumer is being prompted to contact. The
obfuscation may be intentional because these actors often generate
leads for the purpose of selling them onward to a variety of brokers,
insurance companies, and even other lead generators.
Deceptive marketing is even more problematic when Medicare plan
information is less accessible to consumers and industry participants.
Without the ability to easily compare benefits across plans, it is
challenging for consumers and well-
intentioned brokers alike to make informed coverage decisions based on
that marketing.
These deceptive marketing practices should stop, and consumers
deserve to understand who is contacting them. CMS previously proposed
regulations to prohibit the transfer and sale of consumers' personal
information from one third party lead generator to another. However,
the provision was not included in the final marketing rule for the 2024
plan year.\3\ While there are other regulations designed to protect
consumers that are newly effective as of this year's annual enrollment
period, there is further opportunity to strengthen the transparency and
clarity of regulations around third-party lead generators.
---------------------------------------------------------------------------
\3\ 88 Fed. Reg. 22120 at p. 22235.
---------------------------------------------------------------------------
putting consumers' interests first
The current Medicare brokerage model is broken because it does not
require brokers and other stakeholders to put consumers first. There
are no legal requirements that mandate prioritizing consumer interests
in the way that we do at Chapter. The lack of such requirements and
related lack of consumer awareness is a significant problem facing
consumers navigating and enrolling in Medicare options.
Brokers should be held to a higher standard of conduct and
accountability. There are policy pathways for accomplishing this. For
example, brokers could be required to consider all plans when making
recommendations, and agencies could ensure that their salespeople are
not incentivized to push plans that pay higher commissions. We would
support such a higher standard that prioritizes consumers' interests.
I want to close by summarizing a few principles for consideration
as the committee continues its work on Medicare Advantage and the
broader Medicare marketplace.
Consumer-first standard: Any trusted guide used by a
consumer should be obligated to place consumers' interests
first. There are thousands of Medicare plans available across a
variety of plan types. This diversity of options means that
consumers can find truly excellent coverage, but they often
need a trusted guide to help them through the process.
Information across all types of Medicare plans: Consumers
deserve to be informed about all types of Medicare plans that
are available to them. These include Medicare supplement plans,
stand-alone Part D prescription plans, coverage under original
Medicare, Medicare Advantage plans, and Special Needs plans for
people with both Medicare and Medicaid or people who have
qualifying chronic conditions, for example.
Complete coverage search: Any trusted guide--whether a
broker or another entity--should be obligated to search among
all options available to the consumer. Consumers should never
receive a limited set of options or a suboptimal recommendation
simply because a broker works with a limited number of
carriers.
Transparent and accessible plan data: Consumers and their
trusted guides must be able to easily search and compare plans
based on their full features. These include plans' provider
networks, formularies of covered drugs, ancillary benefits, and
the premiums, out-of-pocket limits, and costs of each service,
prescription, and benefit. The complexity of Medicare plans
requires clear transparency on the specific differences between
plans, and consumers cannot reasonably be expected to wade
through hundreds of pages of Summaries of Benefits or Evidences
of Coverage to understand these items.
Transparency in advertisements: Third-party marketing and
lead generators should be required to clearly identify who they
are and the specific organization that will contact the
consumer--or which the consumer is being prompted to contact.
I am grateful to the committee for your ongoing work to improve the
Medicare navigation and enrollment experience for Americans.
______
Questions Submitted for the Record to Cobi Blumenfeld-Gantz
Questions Submitted by Hon. Ron Wyden
Question. I worked closely with my colleague, Senator Hatch, on the
CHRONIC Care Act to give Medicare Advantage (MA) plans the flexibility
to offer supplemental benefits to help people with chronic conditions
stay healthy. For example, under the CHRONIC Care Act, MA plans can
offer air conditioners to enrollees more likely to suffer from extreme
heat or grab bars to improve bath safety.
However, Medicare Plan Finder provides limited information about
the generosity, copayments, provider networks, prior authorization, and
other limitations on supplemental benefits. This limited visibility
into supplemental benefits makes it difficult to predict whether a
senior will be able to use the benefit available to them.
Based on your experience working with clients, how important are
supplemental benefits?
Answer. Supplemental benefits offered by Medicare Advantage plans
frequently fill critical gaps in services not covered by original
Medicare. Beneficiaries often choose plans based on not only coverage
of preferred providers and prescriptions, but also benefits like dental
and vision services, hearing aids, transportation to doctors' visits,
over-the-counter allowances, grocery support, and many others.
That said, Medicare Advantage plans vary not only based on their
inclusion of these benefits, but also on amounts of each benefit. For
example, some plans may cover only a few hundred dollars in dental care
or towards the cost of a new pair of hearing aids, while others may
cover thousands of dollars annually. It's critical that consumers have
the information and tools to search among plans not only based on the
inclusion of a particular benefit type, but also based on the magnitude
of each benefit. Equally, consumers need to understand how to activate
and use certain benefits, which are often redeemable through a maze of
third-party organizations with which insurance companies contract to
administer those benefits.
Unfortunately, Medicare.gov's Plan Finder does not currently
support the ability to search based on the size of the benefit, nor
does it inform consumers on how to use those benefits.
Question. How do you help seniors navigate these options? Can you
tell whether their dentists will be in network or if they might qualify
for a Supplemental Benefit for the Chronically Ill?
Answer. At Chapter,\1\ we help consumers understand not only
whether certain plans have benefits, but also the size of each benefit.
Our platform categorizes and extracts benefits information--including
the amount offered for a benefit, like the number of rides or dollar
value of dental services--from plan documents like Summaries of
Benefits or Evidences of Coverage, as well as from raw data provided
from insurance companies to CMS but not made searchable on Plan Finder.
---------------------------------------------------------------------------
\1\ Memoir, Inc., d/b/a Chapter (``Chapter'') is a privately owned,
data and technology-enabled advisory that helps older Americans
navigate retirement (http://askchapter.org/). Licensed insurance agency
services are provided through Chapter's wholly owned subsidiary,
Chapter Advisory LLC. In California, Chapter Advisory LLC does business
as Chapter Insurance Services.
Of course, there are limitations to the available data, and we
support much stronger requirements for insurance carriers to publish
structured data on provider networks, including dental networks. This
would help to ensure that we have the most accurate information when
---------------------------------------------------------------------------
guiding Americans.
We also have a team of member advocates who help consumers to
understand, activate, and use their benefits. This full-time team also
helps consumers with emergent health or dental needs to find in-network
providers and troubleshoot other nonclinical issues that arise with
their coverage.
Question. What kind of information would you like to have to help
your clients choose the plans that best fit their needs?
Answer. Several types of additional data would be helpful:
Publicly available provider directories via API: Most
carriers do not provide publicly available APIs with
information on which providers (e.g., hospitals, doctors,
dentists) are in network versus out of network with respect to
each plan. While some carriers provide their networks via
private data vendors and intermediaries, many carriers do not.
We agree with CMS that this information should be publicly
available in API format (https://www.cms.gov/priorities/key-
initiatives/burden-reduction/faqs/provider-directory-api.)
Data on prior authorization turnaround times and denial
rates for common procedures: While carriers do disclose whether
certain types of services are subject to prior authorization,
we have heard from consumers and providers alike that prior-
authorization requests are sometimes slowly adjudicated and
that denial rates can be quite high. It would be helpful for us
to know the turnaround times and denial rates for each plan
across common procedure categories, like inpatient hospital
admissions via emergency rooms, major joint replacements, etc.
Better data on supplemental benefits: We spend significant
time and effort structuring data on supplemental benefits that
are found only in Summaries of Benefits or Evidences of
Coverage. We would urge broader and more standardized
disclosure of supplemental benefits, their amounts, and the
third-party vendors (if any) used by carriers to administer
those benefits. Furthermore, we would support clearer
disclosure regarding the process for activating supplemental
benefits, as activating benefits is often challenging for the
typical consumer. Sometimes, the process to activate a benefit
can be so onerous that consumers report they are unable to
access money or services that were marketed to them.
Carriers should also make it possible for consumers to
designate third parties who can query carriers for data on
utilization of benefits, such as the remaining balance on a
grocery or over-the-counter allowance. This data will help
designated third parties build tools that help consumers to
understand and use the benefits that were marketed to them.
Better ways to help consumers confirm Medicaid or LIS/Extra
Help Status: Many lower-income consumers are unsure if they are
eligible for programs like Medicaid or the Low-Income Subsidy,
or they are uncertain of their level of support. Eligibility
for these programs can often materially reduce the copays or
out-of-pocket responsibility that consumers face for certain
medical services and/or prescriptions, and accordingly impact
the plan selection process. It would be helpful for brokers to
have direct access to reliable systems to help consumers verify
their Medicaid and LIS/Extra Help status, contingent on
receiving appropriate consent from the consumer. Without this
information, consumers risk making poorly-informed decisions
about their Medicare choices.
______
Questions Submitted by Hon. Sherrod Brown
Question. Part of the information overload that so many older
Americans experience when trying to enroll in a health plan is a result
of deceptive marketing from private insurance companies.
Around this time of year, older Americans are inundated with
advertisements, phone calls, and mail regarding Medicare enrollment.
CMS has reported that complaints related to marketing for Medicare
Advantage plans--run by private insurance companies--more than doubled
in 1 year, from less than 16,000 in 2020 to nearly 40,000 in 2021.
And many plan directories list inaccurate information about
providers--further complicating the process.
In an investigation led by Chairman Wyden last year, this committee
found two Medicare Advantage plans in Ohio where 75 percent of the
providers listed as in network were inaccurate or unavailable. This is
unacceptable.
What can Congress do to continue to improve the oversight of these
harmful marketing practices?
Answer. As I mentioned in my written testimony, we support the
following principles that Congress and policymakers can consider as
part of their work to improve Medicare Advantage marketing and the
broader Medicare marketplace.
Consumer-first standard: Any trusted guide used by a
consumer should be obligated to place consumers' interests
first. This is not the status quo. Most Medicare guides put
consumers' interests below their own. There are thousands of
Medicare plans available across a variety of plan types. This
diversity of options means that consumers can find excellent
coverage, but they often need a trusted guide to help them
through the process. Government programs like State Health
Insurance Assistant Programs and 1-800 Medicare, while helpful,
cannot provide the personalized, plan-specific, and
longitudinal support that private Medicare brokers can provide
to guide consumers. Furthermore, efforts to further standardize
broker compensation, while well-
intentioned, do not solve the fundamental issue if brokers are
still permitted to contract with--or search--a subset of
insurance plans. We believe that only an affirmative ethical
and regulatory obligation to put consumer interests first, in
part by requiring a search of all available options (as
discussed below), will be sufficient to fix many of the issues
plaguing Medicare marketing.
Information across all types of Medicare plans: Consumers
deserve to be informed about all types of Medicare plans that
are available to them. These include Medicare Supplement Plans,
standalone Part D prescription plans, coverage under original
Medicare, Medicare Advantage plans, and Special Needs plans.
Complete coverage search: Any trusted guide--whether a
broker or another entity--should be obligated to consider every
option available to the consumer. Consumers should never
receive a limited set of options or a suboptimal recommendation
simply because a broker works with a limited number of
carriers. Today, there are very few, if any, resources--aside
from Chapter--that check every option available to a consumer.
Transparent and accessible plan data: Consumers and their
trusted guides must be able to easily search and compare plans
based on their full features. These include plans' provider
networks, formularies of covered drugs, ancillary benefits, and
the premiums, out-of-pocket limits, and costs of each service,
prescription, and benefit. The complexity of Medicare plans
requires clear transparency on the specific differences between
plans, and consumers cannot reasonably be expected to wade
through hundreds of pages of Summaries of Benefits or Evidences
of Coverage to understand these items.
Transparency in advertisements: Third-party marketing
organizations and lead generators should be required to clearly
identify who they are and the specific organization that will
contact the consumer--or which the consumer is being prompted
to contact.
More online transparency: CMS and carriers should make plan
information available through open APIs that brokers and others
can use to make comparisons more understandable and transparent
for consumers.
______
Questions Submitted by Hon. Maria Cantwell
Question. I've heard from multiple constituents enrolled in
Medicare Advantage that their trusted providers were removed from their
insurers' networks without notice. One constituent enrolled in a
Medicare Advantage plan without realizing that his network of providers
would be very limited. At one point, he was seeing a University of
Washington doctor for a knee injury. The doctor recommended a knee
replacement, and the constituent wanted to move forward with the
procedure. However, his Medicare Advantage plan then told him that the
doctor he saw was no longer in network and told him he had to use a
different surgeon. The surgery was not urgent, so my constituent was
able to wait until he could switch plans during the next enrollment
period and then saw his surgeon of choice.
The lack of transparency around who is and is not in network
creates administrative headaches and confusion for patients. When
people are choosing their plans, they sometimes cannot find clear
information about which providers are in network at each plan. Across
health insurance plans, networks are often outdated. Some insurance
plan directories even include listings for doctors who are no longer
accepting insurance or have died. This confusion is unacceptable.
Medicare recipients should not be forced to spend hours calling around
to figure out whether their plan will let them see their doctor. It's
also devastating for them to build trust with a provider, only to then
find out that the network changed and they have to start over with
someone new.
In your written testimony, you describe how Medicare.gov's Plan
Finder could be a useful resource to help patients pick a plan based on
its network of providers if it was structured in a more user-friendly
way.
What should Medicare.gov change to make this tool more useful for
consumers?
Answer. We would suggest several changes:
Medicare.gov should provide structured data via APIs on all
relevant benefit components, including prescription retail
prices and provider networks. While Medicare.gov does provide a
significant amount of data via APIs, there is more it must
provide to adequately inform consumers. There are many private
organizations that can build helpful tools for Americans, but
Medicare.gov does not provide sufficient data today to support
this innovation ecosystem.
Medicare.gov's Plan Finder should be improved to allow
consumers to search or rank plans based on provider network
status. It is not possible to search provider network status on
Medicare.gov today.
This improved functionality will require
Medicare.gov to collect and structure data on every plan's
providers, National Provider Identifier (NPI), site of
practice, and network status with respect to each Medicare
Advantage plan.
The Medicare Advantage program permits and
encourages insurance companies to design networks of preferred
providers to promote quality and cost-effective care, but the
Medicare program and insurance carriers must do a better job in
making network information available to consumers.
Consumers should be able to search plans' supplemental
benefits in a more effective manner.
Currently, consumers cannot use the tool to
compare plans based on the size of a benefit, like the amount
of coverage for dental services.
Consumers can only search for plans that have
any level of coverage for services like dental care or hearing
aids, but the amount of coverage for these benefits varies
tremendously across plans.
Prescription costs from direct-to-consumer options:
While Medicare.gov does allow consumers to
input prescription drug information and search among plans, it
does not allow consumers to see if there are more cost-
effective options for filling their prescriptions.
For instance, many retail drug discount
programs or direct-to-consumer pharmacies currently offer more
affordable copays on several prescriptions, relative to the
majority of Part D plans. If Medicare.gov surfaced copays not
only across Part D plans (and the Part D benefits included in
many Medicare Advantage plans), but also across these direct-
to-
consumer options, consumers could save significantly more on
their medications.
Question. The American Psychological Association has noted that
workforce shortages and inaccurate networks make it particularly hard
for mental health patients to find care. Sometimes, a listed provider
is overwhelmed and cannot actually accept new patients.
Should networks be required to display a ``limited availability''
marker to indicate whether a provider can accommodate new patients?
Answer. Yes, provider networks should show accurate and up-to-date
information on whether a provider is accepting new patients.
While some carriers already provide this information, it is often
inaccurate or out of date.
However, I should also acknowledge that providers share a
significant part of the responsibility here. It is not reasonable to
expect an insurance company to independently track whether any given
provider--who likely also sees patients from many other insurance
companies--is able to accept new patients. Solving this problem will
likely require collaboration across providers, insurance companies, and
CMS.
______
Questions Submitted by Hon. John Thune
Question. I'm excited to hear the ways your company has harnessed
technology and data analytics to provide consumers with transparent
information about their Medicare benefits. Medicare Advantage provides
consumers with options to choose a plan that works best for their
health-care needs.
In your testimony, you mention that Medicare Plan Finder currently
lacks sufficient data to provide transparent information on the
differences between plans. In your experience, how can this exchange of
data from plans to CMS be improved? How have companies like yours
addressed this problem?
Answer. At Chapter, we integrate data from many sources to build a
more complete picture of a Medicare plan. We ingest data from
Medicare.gov and other government sites, as well as from insurance
carriers and private data providers. We ingest data from multiple
sources because there is no single source that has all of the data
required to make a comprehensive or consumer-first Medicare plan
recommendation. We also provide longitudinal support to ensure a
positive beneficiary experience that allows us to support the user over
time.
We would recommend that CMS provide more data via API to third
parties. While Medicare.gov does provide significant data to third
parties, it does not provide information on provider networks or retail
prices at pharmacies. This means that if Chapter relied only on
Medicare.gov's data alone, we would not have access to provider network
or prescription pricing data--two of the most critical inputs into plan
selection.
Furthermore, insurance carriers should share provider network data
with CMS and with the public. Insurance carriers should also share
structured data on plan benefits and how to use them with CMS and with
the public.
______
Prepared Statement of Hon. Mike Crapo,
a U.S. Senator From Idaho
This hearing comes at a crucial time, as millions of Americans
evaluate Medicare coverage options during the annual open enrollment
period. During this window, seniors and many Americans with
disabilities have the opportunity to select a Medicare Advantage, or
``MA,'' plan that best fits their needs.
I have long championed MA for its success in leveraging market-
driven competition to offer patients access to a wide range of cost-
effective coverage choices. The vast majority of MA plans cover
services not available under traditional Medicare, including for
dental, vision, and hearing health needs.
With consistently high satisfaction rates and low premiums, MA's
market dynamism serves as its strength, not its weakness.
That said, the complexity of the health-care system poses
significant challenges for Americans from all walks of life, including
those enrolled in MA plans. Seniors need clear, credible, and accurate
information to navigate the coverage and service landscape.
Fortunately, a variety of resources and tools can help guide Medicare
beneficiaries through the decision-making processes this opaque system
requires.
However, the Federal Government's Medicare Plan Finder, a decision-
support tool outlining coverage choices, can prove cumbersome and
confusing, often displaying out-of-date or otherwise inaccurate data.
As we consider options to ease enrollment, we should assess solutions
that improve Plan Finder by integrating more relevant information and
enabling more user-friendly navigation.
Furthermore, we should examine opportunities to empower effective
insurance brokers, who serve as key community-based resources and
access points, including in the context of MA plan enrollment. Through
common-sense patient protections and targeted transparency, we can
promote a vibrant and competitive broker landscape, assisting seniors
while preventing deceptive marketing and other problematic practices.
Practical guard rails, however, cannot come at the expense of
patient privacy or a functional marketplace. With all policies under
review, we have an obligation to consider both confidentiality concerns
and administrative burden.
I look forward to hearing thoughtful ideas about how to improve the
enrollment process by better aligning incentives and increasing
transparency. With common-sense, consensus-driven and market-based
solutions, we can ensure broad access for seniors to all of the tools
needed to make crucial, informed coverage decisions.
______
Prepared Statement of Krista Hoglund, A.S.A., MAAA,
Chief Executive Officer, Security Health Plan
Chairman Wyden, Ranking Member Crapo, members of the committee, it
is my honor to be here today to represent Security Health Plan and our
clinical partners at the Marshfield Clinic Health System to discuss
Medicare Advantage (MA). Today, more than half of eligible seniors
across the country receive their Medicare coverage through an MA plan.
By 2030, the Congressional Budget Office estimates that more than 6 in
10 seniors will choose MA. Creating a well-functioning MA program that
empowers beneficiaries to select a plan that meets their needs while
protecting against misleading and aggressive enrollment practices, as
well as unscrupulous marketing tactics, is crucial to the long-term
success and sustainability of the program.
While work by this committee has helped improve marketing
practices, more work remains. Today, creative new payments flowing
through independent third-party entities are adding unnecessary costs
and fueling misleading marketing practices in the MA market. At a time
when the solvency of the Medicare trust fund is paramount, I urge
Congress and the Centers for Medicare and Medicaid Services (CMS) to
protect enrollees and taxpayers with reasonable limits on total
compensation and stop misleading and aggressive enrollment practices.
background
Headquartered in central Wisconsin and serving 225,000 members
across Wisconsin, Security Health Plan is the fifth largest health plan
by membership and sixth largest by premium volume in Wisconsin.
Security Health Plan is a not-for-profit health plan with group
commercial coverage for large and small employers, individuals, and
families through the federally facilitated marketplace, Medicare and
Medicaid beneficiaries, plus benefit administration for self-funded
employers.
Security Health Plan was founded over 50 years ago as one of the
first physician-sponsored health maintenance organizations in the
country. The goal of the organization then was to offer high-quality,
affordable health coverage for the communities we serve. This mission
has not changed. We are pleased to continue this legacy of serving the
communities we call home. Security Health Plan has routinely been
recognized as a quality leader, earning four stars or above from the
Centers for Medicare and Medicaid Services (CMS) for our MA program, as
well as recognition for superior customer service and enrollee
satisfaction.
We are part of the Marshfield Clinic Health System, an integrated
health system serving Wisconsin and northern Michigan. Our 1,400
providers deliver care for 3.5 million patient encounters each year
across our eleven hospitals (including 3 critical access hospitals) and
over sixty ambulatory clinical sites in over 40 communities. Half of
the ambulatory facilities are in communities of less than 4,000 people.
Marshfield Clinic Health System is one of the largest fully integrated
health systems serving residents from locations in rural communities.
The system's primary service area encompasses over 80 percent of the
rural population of the State of Wisconsin. We are the largest provider
of primary and specialty care in our region including services provided
to children through our very own Marshfield Children's Hospital.
Marshfield Clinic Health System is also a teaching health system,
providing over 1,300 students with over 2,300 educational experiences
annually throughout our system. The Marshfield Clinic Research
Institute is the largest privately funded research entity in the State
of Wisconsin.
I have had the pleasure of serving as the CEO of Security Health
Plan for the last 2 years. Prior to my role, I served as the chief
financial officer and chief actuary at Security. With nearly 20 years
of actuarial experience, I am perhaps the rare CEO with firsthand
experience developing MA products, Part D plans, and many other benefit
offerings. In addition to my CEO role, I also serve on the executive
committee of the board of directors of the Alliance of Community Health
Plans (ACHP), the only national group representing nonprofit, provider-
aligned, regional health plans. As a result, I have a multifaceted
understanding of the MA program, its competitive landscape, and the
needs of the enrollees served by the program.
serving rural wisconsin
A vast majority of Security Health Plan's service area comprises
the most rural areas of Wisconsin. Research has shown that residents of
rural communities are older, sicker, and poorer than their urban and
suburban contemporaries.\1\ They are also more likely to face chronic
conditions, and social factors that negatively impact their health.\2\
In Wisconsin, our demographics are shifting significantly; in over ten
counties we serve there are less than two workers for every Medicare
beneficiary.\3\
---------------------------------------------------------------------------
\1\ Centers for Disease Control and Prevention, Rural Health,
https://www.cdc.gov/ruralhealth/about.html. Updated May 9, 2023.
\2\ Ibid.
\3\ Bureau of Labor Statistics, county employed as of July 2022.
Medicare data source: Centers for Medicare and Medicaid Services,
Medicare county enrollment as of July 2022.
As a provider-sponsored health plan, Security Health Plan is
committed to working with our clinical partners to create a true system
of care. This allows us to deliver the best care for members and
maximizes the value of the health-care dollar. For Federal programs
such as MA, that means lower costs to the taxpayer and senior.
medicare advantage
MA is the choice of America's seniors--nearly 32 million and
counting. CMS projects that MA enrollment will reach nearly 34 million
in 2024. In 22 States--and growing--a majority of Medicare-eligible
seniors are enrolled in the managed care alternative to traditional
fee-for-service Medicare. Most beneficiaries enjoy access to zero-
dollar premium plans with prescription drug coverage and other
additional benefits included.
MA serves a diverse population, including a majority of Hispanic,
Black, and Asian American seniors. Without sacrificing quality, MA
enrollees spend almost $1,600 less a year on out-of-pocket costs
compared to those enrolled in traditional Medicare. Most MA
beneficiaries also pay no premium. With consistently high quality
ratings, expanded benefits, and a record of reaching minority
populations, this public-private partnership is an undeniable success.
Security Health Plan has offered MA for 2-plus decades, proudly
serving more than 60,000 beneficiaries today across central, western
and northern Wisconsin. Our MA offerings provide beneficiaries a wealth
of choices from $0 premium plan options to benefit-rich, minimal out-
of-pocket cost plans and a dual-eligible Special Needs Plan.
However, in recent years, enrollment growth has not been evenly
distributed across the MA market. For example, in the most recent
Medicare open enrollment period, two-thirds of the Nation's enrollment
went to just two national companies. More than 80 percent of total MA
enrollment went to for-profit companies. It is imperative to support
broad participation by plans to ensure a thriving MA program. This
leads to more consumer options, program innovation by plans, and better
stewardship of Medicare dollars.
In the last 2 years, Security Health Plan has experienced double
the historical average attrition, after sustaining retention rates of
over 95 percent for the previous decade. Coupled with declining net
growth in the MA market among smaller plans, this clearly signals a
shift in the environment.
Unfortunately, nearly 100 percent of these members are moving to
competitors who have higher administrative costs. This equates to
higher rates for the Medicare trust fund and more costs for seniors.
Worst of all, members are not always getting the coverage that they
deserve or that would be most beneficial to them. We must ask ourselves
whether this trajectory is in the best interest of Medicare
beneficiaries and the Medicare program overall.
medicare advantage marketing--protecting seniors and the federal dollar
As MA grows in popularity, it is vital to ensure that beneficiaries
receive comprehensive and accurate advice throughout the selection and
enrollment process. At Security Health Plan, our priority is to assist
beneficiaries in selecting a plan option that best fits their needs and
budget--even if that means referring them to another company. Each year
we engage beneficiaries in our local communities with educational and
product seminars and online webinars.
We continue to be very supportive of the marketing changes made by
CMS and appreciate the Senate Finance Committee's MA marketing
investigation and report which propelled action last year. It has
started to make a difference, but it must be acknowledged that we still
have a lot of work to be do.
According to recent research by the Commonwealth Fund, seniors are
inundated with information about MA, and marketing materials attempting
to influence their decision. The study found nearly all people aged 65
and older said they received some plan marketing last year, with three-
quarters seeing one or more television or online ads per day. One in
three reported receiving seven or more phone calls per week even though
cold calling is prohibited by CMS marketing guidelines.\4\ During
Medicare open enrollment, it is difficult to turn on a television and
not see a MA ad. For all the progress we have made, challenges still
exist. Just last week, in a conversation with a trusted broker partner,
he described the ambush that has already begun with his clients
receiving as many as five phone calls per day. Clients are overwhelmed
with the promise of false benefits so much that his team is barely even
able to keep up with the confusion and questions, let alone seek and
support new enrollment.
---------------------------------------------------------------------------
\4\ ``The Private Plan Pitch: Seniors' Experiences with Medicare
Marketing and Advertising.'' The Commonwealth Fund, Issue Brief,
September 12, 2023.
---------------------------------------------------------------------------
brokers and field marketing organizations
The task of educating current and potential MA beneficiaries about
their options cannot be accomplished by one entity. CMS plays a crucial
role in educating beneficiaries about their options. And, from our own
market research, we know recommendations from friends and family also
play a large role in the decision-making process However, the single
most influential perspective in choosing a MA plan remains advice from
a broker.\5\
---------------------------------------------------------------------------
\5\ Ibid.
Let me be clear, we value the important role that brokers play in
our efforts to educate, sell our products, and support our members.
Brokers are a trusted partner for Security Health Plan, and health
plans across the country. In fact, 85 percent of our MA enrollment at
Security Health Plan comes from more than 500 brokers across our
service region that we are proud to partner with. Unfortunately, we
know that some large firms and third-party marketing organizations
leverage their influence for financial gain rather than what may be in
---------------------------------------------------------------------------
best interest of the consumer.
The explosion of large field marketing organizations in recent
years has created a compensation structure that makes it more difficult
for smaller, regional plans and their local independent agent partners,
to compete. Many of these field marketing organizations receive ``add-
on'' or incentive payments that go above and beyond the CMS-approved
broker commission caps. Instead of collecting the maximum commission of
$611 for a new enrollee, many brokers are collecting $1,300 or more.
This additional compensation is marked as marketing or administrative
dollars and can also include incentives for members completing a health
risk assessment or vague application of referral bonuses.
There have also been reports of large carriers financing service
expansion into new territories with the expectation of the brokers
supporting preferred plans. This creates an environment in which
beneficiaries, and ultimately the Medicare program itself, are paying
out additional and unnecessary dollars.
Colleagues from across the country have shared anecdotes of large
carriers and third-party marketing organizations implementing quotas or
exclusivity for enrollment and threatening to terminate contracts if
targets are not met. This may explain the incentive for such aggressive
sales tactics.
These dynamics result in real-world consequences. Just last week,
an MA member called our plan to complain that an agent falsely
representing Security Health Plan was cold calling her to market
another plan. In a previous Medicare open enrollment period, our team
assisted a member who was tricked into enrolling in another plan. We
worked with the member to re-enroll with Security Health Plan not once,
but four times during that single open enrollment period.
what does this all mean?
The result of these and other practices is that consumer's options
can be unfairly and unnecessarily skewed because of perverse incentives
when it comes time for a consumer to select an MA plan. The current
structure creates an unlevel playing field. The ability of smaller,
regional health plans like Security Health Plan, to compete against
larger, national carriers is drastically impacted. Less plan choice and
less competition will not serve our beneficiaries well. Less
competition between MA plans will mean less pressure to keep costs low,
less innovation and less incentive to add additional benefits. This is
a disservice to beneficiaries and taxpayers.
In competitive markets like ours, the current structure not only
limits our ability to be successful, but it also runs counter to our
long-standing commitment to be a good steward of the Medicare dollar.
We have been forced to make tough decisions between adding extra
benefits for seniors and lowering costs or increasing our
administrative budget to keep pace with national competitors in order
to retain and grow enrollment. This is a position no health plan should
be in. Our goal should be to limit administrative expenses, maintaining
our primary focus on designing well-rounded benefits that support the
health and well-being of our members.
what can be done
Medicare enrollees deserve a robust and competitive insurance
marketplace, where competition between plans benefits them, as well as
the overall program. Unfortunately, trends in the market point toward a
more difficult operating environment for smaller, regional health
plans. The consequences of this will be decreased MA offerings for
beneficiaries, and likely higher costs for seniors, and the Federal
Government.
I urge you to engage with CMS to review the practice of add-on
payments to ensure that competitively unfair practices are inhibited,
especially total payments above and beyond the CMS approved levels.
Further, CMS and regulators must remain vigilant in enforcing marketing
rules that protect seniors from misleading and aggressive marketing
tactics. Brokers must be compensated fairly, while removing misaligned
incentives for large third-party organizations. Limiting or capping
these payments would protect the integrity of the Medicare program and
its beneficiaries as well as make great strides in restoring the
competitive balance among Medicare Advantage plans.
As a board member of ACHP, I endorse the organization's MA for
Tomorrow initiative. MA for Tomorrow includes specific proposals to
safeguard beneficiaries and ensure an unbiased enrollment process by
regulating the total compensation health plans may pay to brokers.
Valuing the essential role brokers offer in helping seniors understand
the coverage options available and to find the health plan best suited
to their needs, ACHP offered three immediate changes to ensure brokers
remain sufficiently compensated for assisting beneficiaries while
ensuring health plans appropriately utilize Medicare dollars to compete
for enrollment based on quality and care.
1. Standardize and limit the add on payments tied to broker
compensation. Curbing the growth of broker add on payments
would address misaligned incentives. CMS has the authority to
build on compensation standards to protect the integrity of the
Medicare dollar by limiting total broker payment and preventing
steering based on broker compensation.
2. Create incentives for enrolling beneficiaries in high-
quality and value-based plans. Brokers should be rewarded if
they match a senior with a health plan that is high quality
(star rating of 4 or higher) and advances value-based care.
3. Require plans to report total broker compensation.
Consistent and annual reporting would shed light on an issue
that currently has little to no data. Transparency on how much
of a health plan's marketing dollars go to brokers (not just
the commission) is an essential step toward evaluating the MA
broker market.
conclusion
Chairman Wyden, Ranking Member Crapo, members of the committee,
again I am honored to be here today advocating on behalf of Security
Health Plan, other health plans, and most importantly MA beneficiaries.
MA is a vital and popular program enriching the lives of seniors across
our Nation. Continuing to support its evolution to meet the needs of
beneficiaries is crucial. Creating a well-functioning MA program that
protects beneficiaries and supports them in making well-informed
decisions is crucial to the long-term success and sustainability.
I thank you for your time this morning and welcome the opportunity
to answer your questions.
______
Questions Submitted for the Record to Krista Hoglund, A.S.A., MAAA
Questions Submitted by Hon. Sherrod Brown
Question. I am very concerned about the impact that current
Medicare Advantage marketing and enrollment practices have on patients
who live in areas without many options for providers and experience
high costs in affording their health care.
In Ohio, more than half of all Medicare beneficiaries choose to
enroll in a Medicare Advantage plan--but many do so without knowing
that the area where they live may have limited options for in-network
providers.
You mentioned in your testimony that nearly two-thirds of
enrollment in Medicare Advantage went to two national companies.
Can you elaborate how this impacts people living in underserved
areas, particularly rural ones?
Answer. First, it is important to recognize what you mentioned,
that Medicare Advantage is a very popular and effective coverage option
for individuals in underserved areas, including rural areas. In the
past, there has been a strong misconception that MA was only viable for
enrollees in more populous areas. The fact is, the vast majority of
eligible individuals have access to plans that can meet their needs, no
matter where they live.
Market concentration in MA growth, especially in recent years, has
primarily impacted enrollees by creating situations where larger MA
organizations theoretically use their market influence to force
contract concessions by providers in their service areas. This can
affect rural areas different than other service areas because of the
limited access to care for residents. Care providers can be forced to
accept disadvantageous contract terms, or exclude MA plans altogether.
Both of these circumstances harm patients and their ability to access
the care they need in the most appropriate and convenient setting.
Concurrently, it can limit their ability to choose programs like MA in
the first place, limiting their ability to benefit from the program's
track record of helping enrollees maintain their health and well-being.
This all results in a less competitive marketplace. Plans have less
incentive to control costs, or be strategic in pricing their products.
This means less innovation and creativity in building impactful and
effective plans that responsibly control Federal Medicare spending.
This also means that plans may have less incentive to expand their
service area. In fact, these circumstances may force plans to make the
difficult decision to reduce their offerings in certain regions.
Altogether, this means less options and less competition in the MA
market.
Question. Part of the information overload that so many older
Americans experience when trying to enroll in a health plan is a result
of deceptive marketing from private insurance companies.
Around this time of year, older Americans are inundated with
advertisements, phone calls, and mail regarding Medicare enrollment.
CMS has reported that complaints related to marketing for Medicare
Advantage plans--run by private insurance companies--more than doubled
in 1 year, from less than 16,000 in 2020 to nearly 40,000 in 2021.
And many plan directories list inaccurate information about
providers--further complicating the process.
In an investigation led by Chairman Wyden last year, this committee
found two Medicare Advantage plans in Ohio where 75 percent of the
providers listed as in network were inaccurate or unavailable. This is
unacceptable.
What can Congress do to continue to improve the oversight of these
harmful marketing practices?
Answer. MA enrollees need to be guaranteed that they can access
care in a reasonable time frame when they need it, and close as
practical to their homes. That being said, overly prescriptive or
arbitrary time and distance standards can sometimes be onerous. They
create undue burden on MA sponsors that dilute our ability to construct
provider networks that effectively and responsibly balance patient
access with cost controls that in the end benefit enrollees and the
program's finances overall.
The issue of ghost networks that you speak of are a disservice to
the MA program, and to the enrollees in the program. I know that
Security Health Plan, and many other plans, commit significant
resources to construct thoughtful networks that meet the needs of our
patients. However, even under the best of circumstances, it can be
difficult for health plans to maintain perfect records of providers
available as providers change location, retire or change their
offerings. Offering misleading information to induce an individual to
enroll in a particular plan is wrong. Consumers should have faith that
the information they are relying on will be as factual as possible.
Unfortunately, they often discover the truth in the worst possible way,
at the worst possible time. I appreciate the work that the committee
has done on this topic to date and urge you to continue to remain
vigilant on this issue moving forward.
Collectively, we must do more to ensure that enrollees have a
complete picture of the network that they are engaging with. At the
same time, I urge you to recognize that health plans can only do so
much in regard to maintaining good data. We invest significant
resources and energy to do all that we can to have as current of
provider directories as possible, but we are at the whim of data that
providers offer. Any further regulation of provider directories should
have specific considerations related to intent of any discrepancies or
omissions that may be identified through audits or investigations, and
have mechanisms to determine which party is most responsible for these
omissions/errors.
______
Question Submitted Hon. John Thune
Question. In your testimony you discuss how Security Health Plan
has prioritized lowering administrative costs. For several years I've
led legislation with Senator Brown--the Seniors Timely Access to Care
Act--that seeks to streamline the prior authorization process and
address the administrative burden prior authorization can have on
physicians in Medicare Advantage. I believe improving the transparency
of prior authorization can bring efficiencies to the health-care system
that will ultimately reduce cost and improve access to care.
Where do you see opportunities within your prior authorization
process to reduce administrative burden and reduce costs for Medicare
beneficiaries?
Answer. Security Health Plan uses prior authorization as an
important tool to ensure members receive evidence-based care, at the
right time and in the right setting. When functioning optimally,
utilization management helps to not only ensure the safety of members,
but also helps to keep premium costs affordable by avoiding unnecessary
or inappropriate care.
Opportunities exist in the form of removing barriers in
communication between providers and the health plan and looking for new
ways to ensure that members are getting evidence-based care that meets
their needs while not adding to their out-of-pocket costs for health
care. This is an area which integrated system plans like Security
Health Plan are uniquely positioned to innovate and find ways to
streamline processes. Our connection with our clinical partners allows
for easier data exchange, and quality control for recurring errors that
may occur. The most common reason for delays in the processing and
appeals of initial findings is incomplete data.
The emergence of new technologies offer exciting opportunities to
streamline prior authorization even more than today. Systems are being
developed and tested where artificial intelligence can be use
responsibly to conduct preliminary analyses that are then reviewed and
either affirmed or rejected by a clinician. These efficiencies expand
that ability of staff to give more attention to complex situations, as
well as instances where more information is necessary. Security Health
Plan has found success in removing authorizations that are no longer
providing value because providers are following the evidence-based
guidelines whenever possible. Leveraging analytics we can facilitate
faster turnaround for those providers with proven track records, and
also create objective standards for providers to understand the steps
they need to take to achieve this higher-level approval.
______
Questions Submitted by Hon. Maria Cantwell
Question. A Washington State constituent worked with a broker when
picking his Medicare plan, and that broker omitted critical information
that would have helped my constituent make an informed decision about
his coverage. The broker told him about various benefits of Medicare
Advantage, like lower premiums, but did not disclose the downsides of
Medicare Advantage such as limited networks. My constituent also did
not know that the broker was being paid more to enroll people in
Medicare Advantage plans than traditional Medicare.
In the end, my constituent trusted that the broker was sharing the
whole truth with him and signed up for the Medicare Advantage plan. The
broker got his higher commission, but my constituent was surprised when
he faced burdensome prior authorization requirements and limited
provider options because of his Medicare Advantage plan.
This problem is not limited to constituents in Washington State.
Research conducted by the Commonwealth Fund confirmed that brokers
and agents are indeed paid more to enroll people in Medicare Advantage
plans than traditional Medicare. In fact, one broker said they were
paid three times more for selling a Medicare Advantage plan. These
incentives are clearly misaligned. People should be making coverage
decisions based on their health-care needs, not the sparse information
brokers decide to share with them--especially when brokers are
financially incentivized to enroll people in Medicare Advantage plans.
The Centers for Medicare and Medicaid Services has a $611 payment
limit per enrollee for brokers enrolling new beneficiaries, but
companies are not being transparent about opaque fees they pay their
brokers to circumvent the rules. Research found that brokers can earn
over $1,300 per consumer who enrolls in a Medicare Advantage plan.
Should there be more transparency in how much brokers are actually
receiving in additional payments?
Should plans be required to publicize how much they pay their
brokers?
Answer. Yes, there should be more transparency about how much
payment brokers receive for each enrollment, that is both commission
and the additional payments outlined in my prepared testimony. Not only
is transparency needed, but I urge the committee to support efforts by
CMS to cap overall broker compensation through regulatory action.
I am sorry to hear about the experience of your constituent and am
frustrated by the fact that I know he is far from alone in this
predicament. That being said, I do not want to lose sight of the vast
majority of brokers that are critical partners to my organization and
organizations across the country. Broker colleagues are trusted
partners in educating and engaging with enrollees.
The best course of action is to eliminate the incentive to utilize
field marketing organizations, third-party marketing organizations and
inappropriate marketing practices that harm seniors and unfairly skew
the market. A functioning market will ensure sufficient competition
between a number of plans that will benefit enrollees, as well as
incentivize innovation among plans to expand benefits while keeping
costs low for individuals and the Federal Government on a macro level.
Question. According to the Commonwealth Fund, one in three Medicare
beneficiaries use an insurance broker to help them pick a plan.
Is there enough regulatory oversight over how much these brokers
are paid?
Answer. The short answer is no. CMS has long established the
maximum commission a broker can receive for a new enrollment, or a
reenrollment in the same plan. However, in recent years, we have seen a
number of creative payments that seek to circumvent these regulatorily
established limits. The result is that the marketplace is skewed in
favor of the organizations that are able to pay brokers more for
enrollments. This reduces market participation and competition,
especially among smaller regional plans like my organization.
What we need is a cap on overall broker compensation that goes
beyond the commission payments. This would create a more equal playing
field for all sizes of plans. This would result in greater options for
consumers, and a reduction in the costs to the Medicare program.
Question. Long wait times for prior authorization approvals delay
necessary care for patients, which often leads to worse health
outcomes.
The Improving Seniors' Timely Access to Care Act, which I support,
will increase transparency and standardize the prior authorization
process in Medicare Advantage to help ensure that care is not
needlessly delayed.
I support the administration's efforts to adopt many of the
provisions of that bill, and I urge the committee to continue to pursue
policies to ensure that MA plans are not throwing up unnecessary
barriers to care.
What are your internal processes and timelines for prior
authorization approvals, and do you think that greater guard rails
around prior authorizations in MA plans would be helpful for smaller
plans like yours to fairly compete?
Answer. Security Health Plan makes utilization management decisions
of pharmaceutical, medical and behavioral health benefits in a timely
manner to accommodate the clinical urgency of the situation and to
minimize any disruption in the provision of health care. Maximum time
frames are defined by CMS and must be followed by all MA plans.
However, we strive to make decisions as soon as possible, taking into
account the clinical urgency of the member's situation.
Effective utilization management in any insurance program should
use the best available information, data and clinical guidelines to
make decisions that are in the best interests of patients and their
well-being. Innovation in this space is moving at a rapid pace. The
integration of new tools and technologies in a responsible and ethical
manner are crucial to supporting a functioning system. As new
technologies become operational, I would urge regulators to ensure
oversight that is thoughtful and geared toward protecting patients.
Steps should be taken to guard against bias and unfair processes in new
technologies like artificial intelligence. Further, access to new tools
and technologies should not be unfairly limited. New technologies and
innovations will also require significant investment that will need to
be addressed to ensure that some actors are not unfairly advantaged to
the detriment of competition in the market and the enrollees that rely
on a variety of types of plans.
______
Prepared Statement of Christina Reeg, Ohio Senior Health Insurance
Information Program Director, Ohio Department of Insurance
Good morning, Chairman Wyden, Ranking Member Crapo, and members of
the committee. Thank you for the opportunity to appear before you today
to share the State of Ohio's work to ensure Ohioans receive factual and
unbiased information to make decisions regarding their health and
prescription drug coverage.
My name is Christina Reeg, and it is an honor to appear before you.
I am the Program Director for the Ohio Senior Health Insurance
Information Program (OSHIIP) at the Ohio Department of Insurance.
OSHIIP is one of 54 Federal grant programs providing objective
counseling and education to Medicare patients, their families, and
their caregivers. SHIPs provide factual and unbiased information,
empowering consumers to make educated and individualized decisions
regarding their health and prescription drug coverage. OSHIIP prides
itself on excellent customer service and consumer protection, evident
by our top ratings in all five national performance measures.
Two thousand twenty-three marks my 26th year with OSHIIP, my 11th
year as the director. I began my career traveling to Ohio's 88 counties
(including 29 Appalachian), providing in-person Medicare counseling,
education, and program development--I was literally the ``boots on the
ground.'' I really enjoyed my time as a training officer meeting with
aged and disabled Ohioans to discuss Medicare Part A, Medicare Part B,
and the 10 standardized Medigap plans as needed.
This month our program began counseling Ohio's now 2.5 million
Medicare beneficiaries, to help them make educated decisions for their
2024 coverage. To accomplish this, OSHIIP operates in a hybrid model to
provide education and counseling both in person and virtually.
Additionally, we use social media, paid and earned media, regional
phone banks, and grass-root efforts to promote our services.
The information we present now is vastly different from my early
days with OSHIIP. For example, if we are counseling a beneficiary in
Cleveland, we are reviewing 85 Medicare Advantage Plans, 29 Special
Needs Plans, three Medicare-
Medicaid Plans, 21 stand-alone prescription drug plans, in addition to
original Medicare and Medigap. Most Medicare beneficiaries won't review
or change plans because the task of comparing seems too daunting.
To help narrow the field of choices, OSHIIP uses the Medicare Plan
Finder. This web-based tool helps determine if a Medicare beneficiary's
current prescriptions will be covered, share all possible out-of-pocket
costs, and plan details. Medicare.gov does not provide a network list
for managed care plans, but links to the companies' websites. Plan
websites are often hard for beneficiaries to navigate alone, and lists
may be outdated. We encourage beneficiaries to contact their preferred
providers directly and ask pointed questions. For example, we provide
the beneficiary with specific Medicare advantage plan information
including the contract number and stress the importance of being
specific when communicating with their providers.
Counseling Ohio's low-income and limited-health-literacy Medicare
population brings added challenges. These individuals are more apt to
join a plan based on added benefits, specifically over-the-counter
allowances, or other cash rewards. Also, many are applying for Extra
Help, Medicare's assistance with out-of-pocket drug costs, for the
first time. Delays in that application process, even when automatic,
often lead to affordability issues at the pharmacy window. Finally, the
special enrollment for low-income individuals is often misused placing
consumers into managed care plans more often than the quarterly
allowance. OSHIIP assistance is often reactive when a beneficiary finds
themselves having difficulty receiving needed care or medication.
In my time with OSHIIP, I have witnessed extreme growth. Growth of
the Medicare population, growth within the scope of SHIP work, and
extreme growth in plan options. Our Medicare consumers are overwhelmed
by the volume of options in every county, they are flooded with plan
marketing and often confused by the variance in plan benefits,
networks, and added benefits. The desire to have the advertised
``benefits you are entitled to,'' or the cash benefits for over-the-
counter goods, utilities or other wants masks the need to review
critical plan health benefits, prescription drug coverage, and plan
networks. This often leads to poor enrollment decisions and undesirable
outcomes.
Medicare beneficiaries would benefit from additional oversight. A
personalized Annual Notice of Change (ANOC) would assist beneficiaries
in better identifying plan changes, such as higher premiums and copays,
from year-to-year. Stronger oversight on utilization of special
election periods, such as the low-income subsidy special enrollment
period (LIS SEP), and a block on enrollments for those with cognitive
impairments could minimize improper sales to our most vulnerable
beneficiaries. Reinstatement of measurable differences when approving
plan contracts would help contain the volume of plans in each county.
These actions could make the process of choosing and enrolling in a
Medicare plan less intimidating.
I am happy to answer any questions and remain dedicated to
providing unbiased information and providing the highest level of
consumer protection for Ohio's Medicare beneficiaries.
______
Questions Submitted for the Record to Christina Reeg
Questions Submitted by Hon. Ron Wyden
Question. For 2024, seniors in Tillamook County, OR will no longer
have access to a Medicare Advantage plan. With no other carriers
offering Medicare Advantage plans, my constituents in Tillamook County
who want Part D drug coverage and supplemental health coverage in
addition to Medicare will need to purchase a Medicare supplement and/or
a stand-alone drug plan.
While there is a 60-day special enrollment period (SEP) for those
interested in joining Medigap, after that period seniors no longer have
important enrollment protections such as no underwriting and no waiting
periods for preexisting conditions. For those who have been covered by
an MA plan for over a year, switching to a Medigap plan means Medigap
companies can require medical underwriting after the SEP.
When seniors first choose between Medigap and Medicare Advantage,
what do you think they should know?
Answer. Medicare beneficiaries often confuse Medigap and Medicare
Advantage. It is imperative that beneficiaries, especially those new to
Medicare, have a clear understanding of their Medicare health plan
options and the pros and cons of each option from an unbiased source.
Education for those new to Medicare is critical for making educated and
individualized health and prescription drug plan choices. Medicare
beneficiaries should have a good understanding of the enrollment
periods, costs, coverage, and convenience (networks and other
restrictions) of all options prior to selection. For Medigap, this
should include education on the specifics of each of the standardized
plans, how they pay after (and only after) Medicare Part A and Part B,
comparison of the premiums for each plan sold within their State,
including Medigap Select policies, Medigap open enrollment and
guaranteed issue situations. For Medicare Advantage, this education
should include detailed information about how all plans operate
independent of original Medicare, all possible out-of-pocket costs,
details on how plan contracts change annually, added benefits, open
enrollment, annual Medicare Advantage open enrollment, special election
periods, and a plan comparison for their county.
Question. What else would you suggest Congress consider to make it
easier for MA enrollees like those in Tillamook, who don't have an MA
plan choice, to choose a Medigap plan?
Answer. To make it easier for MA enrollees who do not have an MA
plan choice, it is vital that they understand their guaranteed issue
right to purchase a Medigap policy without underwriting and the
timeframe to do so. While most States follow the Federal guidelines,
some States have more generous protections. As stated above, it's
important for a beneficiary to receive comprehensive, individualized,
and local counseling on all Medigap policies for seamless coverage.
SHIPs can assist by providing detailed information about all Medigap
plans and cost comparisons.
______
Questions Submitted by Hon. Sherrod Brown
Question. While there are a lot of resources out there to help
individuals make decisions regarding their health-care coverage during
open enrollment, sometimes this information overload can be confusing.
OSHIIP has been nationally recognized for the services it provides
to Ohioans when it comes to navigating a cost-free, simple process,
with clear options, so they can choose a Medicare plan that works best
for them.
In your testimony, you mentioned that many Medicare beneficiaries
find the task of comparing plans to be daunting, and that they can be
overwhelmed by the massive number of plan options.
While OSHIIP has been successful in assisting Ohioans throughout
this process, not all State health insurance assistance programs have
the capacity to meet their residents' needs.
What can Congress do to make things easier for beneficiaries
navigating this complex system?
Answer. Medicare beneficiaries could better navigate the complex
system with a reasonable number of options. At a recent roundtable with
insurance commissioners, CMS shared research that showed a correlation
between areas with more than 15 options and poor enrollment decisions
for marketplace enrollees. Ohio's aged and disabled population in the
Cleveland area are currently navigating more than 117 health plan
options during a 6-week period. Medicare beneficiaries would benefit
from CMS requiring measurable differences when approving plan
contracts.
A personalized Annual Notice of Change that reflects how the
changes for the upcoming year will directly impact a beneficiaries
costs, benefits and access to preferred provider networks would make it
easier to navigate their options. Highlighting such information on the
cover or first page would encourage beneficiaries to review and compare
plans annually.
Medicare currently has an internal system for Medicare Advantage
and prescription drugs called MARx. SHIPS used to have access to MARx,
but usage is now restricted. Expansion of MARx to SHIP users would
directly benefit Medicare beneficiaries in the most complex and
critical cases. MARx provides detailed information on current and
future plans to assist beneficiaries that do not know what coverage
they have; provides details on any uncovered time frames allowing SHIPs
to assist with penalties and appeal rights; shows eligibility for
Medicaid and Extra help, allowing SHIPs to assist with Low-Income
Network (LI Net) access for low-income individuals needing critical
medication; provides accurate details for SHIPs to include when filing
complaints directly in Medicare Complaint Tracking System; and allows
SHIPs to help the most vulnerable beneficiaries by providing a clear
and accurate picture of their benefits. For example, OSHIIP assists
beneficiaries that have life-long disabilities and lack family/
caregiver support that reside in group housing. When plans change
annually, these institutions rely on OSHIIP to assist with enrollment
assistance. Our access to MARx is vital to aid the volume of residents,
find appropriate coverage and facilitate enrollments.
Question. I have been working closely with my colleagues, including
Senator Thune of this committee, on the bipartisan, bicameral Improving
Seniors' Timely Access to Care Act.
This legislation will streamline the prior authorization processes
in the Medicare Advantage program, reduce administrative burdens, and
protect older Americans from unnecessary delays in treatment.
It is just one of the many ways we can make Medicare Advantage work
better for Americans.
At our urging, earlier this year, CMS announced a proposed rule
that would accomplish much of what our legislation does.
I am hopeful that the agency finalizes this important rule soon,
and I have encouraged them to do so. But there's more we can do here in
Congress to help protect beneficiaries.
The Improving Seniors' Timely Access to Care Act will help
standardize and streamline the prior authorization process for
routinely approved items and services. From your experience, how does
standardization of prior authorization benefit individuals looking to
enroll in a Medicare Advantage plan?
Answer. In my experience, Medicare beneficiaries do not clearly
understand Medicare Advantage when enrolling. Many, especially low-
income and limited health literacy population, mistake Medicare
Advantage as a ``free'' Medigap policy. They are unaware of the network
restrictions and the need for prior authorization for services. OSHIIPs
assistance is often reactive in these cases helping beneficiaries
navigate the plan rules. Standardization of processes will assist in
counseling, appealing, and advocating for these individuals. The
reduction of administrative burdens, delays in treatment, and
standardization amongst plans may lessen the number of providers
leaving plan networks.
Question. Part of the information overload that so many older
Americans experience when trying to enroll in a health plan is a result
of deceptive marketing from private insurance companies.
Around this time of year, older Americans are inundated with
advertisements, phone calls, and mail regarding Medicare enrollment.
CMS has reported that complaints related to marketing for Medicare
Advantage plans--run by private insurance companies--more than doubled
in 1 year, from less than 16,000 in 2020 to nearly 40,000 in 2021.
And many plan directories list inaccurate information about
providers--further complicating the process.
In an investigation led by Chairman Wyden last year, this committee
found two Medicare Advantage plans in Ohio where 75 percent of the
providers listed as in network were inaccurate or unavailable. This is
unacceptable.
What can Congress do to continue to improve the oversight of these
harmful marketing practices?
Answer. Medicare Advantage plan networks are largely misunderstood
by beneficiaries. Many beneficiaries do not realize that providers may
leave plan networks during the course of the year. When that happens,
beneficiaries are often outside of any plan election periods. It would
be helpful if plan contracts with provider networks followed the same
calendar year as the plans contract with Medicare. If changes to the
network were announced in accordance with all other annual changes,
Medicare beneficiaries may utilize the fall open enrollment to make
wise enrollment decisions.
______
Questions Submitted by Hon. Maria Cantwell
Question. Every year around this time, 65 million seniors and
people with disabilities face a barrage of advertisements asking them
to choose from a complex patchwork of Medicare plans. Since open
enrollment happens only once per year, it is essential that these
people choose the right plan that fits their budget and coverage needs.
However, marketing tactics can range from annoying and misleading to
downright deceptive. Beneficiaries are often not told the whole truth
about their coverage and benefits.
A Washington State constituent told me that she received a call
every single day for a week urging her to enroll in a Medicare
Advantage plan--including calls as early as 6:30 in the morning.
Another constituent was convinced to enroll in a Medicare Advantage
plan over a traditional Medicare plan because Medicare Advantage plans
offer lower premiums and additional covered services including vision,
dental, and hearing.
What he wasn't told was that Medicare Advantage plans require prior
authorization and referrals to see a specialist. He soon discovered a
lump on his earlobe, so his primary care provider submitted a request
to the Medicare Advantage plan for a dermatologist referral. After
several weeks of silence, he followed up with his plan and discovered
that his insurer had subcontracted out the prior authorization process
and his request was lost in the change. He was only able to get the
surgery 7 months after submitting the authorization request. Had he
been on a traditional Medicare plan, he would not have needed a
referral to see a dermatologist in the first place.
For people like my constituent, delays in care can result in deadly
consequences. That is why it is so important that people are well
informed about their choices and able to evaluate the benefits and
drawbacks of the different Medicare plans without getting confused by
persistent, misleading advertising. Last year, private insurers and
brokers ran more than 640,000 commercials on TV alone, but two out of
three seniors still said that they would like to learn more about their
options.
This shows that seniors are aware that they are not getting the
whole truth. We must do more to empower them with the correct
information to make critical decisions about their health insurance.
The Biden administration published a final rule in April this year
that would increase protections against predatory behavior and require
Medicare Advantage plans to have better oversight of marketing
materials from agents and brokers.
Do you think that this rule addresses the heart of the issue
concerning misleading information?
Answer. This rule is a good step in addressing the national issue
of misleading information by Medicare Advantage plans. We will know
more about the effectiveness of this rule in 2024.
Question. Could more be done to increase oversight of Medicare
Advantage plan marketing?
Answer. Yes, many inappropriate enrollments occur when lead
agencies or third-party marketing organizations are involved. These
entities are often out of State, unaware of the local landscapes, and
fail to ask critical enrollment questions.
Question. Do you agree that misleading Medicare Advantage marketing
materials lead to poor health outcomes and additional costs for
beneficiaries?
Answer. Wholeheartedly, yes. Oversight on plan enrollments,
specifically the special election periods, would help protect
beneficiaries from poor enrollment decisions. OSHIIP is currently
assisting a gentleman that saw a TV commercial in May advertising
``Free Medicare'' and ``Entitled Benefits!'' He called the number on
the ad and was enrolled into a Medicare Advantage product outside of
any special enrollment period. The agent told this gentleman that he
would no longer have to pay for anything else, and to stop paying any
other Medicare premiums and cancel all other coverage. The gentleman
was responsible for both a Part A and Part B premium, a Medigap
premium, and a Part D premium, all of which were reimbursed by his
retirement health reimbursement account (HRA). When he followed the
direction of this agent and stopped paying all premiums, he was
disenrolled from his HRA, Medicare A and B, his Medigap, his Part D
plan and subsequently this new Medicare Advantage plan. He was left
with no health or drug coverage and is out of needed medications. If
that improper Medicare Advantage plan enrollment had been reviewed in
May, this retiree would have full coverage all paid for under his
health reimbursement account. OSHIIP assists too many in similar
situations after enrolling in plans based on misleading advertisements.
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
This morning the Finance Committee gathers to discuss an emerging
trend in Medicare Advantage: marketing middlemen.
There is a long history of rip-off artists in the private sector
trying to take advantage of seniors who depend on their flagship health
program, Medicare. Since I served as the director of the Oregon Gray
Panthers, something like a year or 2 ago, these unethical salespeople
would often sell seniors 10 to 15 separate, unnecessary Medigap
policies that weren't worth the paper they were written on. Senators
Daschle, Heinz, Dole, and I came in and drained that swamp.
The same thing happened at the start of Medicare Advantage. In this
committee, Chairman Baucus held a hearing on Medicare marketing because
scammers were going door-to-door while wearing white coats and
stethoscopes around their necks to enroll seniors into these new plans.
We got some protections then, but it still hasn't been enough.
Last fall, I released a report that detailed some of the most
egregious marketing practices that I've seen in Medicare Advantage--
like vans parked outside senior centers with ``MEDICARE'' splashed
across the side and mailers designed to look like IRS documents. Many
members of this committee joined Senator Casey and I in calling on CMS
to make changes to protect beneficiaries from these slimy tactics, and
CMS delivered. Just yesterday it was reported that CMS rejected more
than 300 ads because they were so deceptive and misleading.
At this time, it's not possible to take any victory laps. As
seniors experience Medicare's annual open enrollment--which started 72
hours ago--our investigators have found marketing middlemen are the
latest sleazy set of private-sector scoundrels targeting seniors on
Medicare Advantage. These bad actors are gearing up for this new
enrollment period.
So, who are these marketing middlemen, and why are they so
prevalent in Medicare Advantage?
They are big, private marketing companies in the middle between
seniors and their coverage. These big marketing companies are jumping
to get in front of seniors during annual open enrollment. These
middlemen hijack personal information from as many seniors as possible
and then they funnel this personal information to the health insurance
plans that pay these sleazy marketers the most. Basically, it's
``profit for us first, help for seniors and taxpayers last.''
Sometimes seniors' information gets passed multiple times from one
money grubbing hand to another. The marketers will sell seniors' data
once. If they can, they'll sell it twice. If they can, they'll sell it
as many times as possible. The wheel of deceit goes round and round.
And seniors are the ones left getting badgered by phone, targeted on
the Internet, stuck with mountains of mail--and ultimately, a plan that
might not be the right fit for their health needs.
To sum it up: these marketing middlemen have made seniors their
product, and they are trying to sell as much as they can.
And what's more, it's your taxpayer dollars that are lining these
middlemen's pockets. In fact, insurance experts have estimated that
marketing cost taxpayers at least $6 billion in 2022 alone. Let that
sink in, folks. Six billion taxpayer dollars went to marketing
middlemen who may have sold your elderly parents, grandparents, and
neighbors the wrong plan.
It's a rip-off, and it's got to stop. And that's why I have my
investigators launching an inquiry into these slimy practices.
I want to share one last thought on strengthening the Medicare
Advantage program--we've got to stamp out ghost networks. In May, our
investigators looked at a cross section of mental health plans across
America. They contacted these plans' providers and asked if they could
get an appointment for a member. They could only get an appointment 18
percent of the time. Even if a senior can make an appointment with a
provider, they may be exposed to extra costs if the provider is out of
network.
Knowing if your doctor is in network is an essential piece of
information when you enroll in a plan and when you are looking for
health care. That's why I joined Senators Bennet and Tillis in
introducing the REAL Health Providers Act to make sure provider
directories in Medicare Advantage are up to date and accurate. This is
something we should all be able to get behind.
In closing, I want to explain that this is part of an effort in
this committee to reduce middlemen from health care. We spend $4
trillion a year on health care, and sleazy middlemen need to be rooted
out. We've already begun with PBMs.
I want to thank our witnesses for testifying today at this Finance
Committee hearing. I look forward to our discussion.
______
Communications
----------
AARP
For further information contact:
Brendan Rose
Health Access and Affordability
Government Affairs
[email protected]
AARP, which advocates for the more than 100 million Americans age 50
and older, appreciates the Senate Committee on Finance's effort to
examine deceptive marketing practices of Medicare Advantage (MA) plans
during Medicare Open Enrollment and how to improve the overall consumer
experience of enrollment in a Medicare Advantage plan.
With enrollment in MA plans eclipsing that in traditional Medicare, it
is increasingly important for Congress to ensure that beneficiaries are
adequately served in both MA and traditional Medicare in terms of
costs, benefits, quality of care, and patient outcomes. AARP has long
supported efforts to improve the quality and affordability of all
Medicare plans while working to ensure that consumers maintain a robust
choice of both MA and traditional Medicare options.
Plan marketing directly affects the consumer experience and ability to
make informed choices in enrollment. In many cases, deceptive marketing
practices have led individuals to enroll in a plan that does meet their
needs. AARP has repeatedly raised concerns about marketing abuses
around MA plans and advocated for greater oversight, enforcement, and
regulation of marketing materials and marketing standards for MA plans.
We were pleased that the Administration has finalized regulations aimed
at strengthening consumer protections from deceptive and abusive
marketing practices, including a prohibition on the use of the Medicare
name, logo and Medicare card in advertising, and a prohibition on the
marketing of supplemental benefits in a service area where those
benefits are not available. Beyond the insurance carriers that offer MA
plans, we also supported \1\ new requirements on how agents, brokers,
and third-party marketing organizations can engage with prospective
enrollees, such as the requirement that they disclose when they do not
contract with all carriers offering plans in a given service area.
Perhaps most importantly, agents and brokers are now required to
explain to consumers the effect of a Medicare coverage option or plan
choice prior to enrollment. This is especially important because a
voluntary choice to leave an MA plan and return to traditional Medicare
may expose consumers to medical underwriting--and subsequent higher
premium costs--if they attempt to enroll in a Medicare supplement
policy (Medigap).
---------------------------------------------------------------------------
\1\ https://www.aarp.org/content/dam/aarp/politics/advocacy/2023/
02/final-aarp-2024-ma-part-d-comment-21323.pdf.
Although the new rules discussed above are a significant step in the
right direction, both Congress and the Administration must do more to
ensure that MA marketing efforts are not misleading or harmful to
consumers. The new guidelines will only help consumers if they are
followed. Effective monitoring and enforcement mechanisms must be
developed so that the appropriate federal agencies are empowered to use
their authority to hold insurers and other entities accountable for
inappropriate marketing of their plans. Coordination between the
federal government--which regulates MA plan--and state governments--
which regulate agents, brokers, and receive the bulk of Medicare-
related marketing complaints--is critical to ensure adherence to
---------------------------------------------------------------------------
marketing guidelines.
Despite the progress made by these new consumer protections, additional
policy improvements continue to be needed. For example, improved
transparency about agent, broker, and third-party organizations'
compensation and financial incentives could help better inform consumer
decision making. Also critical is equipping consumers with clearer
information about available options to lodge a complaint about
problematic marketing practices. In addition, given widespread
confusion among consumers evaluating their Medicare coverage options,
increasing access to unbiased sources of information--including through
greater promotion of and funding for State Health Insurance Assistance
Programs--is essential to helping consumers navigate Medicare marketing
information.\2\
---------------------------------------------------------------------------
\2\ https://blog.aarp.org/thinking-policy/new-medicare-advantage-
marketing-and-sales-rules-will-help-better-protect-consumers.
As enrollment in MA continues to outpace traditional Medicare,
increased vigilance to protect consumers from troubling marketing
practices will become even more important to help ensure that older
adults are best equipped to make informed decisions about the coverage
---------------------------------------------------------------------------
that will best meet their needs.
Thank you for the opportunity to provide AARP's perspective on
deceptive marketing practices in MA and steps to protect consumers. We
look forward to working with you to address this important issue and
improve the experience of Medicare enrollment for older Americans.
______
American College of Physicians
25 Massachusetts Avenue, NW, Suite 700
Washington, DC 20001-7401
202-261-4500
800-338-2746
www.acponline.org
On behalf of the American College of Physicians (ACP), we are grateful
for this opportunity to share our views regarding the recent Senate
Finance Committee hearing, ``Medicare Advantage Annual Enrollment:
Cracking Down on Deceptive Practices and Improving Senior
Experiences.'' We urge you to adopt the following recommendations
outlined in this statement to ensure that if seniors enroll in Medicare
Advantage (MA) they: receive accurate information regarding the
coverage, cost, and benefits of their plan; are not subject to
fraudulent activity and deceptive marketing tactics; obtain access to
updated accurate clinician directories; receive timely access to
treatment that is not inappropriately denied through the prior
authorization process; find accurate information regarding the cost of
their prescription medication.
ACP is the largest medical specialty organization and the second
largest physician membership society in the United States. ACP members
include 161,000 internal medicine physicians, related subspecialists,
and medical students. Internal medicine physicians are specialists who
apply scientific knowledge, clinical expertise, and compassion to the
preventive, diagnostic, and therapeutic care of adults across the
spectrum from health to complex illness.
Improve Transparency Regarding Coverage, Cost, and Benefits in MA
Plans
MA plans should provide beneficiaries with a clear and understandable
means to compare benefits and options when deciding between an MA plan
and traditional Medicare. The process of ``seamless conversion'' into
these plans should be stopped entirely and reevaluated so that newly
eligible Medicare beneficiaries are not automatically enrolled in their
commercial insurer's MA plan without their knowledge or understanding
that they may opt out of the plan.
MA program transparency at the consumer level is also very important.
The enrollment process, details regarding available benefits, cost-
sharing arrangements and premium costs, and clinician (or ``provider'')
directories should be readily available to all Medicare beneficiaries
and presented in a clear and understandable manner. Comparing MA plan
networks and available benefits still remains a challenge for
beneficiaries due to the lack of readily available plan information.
Beneficiaries and clinicians need to be fully aware of any differences
in coverage that could result in delays to appropriate care, such as
limits on prescription drug coverage and any access to criteria used by
the plan for making prior authorization determinations. MA plans can
also make significant changes to benefit options, cost sharing
arrangements, clinician networks, and other details from year to year,
making comparison even more difficult.\1\ ACP supports the MA Program
and its ability to provide beneficiaries with a choice of health
coverage as long as benefit requirements and essential consumer
protections are ensured, including providing valid and reliable
information to facilitate informed decision-making.
---------------------------------------------------------------------------
\1\ https://www.kff.org/report-section/medicare-advantage-plans-in-
2017-issue-brief/.
---------------------------------------------------------------------------
Reduce Fraudulent Activity in MA Plans
ACP calls on the Senate Finance Committee, the Centers for Medicare and
Medicaid Services (CMS), Office of Inspector General (OIG), and
external independent bodies to investigate potentially fraudulent
activity and the misuse of risk stratification by MA plans. Further,
when any fraudulent activity is identified, the responsible Medicare
Advantage Organization (MAO) or MA plan should be held liable for that
activity and not the physicians participating in the MA plan.
CMS must also address issues of fraud and abuse in the MA Program.
Reports \2\ from such organizations as The Center for Public Integrity
discuss allegations that some MA plans over bill CMS by exaggerating
illness severity in some of their patient populations. Requiring
transparency and specifically requiring publication of how the plan
captures illness severity through use of the Health and Human
Services-Hierarchical Condition Categories (HHS-HCC) risk adjustment
methodology could help in identifying areas of potential fraud and
promote a more cohesive method of capturing severity across all MA
plans. To further promote and maintain program integrity, the CMS's
Center for Program Integrity, the OIG, and such external independent
organizations such as MedPAC and the GAO should take the lead in
investigating potential situations of fraud or ``gaming the system''\3\
by MA plans to increase profitability by misusing the risk-
stratification process.
---------------------------------------------------------------------------
\2\ https://publicintegrity.org/health/why-medicare-advantage-
costs-taxpayers-billions-more-than-it-should/.
\3\ https://www.nytimes.com/2017/05/15/business/dealbook/a-whistle-
blower-tells-of-health-insurers-bilking-medicare.html?smprod=nytcore-
iphone&smid=nytcore-iphone-share&referer=
https://t.co/qX8GYze4pW%3famp=1.
---------------------------------------------------------------------------
Protect MA Beneficiaries from Deceptive Marketing Tactics During MA
Enrollment
We urge the Senate Finance Committee to investigate and prohibit
fraudulent marketing tactics used by some MA plans to enroll seniors in
their plans. ACP strongly supports \4\ CMS's proposal to increase the
transparency of MA plans and their respective marketing policies. The
College also supports the Agency's goal of ensuring that MA enrollees
receive the same access to medically necessary care they would receive
in traditional Medicare. To that end, we believe the Agency's proposal
to require agents to explain the effect of a beneficiary's enrollment
choice on their current coverage whenever the beneficiary makes an
enrollment decision is a great safeguard of traditional Medicare and
protection against current abusive marketing tactics.
---------------------------------------------------------------------------
\4\ https://assets.acponline.org/acp_policy/letters/
acp_comments_on_cms_proposed_changes_to_
medicare_advantage_and_part_d_2023.pdf?_gl=1*1t3y4st*_ga*MTM0NTkwMzIxNC4
xNjgxNDkz
Mzc4*_ga_PM4F5HBGFQ*MTY5ODMzNDM0Mi4xMDAuMS4xNjk4MzM0Nzk2LjUzLjAuMA..&
_ga=2.144903348.1807582808.1698246081-931781502.1649951016.
ACP also appreciates the Agency tightening MA marketing rules to
protect beneficiaries from misleading advertisements and pressure
campaigns. Prohibiting advertisements that do not mention a specific
plan name and that use words, imagery, and logos in a confusing way is
a critical step in ensuring information disseminated to beneficiaries
is accurate and not misleading. Due to the predatory nature and
increasing role of third parties in the marketplace, it is imperative
that CMS addresses the increasing number of beneficiaries misled into
believing an entity is the federal government or a product is endorsed
by Medicare. While CMS is simultaneously building a health system to
support health equity, trust in the federal government and the health
system is of utmost importance. ACP greatly appreciates the Agency's
recognition of this relationship and the impact that revising its own
Medicare-related marketing requirements may have on fostering trust
across all populations but particularly those most vulnerable.
Ensure Accurate and Updated Clinician Directories in Medicare
Advantage Plans
We support draft legislation \5\ that was released last year by the
Finance Committee that would codify existing requirements that MA plans
maintain accurate clinician directories that include contact
information and whether a clinician is accepting new patients. This
legislation would require MA plans to update a clinician's in-network
status changes within two days and post the clinician directories on a
public website.
---------------------------------------------------------------------------
\5\ https://assets.acponline.org/acp_policy/letters/
acp_letter_to_sfc_regarding_mental_health_
parity_discussion_draft_legislation_2022.pdf?_gl=1*1xw0a4c*_ga*MTM0NTkwM
zIxNC4xNjgxN
DkzMzc4*_ga_PM4F5HBGFQ*MTY5ODM0NTgyNy4xMDMuMS4xNjk4MzQ1OTc1LjQ0LjAuMA
..&_ga=2.145948724.1807582808.1698246081-931781502.1649951016.
It is imperative that federal and state regulators \6\ enact laws that
require health plans to ensure access to behavioral health clinicians
and primary care physicians, accurate directories \7\ and transparent
processes for selection of a clinician. Error-ridden clinician
directories may give patients a false impression \8\ that their plan's
``provider'' network is comprehensive and that their preferred
physician is in network. Evidence shows that patients who use
inaccurate mental health directories are more likely to receive a
surprise bill \9\ from an out-of-network behavioral health clinician
than patients who use an accurate directory. MA directories often
include incorrect \10\ information and a recent study \11\ found that
additional measures were needed to ensure a sufficient number of
clinicians within MA networks. We suggest requiring MA provider
directories include additional information,\12\ such as the health care
professional's gender, medical group and facility affiliations if
applicable.
---------------------------------------------------------------------------
\6\ https://store.samhsa.gov/sites/default/files/d7/priv/sma16-
4983.pdf.
\7\ https://www.cms.gov/medicare/health-plans/managedcaremarketing/
downloads/provider
_directory_review_industry_report_round_2_updated_1-31-18.pdf.
\8\ https://www.gao.gov/assets/gao-22-104597.pdf.
\9\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7497897/.
\10\ https://www.caqh.org/sites/default/files/explorations/CAQH-
hidden-causes-provider-directories-whitepaper.pdf?token=kx9rkgqJ.
\11\ https://www.gao.gov/assets/gao-15-710.pdf.
\12\ https://content.naic.org/sites/default/files/inline-files/MDL-
074_0.pdf.
Additionally, we urge you to require MA plans to maintain regularly
updated directories that include information on whether listed
clinicians are accepting new patients. Information published in MA
provider directories is often inaccurate. We support robust
requirements to ensure provider directories from MA provider
directories are searchable, accurate, current, and accessible. We urge
the Senate to require MA plans to update their provider directories on
a monthly basis to ensure that our patients may have access to accurate
directories when they choose a plan or health professional.
Remove Barriers to Care for Medicare Advantage Beneficiaries
We remain deeply concerned that some seniors that enroll in MA plans
may be denied care covered by their plans through the prior
authorization process. Prior authorization involves paperwork and phone
calls, as well as varying data elements and submission mechanisms that
may force physicians to enter unnecessary data in electronic health
records (EHRs) or perform duplicative tasks outside of the clinical
workflow. This inhibits clinical decision-making at the point of care
and may be an unnecessary burden for physicians and barrier to medical
care for patients.
HHS issued a report \13\ in 2022 that detailed abuse in the prior
authorization process in which ``Medicare Advantage insurers sometimes
delayed or denied beneficiaries' access to services, even though the
requests met Medicare coverage rules.'' A survey \14\ of more than 600
medical groups in March 2023 showed that 84 percent reported an
increase in their prior authorization requirements for Medicare
Advantage plans.
---------------------------------------------------------------------------
\13\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
\14\ https://www.mgma.com/federal-policy-resources/spotlight-prior-
authorization-in-medicare-advantage.
We urge the Senate to improve the process for prior authorization
approval through the passage of the Improving Seniors Timely Access to
Care Act of 2023. This legislation would help protect patients from
unnecessary delays in care and reduce administrative burdens on
physicians by standardizing and streamlining the prior authorization
approval process in Medicare Advantage. We are pleased that this
legislation has been approved by the House Ways and Means Committee and
the House Energy and Commerce Committee has slated this bill for
---------------------------------------------------------------------------
approval.
It would require that all MA plans establish an electronic prior
authorization process to streamline approvals and denials and the
Department of Health and Human Services to establish a process for MA
plans to provide ``real-time decisions'' for prior authorization
requests of items and services that are routinely approved. Further, we
appreciate the provision that would require MA plans that are unable to
meet these real-time prior authorization decisions due to ``extenuating
circumstances'' to issue final prior authorization decisions within a
72-hour and 24-hour time frame for regular and urgent services,
respectively. We also support the transparency requirements in the
bill, which would require MA plans to report on how often they use
prior authorization and their rates for approvals or denials.
We are pleased \15\ that CMS has announced changes to MA program,
including many provisions in the Improving Seniors Timely Access to Act
of 2023 that would streamline prior authorization approval process. We
urge you to approve the Improving Seniors Timely Access to Care Act to
ensure that these improvements to prior authorization are codified into
law.
---------------------------------------------------------------------------
\15\ https://www.acponline.org/acp-newsroom/internal-medicine-
physicians-say-changes-to-medicare-advantage-program-will-help-seniors-
access-care.
---------------------------------------------------------------------------
Behavioral Health Cost Sharing and Utilization Management in Medicare
Advantage
We continue to be concerned that prior authorization is often required
\16\ for mental health and substance use emergency services but is not
mandatory for analogous medical or surgical hospitalization events; in
addition, prior authorizations for generic medications for substance
use disorder are often required when generics for chronic physical
diseases are not. Concerns about burdensome step therapy and
utilization review requirements and disproportionately low
reimbursement rates for mental health and substance use disorder
treatment have also been reported \17\ to the U.S. Preventive Services
Task Force. Such stipulations add to administrative burden and patient
frustration.
---------------------------------------------------------------------------
\16\ https://www.hhs.gov/programs/health-insurance/mental-health-
substance-use-insurance-help/index.html.
\17\ https://www.hhs.gov/sites/default/files/mental-health-
substance-use-disorder-parity-task-force-final-report.pdf.
We urge the Senate to mandate a U.S. Government Accountability Office
(GAO) study on understanding differences in enrollee cost-sharing and
utilization management in Medicare Advantage between mental health/
substance use disorder benefits and non-mental health/substance use
disorder benefits, and in comparison, to Medicare fee-for-service. This
study shall require an analysis of how the utilization of prior
authorization and other utilization management tools are used to
determine coverage of mental health and substance use disorders in
Medicare Advantage. This provision was included in draft legislation
\18\ released by the Senate Finance Committee last year to improve
mental health parity.
---------------------------------------------------------------------------
\18\ https://www.finance.senate.gov/chairmans-news/wyden-crapo-
bennet-burr-release-mental-health-parity-discussion-draft.
---------------------------------------------------------------------------
Reform Step Therapy Protocols
Pharmacy benefit managers (PBMs) used by MA plans to administer
prescription drug benefits have developed a series of price management
tactics to curb the rising cost of prescription drugs. Among these,
step therapy policies, commonly called ``fail-first'' policies, require
patients to be initiated on lower-priced medications before being
approved for originally prescribed medications. Carriers can also
change coverage in an attempt to force patients off their current
therapies for cost reasons, a practice known as nonmedical drug
switching.
Step therapy, nonmedical drug switching, and other cost-curbing
formulary designs can also undermine the medical expertise of
physicians and fail to adequately account for the individual
characteristics and needs of patients, including comorbid conditions,
concurrent medications, and demographic factors, all of which can
impact a medication's effectiveness and side effects. Step therapy and
nonmedical drug switching have been shown to delay or inhibit access to
effective treatments \19\ and put patient safety at risk by increasing
the risk for hospitalizations and other adverse health events.
---------------------------------------------------------------------------
\19\ https://www.patientaccesscollaborative.org/videos/2019/3/19/
non-medical-switching-hurts-patients.
We urge the adoption of S. 652, the Safe Step Act of 2023, to ensure
seniors in MA plans have access to medications they need. This
legislation would amend the Employee Retirement Income Security Act
(ERISA) to require group health plans to provide an exception process
for the administering of prescription drugs in their step therapy
protocols. While the Safe Step Act does not ban step therapy protocols,
it places reasonable limits on their use and creates a clear process
for patients and doctors to seek exceptions to the step therapy
requirements and accelerates approval, when necessary, for needed
medications. Patients and their physicians would benefit greatly from
requiring insurers to implement a clear and transparent process for
when either party requests an exception to a step therapy protocol.
Ensure Transparency Regarding Drug Prices in Medicare Part D Plans
We also support efforts by Chairman Wyden and Ranking Member Crapo to
ensure that seniors that enroll in MA plans have accurate information
regarding the price and cost of their prescription drugs. ACP supports
S. 2973, the Modernizing and Ensuring PBM Accountability (MEPA) Act.
This legislation would set out new requirements for PBMs to annually
report drug prices and other information to Part D plan sponsors and to
the Secretary of Health and Human Services (HHS). PBMs would be
required to include information related to several categories, such as
information related to covered Part D drugs, drug dispensing, drug
costs and pricing, generic and biosimilar formulary placement, PBM
affiliates, financial arrangements with consultants, and potential PBM
conflicts of interest.
S. 2973 would also require PBMs or their affiliates to provide Part D
plans with a written explanation of contracts or arrangements with a
drug manufacturer (or affiliate) that makes rebates, discounts,
payments, or other financial incentives related the drug manufacturer's
drug(s) contingent upon coverage, formulary placement, or utilization
management conditions on other prescription drugs.
ACP supports the availability of accurate, understandable, and
actionable information on the price of prescription medication. ACP
urges health plans to make this information available to physicians and
patients at the point of prescribing to facilitate informed decision
making about clinically appropriate and cost-conscious care.
Conclusion
We urge the Senate Finance Committee to enact the reforms outlined in
our statement to prevent waste, fraud, and abuse in MA plans and ensure
that seniors who enroll in these plans have access to high quality
care. We encourage CMS to finalize proposals to prevent these abuses
and look forward to working with you to improve this program for our
physicians and patients. Should you have any questions regarding this
statement please contact Brian Buckley, our Senior Associate for
Legislative Affairs at [email protected].
______
Association for Clinical Oncology
2318 Mill Road, Suite 800
Alexandria, VA 22314
T: 571-483-1300
F: 571-366-9530
https://asco.org/
Statement of Everett E. Vokes, M.D., FASCO, Board Chair
The Association for Clinical Oncology (ASCO) is pleased to submit this
statement for the record of the hearing entitled, ``Medicare Advantage
Annual Enrollment: Cracking Down on Deceptive Practices and Improving
Senior Experiences.'' ASCO appreciates that the Committee is holding
today's hearing and has provided this opportunity to address the
deceptive practices that threaten oncologists' ability to deliver high-
quality cancer care that our patients, including those enrolled in
Medicare Advantage (MA) plans, deserve.
ASCO is a national organization representing nearly 50,000 physicians
and other health care professionals who care for people with cancer.
ASCO members are dedicated to conducting research that leads to
improved patient outcomes and are also committed to ensuring that
evidence-based practices for the prevention, diagnosis and treatment of
cancer are available to all Americans.
Prior Authorization
An ongoing source of frustration across the oncology care team is
overly burdensome prior authorization requirements. ASCO recently
published the results of a survey of our members in the United States
to assess the impact of prior authorization on cancer care.
Nearly all survey participants reported a patient has experienced harm
because of prior authorization mandates, including significant impacts
on patient health such as disease progression (80%) and loss of life
(36%). The most widely cited harms to patients reported were delays in
treatment (96%) and diagnostic imaging (94%); patients being forced
onto a second-choice therapy (93%) or denied therapy (87%); and
increased patient out-of-pocket costs (88%).
The survey responses also reflected the difficulties of the prior
authorization mandates. Nearly all respondents report experiencing
burdensome administrative requirements, delayed payer responses, and a
lack of clinical validity in the process. The survey also found that,
on average:
It takes a payer 5 business days to respond to a prior
authorization request.
A prior authorization request is escalated beyond the staff
member who initiates it 34% of the time.
Prior authorizations are perceived as leading to a serious
adverse event for a patient with cancer 14% of the time.
Prior authorizations are ``significantly'' delayed (by more than
one business day) 42% of the time.
Over the past several years, Members of Congress have become
increasingly concerned about the use of prior authorization in MA
plans. The House of Representatives unanimously passed the Improving
Seniors' Timely Access to Care Act (S. 3018/H.R. 3173) in September
2022. This bipartisan legislation, developed with input from ASCO,
finished the 117th Congress with 380 combined cosponsors--53 Senators
and 327 Representatives--supporting the legislation. Importantly, more
than 500 organizations representing patients, health care providers,
the medical technology and biopharmaceutical industry, health plans,
and others endorsed the legislation.
While the legislation did not pass the Senate last Congress, ASCO is
optimistic that the CMS Electronic Prior Authorization proposed rule,
which was published in the Federal Register on December 13, 2022, takes
steps to improve the prior authorization requirements that will improve
beneficiary access to necessary and lifesaving services and ease the
administrative burden on physicians and payers. This rule aligns with
many of the provisions included in the legislation, which, if passed,
would have gone into effect in 2024.
Both this proposed rule and the legislation:
Establish an electronic prior authorization program.
Standardize and streamline the prior authorization process.
Increase transparency around MA prior authorization requirements
and their use.
We strongly urge CMS to address two overarching concerns with the
proposed rule to maintain current regulatory and legislative momentum
to address prior authorization:
1. Expedite the implementation timeline of provisions finalized in
this rule for all plans and require compliance with finalized proposals
in contract year 2024.
2. Include drugs--which are currently excluded--in the electronic
prior authorization program and application programming interface (API)
requirements.
ASCO appreciates the 233 Representatives and 61 Senators who signed
letters to CMS urging the agency to finalize and implement the proposed
rule, as well as urges CMS to expand on the rule to allow for some
real-time electronic prior authorization decisions, require a response
within 24 hours for urgently needed care, and increase transparency.
Thank you for your attention to this important issue. ASCO is pleased
to serve as a resource for you and your colleagues as you continue to
investigate deceptive practices within Medicare Advantage that are
impacting ASCO members and their practices. Should you have any follow-
up questions or concerns, please do not hesitate to contact Kristine
Rufener at [email protected].
______
Association of Web-Based Health Insurance Brokers
The Association of Web-Based Health Insurance Brokers (AWHIB)
appreciates the opportunity to share its perspective on Medicare
Advantage marketing practices and agent compensation. While we share
the Committee's concerns around deceptive marketing practices that
mislead seniors, we want to make sure that the Committee recognizes the
value that agents and brokers bring in helping Medicare beneficiaries
understand their options. In particular, we want to ensure that the
Committee is aware of and properly distinguishing between agents and
brokers and the ``middlemen'' that are responsible for the behaviors
about which the Committee is rightfully concerned. Although no one is
questioning that agents and brokers should be fairly compensated for
assisting beneficiaries, we want to resolve apparent confusion
regarding administrative payments. Non-commission administrative
payments are often an essential part of the fair compensation to agents
and brokers when those agents and brokers perform services beyond the
enrollment of beneficiaries. Commissions alone do not adequately
compensate agents and brokers who provide those services, and indeed
the first-year commissions from insurance carriers alone do not cover
the cost of acquiring and enrolling the beneficiary.
I. AGENTS AND BROKERS ARE CRITICAL TO THE MEDICARE ADVANTAGE ECOSYSTEM
AND ARE NOT THE MIDDLEMEN
A. Beneficiaries Rely on Agents and Brokers for Help
Agents and brokers serve a critical role in educating beneficiaries
about the Medicare Advantage and Prescription Drug programs. Each year,
new beneficiaries become eligible for Medicare, there are annual
programmatic changes to Medicare, and insurers update and offer new
Medicare Advantage plans. As Christina Reeg, Ohio senior health
insurance information program director for the Ohio Department of
Insurance, explained, there are so many options that ``most Medicare
beneficiaries won't review or change plans, because the task of
comparing is too daunting to help narrow the field.''
Agents and brokers help beneficiaries with this daunting task by
educating them on their choices while taking into consideration their
specific healthcare needs and the specific benefits offered by the
available plans, including network participation and prescription drug
coverage that is critical to their coverage. Importantly, agents and
brokers provide a valuable service that is not available from any other
source, including the Centers for Medicare and Medicaid Services
(``CMS''), State Health Insurance Assistance Program (``SHIPS'') or
even the insurance carriers themselves. Specifically, each of the three
witnesses agreed that neither of CMS nor SHIPS have adequate resources
to help the 60 million beneficiaries that are eligible for Medicare
Advantage. Among other things, they rely on the CMS Medicare plan
finder, which is not always up to date and does not provide critical
information, such as doctor network participation and drug coverage.
While insurance carriers may be able to provide this information, they
can only provide it for their own plans. In order to compare plans from
multiple carriers, the beneficiary would need to contact each carrier
separately; whereas a broker can simplify the process by presenting and
advising on plans from several carriers in a single interaction. As a
result, many beneficiaries prefer to work with brokers instead of
separately contacting each insurance carrier to find the plan that is
the better match for their personal needs.
Medicare beneficiaries value the role of the agent and broker--
according to the Commonwealth Fund, agents and brokers assist over 30
percent of Medicare beneficiaries in selecting a Medicare Advantage
plan or traditional Medicare, which is a greater share than
Medicare.gov, state health insurance assistance programs,
advertisements or friends and family.\1\ According to the Commonwealth
Fund's most recent report, 96 percent of beneficiaries said they feel
like there are too many plan options and that they are more likely to
stick with their current plan than to seek out a new plan. More than 1
in 3 beneficiaries said they would like to know more about benefits
outside of their coverage options, and 1 in 4 would like one-on-one
help. By providing this assistance as licensed professionals, agents
and brokers alleviate the burden on CMS, which is not currently
resourced to provide the manner or volume of assistance demanded by
Medicare beneficiaries in selecting coverage options.
---------------------------------------------------------------------------
\1\ https://www.commonwealthfund.org/publications/issue-briefs/
2022/oct/traditional-medicare-or-advantage-how-older-americans-choose.
---------------------------------------------------------------------------
B. Agents and Brokers are Distinct from Lead Generators
Agents and brokers are highly regulated state licensed and registered
entities that educate, solicit and enroll beneficiaries into Medicare
Advantage plans and other insurance products. The role of the agent or
broker is fundamentally different than the lead generator, which serves
a ``middleman'' role in identifying and acquiring potential leads and
selling them to another entity, which could be another lead generator,
an agent/broker or an insurance carrier.
AWHIB members are concerned about the continual reselling of personal
beneficiary data by multiple parties and have advocated for reasonable
limits that would prevent continual reselling. AWHIB supports limits
that prevent multiple transfers of beneficiary information. At the same
time, the ability of independent agents and brokers to receive
referrals for Medicare Advantage plans for which that agent is licensed
to offer should be preserved. Otherwise, only insurance carriers would
be able to receive those referrals, which would lead all beneficiaries
who are referred through lead generators to carriers, which can only
offer their own plans and do not allow easy comparisons between
carriers.
II. AGENT/BROKER COMPENSATION AND ADMINISTRATIVE PAYMENTS ARE ALREADY
REGULATED BY CMS
A. Agent and Broker Compensation is Tied Directly to Beneficiary
Satisfaction
Agents and brokers are not incentivized to engage in unscrupulous
activities. Rather, they are directly contracted with the carriers and
their goals are naturally aligned with the insurance carriers, which is
to enroll beneficiaries in a plan that best meets their needs.
According to Krista Hoglund, CEO of Security Health Plan, brokers are
responsible for ``85 percent of Security's health plan enrollment . . .
we need to partner with brokers to help put consumers in the plan that
is best for them.''
While agents and brokers receive enrollment-based commissions from
insurance carriers, agents and brokers rely on beneficiary satisfaction
for long-term sustainability. Agents and brokers are incentivized to
help Medicare beneficiaries select the plan which best suits their
needs, as they benefit most when beneficiaries stay with their selected
plan for as long as possible.
Pursuant to existing CMS regulation, agents and brokers do not get paid
any initial compensation for an enrollment if the beneficiary
disenrolls from the plan within the first 90 days. They also only
receive renewal compensation if the beneficiary renews the plan year
after year. All of this incentivizes agents and brokers to recommend a
plan that is in the beneficiary's best interests. Moreover, this
compensation is capped at a specific dollar amount by CMS regulations.
CMS sets the maximum commission payable for enrollment into MA and PDP
plans at a predetermined fair market value (FMV) amount that is
adjusted annually to reflect growth in Medicare costs.\2\ The current
commission amounts are:
---------------------------------------------------------------------------
\2\ ``Fair market value (FMV) means, for purposes of evaluating
agent or broker compensation under the requirements of this section
only, the amount that CMS determines could reasonably be expected to be
paid for an enrollment or continued enrollment into an MA plan.'' 42
CFR Sec. 422.2274(a), (d)(2).
For Medicare Advantage: For PDP:
$611/enrollee in most states $100/enrollee
$689/enrollee in CT, PA, DC
$762/enrollee in CA, NJ
Federal spending per Medicare Advantage enrollee is over $13,000 per
year; commissions are capped at less than 5 percent of the average cost
of the plan being sold.\3\ The June 2023 increase in commissions was
approximately 1.67% in most states, about half the CPI inflation rate
for the year.
---------------------------------------------------------------------------
\3\ https://aspe.hhs.gov/sites/default/files/documents/
14a262cfc2979b8cc1a9dffaee06b022/medicare-advantage-enrollment-
spending-overview.pdf.
Commission payments for each year that a beneficiary enrolls in the
same or a ``like'' plan are also strictly regulated, at up to 50
percent of FMV, as defined by CMS.\4\ The commissions paid by each
carrier for each plan are publicly reported by CMS each year.\5\
---------------------------------------------------------------------------
\4\ 42 CFR Sec. 422.2274(d)(3).
\5\ https://www.cms.gov/medicare/health-drug-plans/managed-care-
marketing/medicare-marketing-guidelines/agent-broker-compensation.
---------------------------------------------------------------------------
B. Agents and Brokers Should be Fairly Compensated for the Additional
Services They Provide
Insurance carriers may also pay brokers and agents for ``services other
than enrollment of beneficiaries.''\6\ Examples of such services
include: ``training, customer service, agent recruitment, operational
overhead, or assistance with completion of health risk
assessments.''\7\ These are payments for specific services that agents/
brokers provide.
---------------------------------------------------------------------------
\6\ 42 CFR Sec. 422.2274(e)(1).
\7\ Id.
Payments for these services must not exceed ``the value of those
services in the marketplace.''\8\ Unlike enrollment services, these
services, and the cost of providing them, varies depending upon the
services that are provided and their value in the marketplace.
---------------------------------------------------------------------------
\8\ 42 CFR Sec. 422.2274(e)(1).
---------------------------------------------------------------------------
These administrative payments can be for services such as:
Telephonic equipment required by CMS to record all sales calls
and to retain them for 10 years;
Tools to support plan comparison and enrollment;
Other equipment and services required to support agent/broker
services;
Health risk assessments, in which a customer service
representative obtains information from a beneficiary to properly
assess the beneficiary's health risks for the insurance carrier;
Licensing and appointment fees;\9\
---------------------------------------------------------------------------
\9\ Insurance carriers may pay brokers and agents the costs of
becoming licensed and appointed to sell the carriers' plans. Licensing
and appointment are state-based requirements for the sale of health
insurance, including MA and PDP products.
---------------------------------------------------------------------------
Product, sales and compliance training;
Outreach to plan members to provide information about, and
assistance with, how to use and access plan benefits after enrollment;
Quality and compliance oversight activities; and
Marketing, advertising and lead generation activities.
Marketing, advertising and lead generation activities may include, but
may not be limited to, the costs associated with printing and mailing
marketing and educational materials, producing television and radio
commercials and purchasing media placements, building and operating
websites, paid digital marketing, social media marketing, purchasing
leads, etc. As with all marketing of MA and PDP products, such
marketing services must meet CMS' stringent marketing requirements,
including the extensive regulations imposed each year on filing,
review, and approval of marketing materials.\10\, \11\ Such
marketing may highlight the broker as a platform for choosing among
multiple carriers, rather than focus on the plans of only a single
carrier.
---------------------------------------------------------------------------
\10\ 42 CFR Sec. 422.2274(c)(7).
\11\ 42 CFR Sec. 422.2261.
Administrative payments are essential to ensuring fair compensation of
agents and brokers, as commissions from insurance carriers do not fully
cover the cost of acquiring, enrolling and servicing the beneficiary.
Beneficiary acquisition costs reflect overall staffing, training and
personnel costs. They also cover cost of complying with the extensive
regulatory marketing requirements, as well as the cost of providing any
additional services required by carriers. As noted previously, while
the current MA maximum commission ranges from $611 per enrollee to $762
per enrollee depending on the state, agent and broker acquisition costs
according to publicly reported customer acquisition costs for publicly
traded insurance agencies ranged from $888 per enrollee to over $1,200
per enrollee.\12\ Consequently, administrative payments from carriers
are critical to helping agents and brokers assist beneficiaries and
meet insurance carrier expectations in terms of additional services.
---------------------------------------------------------------------------
\12\ eHealth, Inc. (EHTH) data from 2022 Form 10-K filing, page 55.
SelectQuote, Inc. (SLQT) data from 2023 Form 10-K filing, page 51.
GoHealth, Inc. (GOCO) data derived from 2022 Form 10-K filing as:
$589,985,000 cost of submission (10-K p. 54) divided by 862,656
Medicare submissions (10-K p. 53). Each public company calculates and
reports this type of information differently, so numbers are not
directly comparable among the companies. One of the differences is that
GoHealth's Customer Acquisition Cost (``CAC'') is calculated on a
submitted application basis whereas eHealth and SelectQuote calculate
CAC on an approved application basis. The $611 first-year MA commission
is on a paid application basis. Only a certain percentage of submitted
applications become approved applications, and then paid applications,
for which the brokers actually receive commission payments.
In addition to the fact that CMS regulations require that payments made
for administrative payments must not exceed the value of those services
in the marketplace, carriers are incentivized not to overpay for
services funded by administrative payments because overall payments to
brokers are constrained by medical loss ratio (MLR) limits. The
Affordable Care Act (ACA) established an 85% MLR for MA and PDP plans.
Under CMS regulations, this 85% does not include commissions, marketing
fees, or other non-patient-care fees paid to brokers and agents, which
must instead fit within the remaining 15% administrative side of the
MLR ratio.\13\ For clarity, this 15% of plan revenue under the contract
with CMS also includes all carrier administrative overhead and carrier
profits as well, so only a small amount of this 15% of plan revenue is
ever potentially paid to agents and brokers.
---------------------------------------------------------------------------
\13\ 42 CFR Sec. Sec. 422.2410 and 423.2410.
Furthermore, payments to agents and brokers do not reduce the resources
available to pay for Medicare enrollees' health care because 85% of
plan revenue under the contract with CMS must be used for patient care,
rather than for such other items as administrative expenses or profit.
MLR regulations provide an upper bound on the amount of spending that
may go from the Medicare Trust Funds and Medicare beneficiary premiums
to carrier profit and carrier administrative overhead (such as
compliance and general operational oversight, information systems,
customer service, accounting, as well as commissions, marketing fees,
---------------------------------------------------------------------------
or other non-patient-care fees paid to brokers and agents).
Agents and brokers play an essential role in the Medicare marketplace,
and they should be fairly compensated for the services that they
provide in support of beneficiaries and carriers.
_______________________________________________________________________
About the Association of Web-Based Health Insurance Brokers (AWHIB)
AWHIB is a trade association of web-broker entities (WBEs) that work in
collaboration with the Center for Medicare & Medicaid Services to
enroll consumers in qualified health plan coverage offered on the
Federally-facilitated Exchanges (FFE) and state-based exchanges on the
Federal Platform (SBE-FP). Several of AWHIB's members also actively
assist Medicare beneficiaries with selection of, and enrollment into,
Medicare Advantage plan and Part D prescription drug benefit plan
coverage that best meet their needs. AWHIB collaborates with consumers,
issuers, regulators, lawmakers, and other industry groups to
continually develop technologies and enrollment strategies that provide
Americans with access to health insurance products and services.
______
Statement Submitted by Laura Avant
medicare advantage scams
I am still getting several mailed and called invitations to join a
Medicare DisAdvantage plan every day. I enjoy calling them and telling
them that their happy days of lying to consumers are nearly over
because the Senate will put some restrictions on this fraudulent
practice.
I watched the meeting on Zoom yesterday with several other members and
volunteers of Be a Hero. We met with Senator Bennet's staff health and
gave her some relevant information on Monday, then met on Zoom with his
DC staff and repeated many of our points. Our hope was that Senator
Bennet would take a strong stance regarding the many lies, deceptions
and failure to treat patients that define these plans and he did.
I was also pleased to hear Senator Warren talk about the whole
Advantage program and its consistent failure to provide care for U.S.
citizens while robbing the Medicare Trust Fund to the tune of about
$200 billion a year.
I was not so pleased to hear the general tone of pro-insurance
companies that was prevalent in this hearing. They even heard
repeatedly from an insurance executive and gave her numerous times to
justify her company's recruitment and up-coding practices as though her
company really had the interests of constituents at heart.
My hope is that this will be the first of several meetings to address
not only dishonesty and lack of transparency in advertising these plans
but the entire gamut of patient harm and treasury robbery that is going
on. Be a Hero will press on until a true solution is reached.
Thank you for inviting us to join.
______
Better Medicare Alliance
1411 K Street, NW, Suite 1400
Washington, DC 20005
202-735-0037 (office)
202-885-9968 (fax)
https://bettermedicarealliance.org/
Statement of Mary Beth Donahue, President and CEO
Better Medicare Alliance, on behalf of our Alliance and the 31 million
beneficiaries enrolled in Medicare Advantage, is pleased to submit the
following statement for the record related to the October 18, 2023
Senate Finance Committee Hearing titled Medicare Advantage Annual
Enrollment: Cracking Down on Deceptive Practices and Improving Senior
Experiences.
Better Medicare Alliance (BMA) is a community of over 200 Ally
organizations and more than 1 million grassroots beneficiary advocates
who value Medicare Advantage and the affordable, high-quality,
coordinated care it provides to over 31 million beneficiaries.
Together, our diverse Alliance of community organizations, providers,
aging service organizations, health plans, and beneficiaries share a
deep commitment to ensuring Medicare Advantage is a high-quality, cost-
effective option for current and future Medicare beneficiaries.
Seniors and individuals with disabilities eligible for Medicare
actively choose and trust the value-driven, affordable, quality, and
innovative health care available in Medicare Advantage. Through value-
based payment design and care coordination and management that results
in improved health outcomes, extra benefits, and lower costs for
beneficiaries and the Federal Government, Medicare Advantage addresses
the needs of today's beneficiaries. With growing and high consumer
satisfaction, Medicare Advantage is building the future of Medicare.
Over the past 5 months, BMA has engaged its Allies through a series of
roundtable conversations to discuss recommendations for policymakers to
further maintain and modernize the Medicare Advantage program. One of
the overarching recommendation is to establish marketing guidance that
supports beneficiaries in making informed choices. Recognizing
Congress, and in particular this Committee's commitment to ensuring
beneficiaries receive complete, accurate, and unbiased information
about their health care choices, and the recent actions taken by the
Centers for Medicare and Medicaid Services (CMS) in the CY 2024
Medicare Advantage Final Rule (Final Rule), BMA puts forth these
recommendations as additional measures to further enable beneficiaries
to make informed choices.
CMS responded to an increase in beneficiary complaints about marketing
practices conducted by private sector agents, brokers, or third-party
marketing organizations (TPMOs). In the CY 2024 Final Rule, CMS
finalized restrictions to ensure that beneficiaries are not misled by
inaccurate marketing materials. The rule includes provisions to (1)
limit the use of the Medicare name, logo, and products or information
in health plan marketing materials, (2) increase CMS's authority to
review marketing materials, develop marketing standards, and prohibit
certain marketing activities, (3) prohibit marketing potential savings
to enrollees in certain circumstances, and (4) prohibit marketing
events from occurring within 12 hours of an educational event. The
Final Rule also includes provisions for TPMOs, such as requiring that
they disclose the number of health plans they represent in an area, BMA
has supported such steps to ensure transparency and accountability
within Medicare Advantage.\1\ Congress has also responded to complaints
surrounding marketing practices. In 2022, this Committee released a
report on misleading marketing practices and potential policy
recommendations to address Medicare Advantage marketing.\2\
---------------------------------------------------------------------------
\1\ CMS. CY 2024 Part C & D Rule. April 2023. Available at https://
www.federalregister.gov/documents/2023/04/12/2023-07115/medicare-
program-contract-year-2024-policy-and-technical-changes-to-the-
medicare-advantage-program.
\2\ Senate Finance Committee. Deceptive Marketing Practices
Flourish in Medicare Advantage. Available at https://
www.finance.senate.gov/imo/media/doc/Deceptive%20Marketing%20
Practices%20Flourish%20in%20Medicare%20Advantage.pdf.
Below are additional policies that will further support beneficiaries
---------------------------------------------------------------------------
in making informed health care choices including:
Enhance enforcement of misleading marketing practices. CMS's
Medicare Communications and Marketing Guidelines states ``plans are
responsible for ensuring compliance with applicable federal laws and
regulations, including CMS's marketing and communications
regulations.''\3\ According to a 2022 Senate Finance Committee inquiry
on deceptive marketing practices in Medicare Advantage, between 2017 to
2022, only one enforcement decision was related to deceptive marketing
practices. CMS should increase consequences for health plans and their
marketing partners that engage in misleading marketing practices.\4\
CMS should consider levying the following enforcement actions, if
warranted, on health plans to ensure compliance with its marketing and
communication regulations: (1) monetary penalties, (2) suspension of
enrollment, (3) immediate suspension of enrollment, (4) immediate
suspension of enrollment and marketing, and (5) termination.
---------------------------------------------------------------------------
\3\ CMS. Medicare Communications and Marketing Guidelines (MCMG).
Available at https://www.cms.gov/files/document/medicare-
communications-marketing-guidelines-2-9-2022.pdf.
\4\ United States Senate Committee on Finance. Wyden Reports
Deceptive Marketing Practices in Medicare Advantage that Harm Seniors.
Available at https://www.finance.senate.gov/chairmans-news/wyden-
reports-deceptive-marketing-practices-in-medicare-advantage-that-harm-
seniors.
Enhance oversight of companies engaging in misleading marketing
practices. CMS should consider increasing funding to organizations that
help monitor and report on marketing practices. State Health Insurance
Assistance Programs (SHIPs), the Senior Medicare Patrol program (SMP),
and Departments of Insurance are independent organizations that provide
free, objective information on plan selection and benefits to all
Medicare beneficiaries.\5\ The Senate Finance Committee's 2022 inquiry
identified these organizations as valuable partners in identifying
local and national companies who are engaging in misleading or
deceiving practices.\6\
---------------------------------------------------------------------------
\5\ CMS. CMS/AOA Data Reporting Guidance: Joint SHIP/SMP Programs.
Available at https://www.cms.gov/Outreach-and-Education/Outreach/
Partnerships/Downloads/SMPSHIPGuidance.pdf.
\6\ Senate Finance Committee. Deceptive Marketing Practices
Flourish in Medicare Advantage. Available at https://
www.finance.senate.gov/imo/media/doc/Deceptive%20Marketing%20
Practices%20Flourish%20in%20Medicare%20Advantage.pdf.
Establish a code of conduct and/or best practices for TPMOs with
continued oversight from health plans and CMS. While CMS prohibits
various marketing practices for health plans (e.g., reference to
statistical data), it does not offer a set of guidelines for TPMOs.\7\
---------------------------------------------------------------------------
\7\ CMS. Chapter 3--Medicare Marketing Guidelines. Available at
https://www.cms.gov/medicare/health-plans/managedcaremarketing/
downloads/finalmmg051509.pdf.
Prohibit TPMOs from distributing beneficiary contact
information. TPMOs are currently permitted to collect personal
beneficiary data and sell this information to other TPMOs. When
beneficiaries place a call or click on a web-link related to an
advertisement for a Medicare Advantage plan, they are often unaware
they are providing consent for their contact information to be shared
with other TPMOs for future marketing activities. CMS proposed to
prohibit such activity in the CY 2024 Medicare Advantage and Part D
Proposed Rule, but the agency did not finalize the policy.\8\ However,
CMS noted that it may address this provision in a future final rule.
---------------------------------------------------------------------------
\8\ CMS. Contract Year 2024 Policy and Technical Changes to the
Medicare Advantage and Medicare Prescription Drug Benefit Programs
Proposed Rule (CMS-4201-P). Available at https://www.cms.gov/newsroom/
fact-sheets/contract-year-2024-policy-and-technical-changes-medicare-
advantage-and-medicare-prescription-drug.
In conclusion, BMA appreciates your interest and work on this important
topic and share your commitment to strengthening the program and better
informing beneficiaries of their Medicare choices. We welcome the
opportunity to discuss these important issues with the Committee
working in partnership with our Allies and partners. We appreciate
being able to continue working together and ensuring that all Medicare
Advantage beneficiaries have the tools and resources necessary to
---------------------------------------------------------------------------
attain optimal health and well-being.
______
Blue Cross Blue Shield Association
1310 G Street, NW
Washington, D.C. 20005
202.626.4800
www.BCBS.com
Statement of David Merritt, Senior Vice President of Policy and
Advocacy
Blue Cross and Blue Shield (BCBS) companies want everyone to have
access to high-quality, affordable and equitable health care. This is
especially critical for the nearly 32 million seniors and Americans
with disabilities who choose Medicare Advantage (MA)--an increasingly
popular program that provides affordable, coordinated, patient-centered
care and offers additional benefits that original Medicare does not,
such as meal support and transportation. Medicare Advantage has a
proven track record of reducing costs and improving care. As more and
more beneficiaries choose MA over the traditional fee-for-service
Medicare (FFS) program, the Blue Cross Blue Shield Association (BCBSA)
commends Chairman Wyden, Ranking Member Crapo, and members of the
Senate Finance Committee for holding this important hearing to examine
MA annual enrollment.
BCBSA is a national federation of 34 independent, community-based and
locally operated BCBS companies (Plans) that collectively cover, serve
and support 1 in 3 Americans in every ZIP code across all 50 states and
Puerto Rico. BCBS Plans contract with 96% of hospitals and 95% of
doctors across the country and serve those who are covered through
Medicare, Medicaid, an employer, or purchase coverage on their own.
Medicare Advantage Enrollment, Satisfaction and Quality
Medicare Advantage beneficiaries are extremely satisfied \1\ with their
health care coverage with 98% of beneficiaries saying they are
satisfied with their MA plan, and 97% expressing satisfaction with
their network of physicians, hospitals and specialists. BCBS companies
collectively cover 4.5 million people in MA plans, which represents
about 14% of the market. Enrollment in MA plans more than doubled
between 2011-2021 with BCBS MA enrollment experiencing an 8% annual
growth rate from the end of 2018 to September 2023.
---------------------------------------------------------------------------
\1\ https://bettermedicarealliance.org/medicare-advantage-
explained/.
Looking forward to 2024, BCBS will have a considerable geographic
presence with individual MA plan offerings in 48 states and Puerto
Rico, including new expansion to Mississippi. Additionally, for the
third straight year, BCBS Plans lead all MA carriers in the number of
eligible beneficiaries with access to individual MA products, reaching
approximately 800,000 more Medicare eligibles than the next highest
---------------------------------------------------------------------------
competitor in 2024.
This growth in enrollment is not surprising because the evidence shows
MA delivers better services, better access to care, and better value.
Studies show \2\ that MA plans outperform original Medicare on leading
quality measures, including reduced hospital admissions, lower
inpatient care utilization and fewer emergency room visits. Compared to
original Medicare, MA plans offer significant initiatives in primary
care and preventive services, care coordination and case management
designed to improve quality, with an emphasis on members with chronic
conditions. MA beneficiaries report spending nearly $2,000 less on out-
of-pocket costs and premiums annually. MA covers all Medicare-covered
services like hospital and physician services for 24% less than
original Medicare.
---------------------------------------------------------------------------
\2\ https://bettermedicarealliance.org/publication/avalere-
medicare-advantage-outcomes-among-beneficiaries-with-chronic-
conditions/.
---------------------------------------------------------------------------
Third Party Marketing Organizations (TPMOs)
With the Medicare open enrollment period now underway, BCBS companies
are committed to working with policymakers to build on the success of
the MA program to ensure it continues to meet the diverse needs of
beneficiaries. This commitment includes ensuring that marketing
materials provide beneficiaries with accurate, easy-to-understand
information about their coverage options. BCBSA is supportive of the
Centers for Medicare and Medicaid Services' (CMS) new marketing
guidelines which provide greater transparency and support to
beneficiaries in making informed decisions about their health benefits.
We appreciate the efforts of lawmakers and the Administration to
protect beneficiaries from misleading marketing and reduce rapid
disenrollment rates. We share these concerns and fully support recent
regulatory changes to curb deceptive marketing practices and protect
beneficiary information, including:
Revisions to disclaimer and material submission requirements for
TPMOs;
Prohibiting the use of superlatives in marketing materials;
Limitations on the use of the Medicare name and logo; and
Limiting call recordings between TPMOs and beneficiaries to
marketing and enrollment calls.
Overall, the actions taken to address marketing in the MA program are a
much-needed step in the right direction. We look forward to working
with Congress to ensure beneficiaries are protected from deceptive
marketing practices and have the information they need to make health
coverage decisions that meet their needs.
Increasing Transparency and Improving Senior Experiences on Medicare
Plan Finder
Increasing transparency around supplemental benefit offerings empowers
beneficiaries to make more informed choices about their benefit
options. Making changes to the Medicare Plan Finder is an important way
to educate beneficiaries about the availability of supplemental
benefits.
We recommend Congress support regulatory action to modify the Plan
Finder to ensure comprehensive summaries of available supplemental
benefits in plan compare. We recommend CMS conduct working sessions
with the health plans to assist with creating and testing the web-based
version of the software so that stakeholders can provide suggestions on
how to file some of the more complex benefits.
Conclusion
We applaud today's Senate Finance Committee hearing to help advance our
shared goal of ensuring Medicare beneficiaries receive unbiased,
actionable, and easy-to-navigate information to make informed decisions
about their coverage and care. We look forward to working with Congress
to build on the solid foundation of the MA program to ensure stability,
preserve access to care and increase competition.
______
Statement Submitted by Lucille Celestino
We don't need more competition amongst Medicare Advantage Plans.
We need to overhaul the Medicare system to stop MA plans from
abusing lower income individuals who cannot afford Supplement plans and
have no real choice but the Medicare Advantage Plans.
We need to get rid of the built in bigotry of Original Medicare
which mandated the 20 percent rule based on the demands of racist
southern politicians of the past. This is 2023.
We need to respect health-care providers and not support a private
enterprise that seeks to come between them and their patients.
Claims of added benefits by MA plans must be countered by at least
making those minimal benefits available to all Medicare recipients
without the exaggerated fraudulent marketing of the MA plans.
Rules that allow health-care dollars of Medicare to be offered
instead as food or income support need to be revised and eliminated.
We must stop Medicare Advantage from raiding our Medicare Fund for
profit at the expense of our most vulnerable Seniors.
What is going on is craven and obscene.
The time to act is now.
Respectfully,
Lucille Celestino
______
Center for Economic and Policy Research
1611 Connecticut Avenue, NW, Suite 400
Washington, DC 20009
https://cepr.net/
Statement of Brandon Novick
I am Brandon Novick, Domestic Program Outreach Assistant at the Center
for Economic and Policy Research (CEPR), and I am pleased to submit
this statement on behalf of CEPR.
Deceptive and fraudulent advertising for MA plans cost taxpayers $6
billion in 2022 alone; however, this symptom only constitutes between
4% and 7% of the larger issue: MA itself.\1\ In 2022, the privatization
of Medicare through MA cost taxpayers between $88 billion and $140
billion.\2\
---------------------------------------------------------------------------
\1\ David Lipschutz, ``Senate Finance Committee Holds Hearing on
Medicare Advantage Marketing Misconduct,'' Center for Medicare
Advocacy, October 19, 2023, https://medicare
advocacy.org/senate-finance-committee-holds-hearing-on-medicare-
advantage-marketing-misconduct/.
\2\ Physicians for a National Health Program, ``Our Payments Their
Profits: Quantifying Overpayments in the Medicare Advantage Program''
(Physicians for a National Health Program, October 4, 2023), https://
pnhp.org/system/assets/uploads/2023/09/MAOverpaymentReport_
Final.pdf.
The federal government will have given over $450 billion in 2023 to
insurance companies running MA plans, who now provide coverage to 51%
of Medicare beneficiaries.\3\ Thus, it is only natural that plans,
marketers, and brokers will utilize wide-ranging strategies, however
misleading, to get as much taxpayer money as possible. Ultimately, much
of these taxpayer dollars are going to the largest, for-profit
insurance companies; UnitedHealthcare and Humana account for 46% of MA
enrollment in 2022.\4\
---------------------------------------------------------------------------
\3\ Nancy Ochieng et al., ``Medicare Advantage in 2023: Enrollment
Update and Key Trends,'' Kaiser Family Foundation, August 9, 2023,
https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2023-
enrollment-update-and-key-trends/.
\4\ Meredith Freed et al., ``Medicare Advantage 2023 Spotlight:
First Look,'' Kaiser Family Foundation, November 10, 2022, https://
www.kff.org/medicare/issue-brief/medicare-advantage-2023-spotlight-
first-look/.
While MA plans advertise comprehensive, inexpensive coverage, they fail
to make clear the realities of poor coverage through restricted
networks, prior authorizations and denials of care, and high costs for
their supplemental benefits. This statement delves into what MA plans
---------------------------------------------------------------------------
don't tell the American people in their advertisements.
Overall, MA costs taxpayers billions more than Traditional Medicare
(TM), enriches large insurance companies, and provides less reliable
coverage. Thus, CEPR urges Congress to save money and increase quality
coverage by bolstering TM and clamping down on misleading advertising
and overpayments to MA plans.
Poor Coverage in MA
Last year's report on deceptive marketing practices in MA by the
Majority Staff of the U.S. Senate Committee on Finance highlights how a
principal way marketers mislead Medicare beneficiaries is by suggesting
that their preferred providers are in network.\5\ While this deception
is fraudulent on its face, it highlights the larger problem of
restrictive networks in MA.
---------------------------------------------------------------------------
\5\ Majority Staff of the U.S. Senate Committee on Finance,
``Deceptive Marketing Practices Flourish in Medicare Advantage'' (U.S.
Senate, November 2, 2022), https://www.finance.
senate.gov/imo/media/doc/
Deceptive%20Marketing%20Practices%20Flourish%20in%20Medicare
%20Advantage.pdf.
Medicare beneficiaries in TM can see nearly any provider they prefer,
while those in MA plans have access to a significantly more limited
network of providers. An all too common story for beneficiaries
choosing to enroll in Medicare Advantage is losing their doctor whom
they like because they are not in network.\6\ A 2017 analysis of 391 MA
plans' physician networks found that only 22% offered broad networks
while 35% and 43% offered narrow and medium networks, respectively.\7\
On average, MA plans' networks included less than half (46%) of all
physicians in a county. Restricted networks are especially problematic
in MA, as 58% of plans in 2023 are Health Maintenance Organizations
(HMOs), which require patients to fully pay out-of-pocket (OOP) for
using any provider that is out of network.\8\
---------------------------------------------------------------------------
\6\ Philip Moeller, ``My Physician Isn't in My Medicare Advantage
Network. What Can I Do?,'' PBS NewsHour, September 6, 2017, https://
www.pbs.org/newshour/economy/physician-isnt-medicare-advantage-network-
can.
\7\ Gretchen Jacobson et al., ``Medicare Advantage: How Robust Are
Plans' Physician Networks?,'' Kaiser Family Foundation, October 5,
2017, https://www.kff.org/medicare/report/medicare-advantage-how-
robust-are-plans-physician-networks/.
\8\ Freed et al., ``Medicare Advantage 2023 Spotlight.''
In addition to restricted networks, some physicians opt out of serving
MA beneficiaries while still serving TM patients due to low
reimbursement rates. Around a month ago, two major health groups with
Scripps Health--a San Diego-based nonprofit healthcare system--dropped
their contracts with MA plans entirely.\9\ According to a 2022
Government Accountability Office (GAO) report, MA plans improperly
rejected 18% of payment denials to providers.\10\ While a growing
number of hospitals and health systems are ending their relationships
with MA plans; in comparison, only 1.1% of non-pediatric physicians
have opted out of the TM program.\11\, \12\
---------------------------------------------------------------------------
\9\ Cheryl Clark, ``Two Large Medical Groups Shun Medicare
Advantage Plans,'' MedPage Today, September 25, 2023, https://
www.medpagetoday.com/special-reports/exclusives/106483.
\10\ Christi Grimm, ``Some Medicare Advantage Organization Denials
of Prior Authorization Requests Raise Concerns About Beneficiary Access
to Medically Necessary Care'' (U.S. Department of Health and Human
Services Office of Inspector General, April 2022), https://oig.hhs.gov/
oei/reports/OEI-09-18-00260.pdf.
\11\ Jakob Emerson, ``Hospitals Are Dropping Medicare Advantage
Left and Right,'' Becker's Hospital Review, October 9, 2023, https://
www.beckershospitalreview.com/finance/hospitals-are-dropping-medicare-
advantage-left-and-right.html.
\12\ Nancy Ochieng and Gabrielle Clerveau, ``How Many Physicians
Have Opted Out of the Medicare Program?,'' Kaiser Family Foundation,
September 11, 2023, https://www.kff.org/medicare/issue-brief/how-many-
physicians-have-opted-out-of-the-medicare-program/.
Additionally, MA plans are more likely to direct patients to lower
quality providers. A 2018 study in PubMed Central (PMC) shows that MA
enrollees were more likely to be enrolled in lower quality skilled
nursing facilities compared to TM based on 32 unique quality measures
gathered by the Centers for Medicare and Medicaid Services (CMS).\13\
Similarly, a 2023 study published in JAMA found that MA enrollees are
significantly less likely to go to high quality home health agencies
(HHAs) than TM beneficiaries.\14\
---------------------------------------------------------------------------
\13\ David J. Meyers, Vincent Mor, and Momotazur Rahman, ``Medicare
Advantage Enrollees More Likely to Enter Lower-Quality Nursing Homes
Compared to Fee-for-Service Enrollees,'' Health Affairs 37, no. 1
(2018): 78-85, https://doi.org/10.1377/hlthaff.2017.0714.
\14\ Margot L. Schwartz et al., ``Quality of Home Health Agencies
Serving Traditional Medicare vs Medicare Advantage Beneficiaries,''
JAMA Network Open 2, no. 9 (September 4, 2019): e1910622, https://
doi.org/10.1001/jamanetworkopen.2019.10622.
Unlike TM, MA also hurts beneficiaries through prior authorizations and
improper denials of care. Prior authorizations deny and delay medical
care if the MA plan has not pre-approved the treatment. Thus, providers
must submit requests for approval from the MA plan, showing that the
treatment is medically necessary before helping their patient. In 2021,
providers submitted over 35 million prior authorization requests to MA
plans.\15\
---------------------------------------------------------------------------
\15\ Jeannie Fuglesten Biniek and Nolan Sroczynski, ``Over 35
Million Prior Authorization Requests Were Submitted to Medicare
Advantage Plans in 2021,'' Kaiser Family Foundation, February 2, 2023,
https://www.kff.org/medicare/issue-brief/over-35-million-prior-
authorization-requests-were-submitted-to-medicare-advantage-plans-in-
2021/.
MA plans fully or partially denied roughly 2 million or 6% of these
requests in 2021.\16\ When the denials were appealed, patients had an
82% success rate; however, only 11% of appeals were appealed in the
first place. However, the 2022 GAO report found that 13% of MA plan
denials of care met Medicare coverage rules and would have likely been
covered under TM.\17\ Therefore, while 13% of denials are improper,
only 9% of the denials are successfully appealed, meaning that Medicare
beneficiaries were denied 80,000 treatment requests they were entitled
to in 2021.
---------------------------------------------------------------------------
\16\ Ibid.
\17\ Grimm, ``Some Medicare Advantage Organization Denials of Prior
Authorization Requests Raise Concerns About Beneficiary Access to
Medically Necessary Care.''
These prior authorizations and denials of care lead not only to
heightened anxiety for Medicare beneficiaries but it directly harms the
ability for physicians to care for their patients. A 2022 survey by the
American Medical Association found that 94% of physicians reported
experiencing prior authorizations caused delays to necessary care with
56% reporting this occurring always or often.\18\ 80% of physicians
reported that prior authorizations caused the abandonment of
recommended treatment. Consequently, 33% reported that prior
authorizations caused a serious adverse event for their patients.
---------------------------------------------------------------------------
\18\ American Medical Association, ``2022 AMA Prior Authorization
(PA) Physician Survey'' (American Medical Association, February 10,
2022), https://www.ama-assn.org/system/files/prior-authorization-
survey.pdf.
One of the primary benefits marketers present to Medicare beneficiaries
about MA is the inclusion of dental, hearing, and vision benefits that
don't exist in TM. However, the general quality of care is quite poor.
For example, while around 96% of MA enrollees are in a plan that offers
some kind of dental coverage, these enrollees do not utilize dental
services more so than those in TM.\19\ This reality is likely due to
high costs. The majority of plans have very high coinsurance rates
outside of routine check-up and cleaning appointments, as the average
is around 50%, along with cost sharing for preventative care.\20\
---------------------------------------------------------------------------
\19\ Lisa Simon, Zirui Song, and Michael L. Barnett, ``Dental
Services Use: Medicare Beneficiaries Experience Immediate and Long-Term
Reductions After Enrollment: Study Examines Dental Services Use by
Medicare Beneficiaries,'' Health Affairs 42, no. 2 (February 1, 2023):
286-95, https://doi.org/10.1377/hlthaff.2021.01899.
\20\ Meredith Freed et al., ``Medicare and Dental Coverage: A
Closer Look,'' Kaiser Family Foundation, July 28, 2021, https://
www.kff.org/medicare/issue-brief/medicare-and-dental-coverage-a-closer-
look/.
Additionally, the majority of MA plans with dental coverage have an
annual cap on how much they will spend on coverage; 59% of MA patients
were in plans that would not spend more than $1,000 or less in 2021.
Similarly, most MA plans have an annual vision care limit of just $160,
and they covered only 30% of overall vision spending for MA enrollees
in 2020.\21\ For hearing care, 99% of MA enrollees are in plans with
annual dollar limits on coverage, frequency of use limits for covered
services, or both.\22\ While TM does not currently offer dental or
vision coverage, a 2022 study found that there was no significant
difference in how many MA and TM patients delayed dental and vision
care due to cost.\23\
---------------------------------------------------------------------------
\21\ Anuj Gangopadhyaya et al., ``Are Vision and Hearing Benefits
Needed in Medicare?'' (Urban Institute, November 19, 2021), https://
www.urban.org/sites/default/files/publication/105115/are-vision-and-
hearing-benefits-needed-in-medicare_1.pdf.
\22\ Meredith Freed et al., ``Dental, Hearing, and Vision Costs and
Coverage Among Medicare Beneficiaries in Traditional Medicare and
Medicare Advantage,'' Kaiser Family Foundation, September 21, 2021,
https://www.kff.org/health-costs/issue-brief/dental-hearing-and-vision-
costs-and-coverage-among-medicare-beneficiaries-in-traditional-
medicare-and-medicare-advantage/.
\23\ Rahul Aggarwal, Suhas Gondi, and Rishi K. Wadhera,
``Comparison of Medicare Advantage vs Traditional Medicare for Health
Care Access, Affordability, and Use of Preventive Services Among Adults
With Low Income,'' JAMA Network Open 5, no. 6 (June 7, 2022): e2215227,
https://doi.org/10.1001/jamanetworkopen.2022.15227.
Ultimately, while it is very problematic that shady marketers mislead
Medicare beneficiaries about network and quality issues with specific
MA plans, the existence of restricted networks, prior authorizations,
denials of care, and other methods to reduce spending on patient care
are features not bugs of MA.
MA has Never Saved Money and Rips Off Taxpayers
While one of the central tenets of MA proponents is that introducing
market competition would increase efficiency and lower costs, MA has
never yielded savings for taxpayers in comparison to TM according to
MedPAC. Thus, the privatization of Medicare MA is accelerating the
depletion of the Medicare Trust Fund rather than slowing or stopping
it.
Insurance companies are currently gaming the ``value-based'' payment
system that MA operates within.\24\ CMS uses a ``capitated'' payment
model (that is, flat, individual, per person payments) to pay for
services provided by MA. CMS claims that the capitated payments are
``value-based,'' improving the quality and cost of patient care by
incentivizing MA plans to invest in preventative care and increase the
health of patients. Whatever money they don't spend raises their profit
margins. However, this theory presupposes that the MA plans are
mission-driven and principally care about patient well-being.
---------------------------------------------------------------------------
\24\ Eileen Appelbaum, Rosemary Batt, and Emma Curchin, ``Profiting
at the Expense of Seniors: The Financialization of Home Health Care''
(Center for Economic and Policy Research, September 26, 2023), https://
cepr.net/report/profiting-at-the-expense-of-seniors-the-
financialization-of-home-health-care/.
While there are good stories of mission-driven nonprofits succeeding
within a value-based system, most beneficiaries use plans run by large,
for-profit insurers. Thus, the central aim of the for-profit insurers
behind the most-utilized, major MA plans is to make money. The
preponderance of the evidence shows just that: privatized senior care
has led to higher costs for Medicare, a drain on the Medicare trust
---------------------------------------------------------------------------
fund, and less reliable care for patients that need it.
In fact, a recent report from Physicians for a National Health Program
(PNHP), found that MA plans overcharged taxpayers between $88 billion
and $140 billion in 2022 alone.\25\ PNHP estimates that the real figure
is actually higher, as their estimate did not include various illegal
activities like outright fraud.
---------------------------------------------------------------------------
\25\ Physicians for a National Health Program, ``Our Payments Their
Profits: Quantifying Overpayments in the Medicare Advantage Program.''
According to the report, overpayments come from five principal sources:
favorable selection, favorable deselection, upcoding, benchmarks and
bonuses, and induced utilization. First, CMS pays MA plans from a
benchmark based on TM; however, MA plans target beneficiaries who are
already healthier and less costly. This resulted in $44-$56 billion in
overpayments.\26\
---------------------------------------------------------------------------
\26\ Ibid.
Favorable deselection refers to the phenomenon where MA patients who
get sick, have high needs, and/or also qualify for Medicaid have to
switch out of MA back to TM due to unreliable coverage. However,
further highlighting how MA enrollees are generally healthier than
those in TM, Medicare spent $1,253 less per beneficiary in 2016 for
those who switched from MA back to TM compared to those who remained in
TM.\27\
---------------------------------------------------------------------------
\27\ Gretchen Jacobson, Tricia Neuman, and Anthony Damico, ``Do
People Who Sign Up for Medicare Advantage Plans Have Lower Medicare
Spending?,'' Kaiser Family Foundation (blog), May 7, 2019, https://
www.kff.org/medicare/issue-brief/do-people-who-sign-up-for-medicare-
advantage-plans-have-lower-medicare-spending/.
While targeting healthier individuals, since CMS increases the size of
capitated payments per individual based on how sick they are which is
measured by a risk score, MA plans also engage in upcoding.\28\ More
specifically, MA plans have their patients receive false or irrelevant
diagnoses to increase their risk score, thus, increasing how much
taxpayer money they receive. In 2019, MA risk scores were 20% higher
than they would have been in TM. Upcoding results in around $20 billion
in overpayments according to PNHP.\29\
---------------------------------------------------------------------------
\28\ Appelbaum, Batt, and Curchin, ``Profiting at the Expense of
Seniors: The Financialization of Home Health Care.''
\29\ Physicians for a National Health Program, ``Our Payments Their
Profits: Quantifying Overpayments in the Medicare Advantage Program.''
When the federal government ordered payers to return $4.7 billion in
overpayments due to upcoding, Humana sued, alleging that the Department
of Health and Human Services (HHS) had no legal right to audit
them.\30\ The $4.7 billion actually only accounted for a portion of
total overpayments due to upcoding, as the government is letting
insurers keep fraudulently acquired taxpayer funds from before
2018.\31\
---------------------------------------------------------------------------
\30\ Rebecca Pifer, ``Humana Sues HHS over Medicare Advantage
Audits,'' Healthcare Dive, September 5, 2023, https://
www.healthcaredive.com/news/humana-sues-hhs-ma-risk-adjustment-audits/
692665/.
\31\ Center for Medicare Advocacy, ``Center for Medicare Advocacy
Statement on Recent Medicare Advantage Payment Policies and
Proposals,'' Center for Medicare Advocacy, February 3, 2023, https://
medicareadvocacy.org/center-for-medicare-advocacy-statement-on-recent-
medicare-advantage-payment-policies-and-proposals/.
MA plans also increase the amount of taxpayer money they collect by
gaming the benchmark and bonus systems created by the Affordable Care
Act. CMS uses county benchmarks to reward MA plans with rebates
depending on how much they spend relative to TM. The purpose of this
system is to incentivize and reward MA plans to expand coverage to
underserved communities; however, it currently overpays MA plans to the
tune of $8-$12 billion in 2022.\32\ Moreover, CMS also rewards MA plans
with quality bonuses through a star-rating system. However, due to
significant flaws in the quality measures, MA plans have inflated their
star ratings to receive higher rebates, leading to $16 billion in 2022
overpayments.\33\
---------------------------------------------------------------------------
\32\ Physicians for a National Health Program, ``Our Payments Their
Profits: Quantifying Overpayments in the Medicare Advantage Program.''
\33\ Ibid.
Another flaw in how CMS pays MA plans regards how MA benchmarks are not
only based on beneficiaries in TM, but they include Medicare
beneficiaries who have purchased supplemental, Medigap plans. Medigap
plans fill in the holes in coverage that TM currently does not; thus,
beneficiaries with supplemental coverage are more likely to use more
care. Including them raises the benchmark and increases the amount of
money CMS pays to MA plans; therefore, taxpayers are subsidizing
supplemental coverage for private insurers while those in TM have to
pay for it themselves. In 2022, this resulted in $36 billion in
overpayments.\34\
---------------------------------------------------------------------------
\34\ Ibid.
Ultimately, MA is a massive boon to the profits of private insurers by
allowing them to further drain the Medicare Trust Fund and take
taxpayer dollars while not actually improving the quality of coverage
for Medicare beneficiaries. MA is so profitable for insurers that
Humana, the fifth-largest health insurance company in the United
States, announced earlier this year that it will stop all of its
commercial insurance activities to solely focus its business on MA
plans.\35\, \36\
---------------------------------------------------------------------------
\35\ Stephanie Guinan, ``Largest Health Insurance Companies for
2024,'' ValuePenguin, October 2, 2023, https://www.valuepenguin.com/
largest-health-insurance-companies.
\36\ Laura Joszt, ``Humana Leaving Commercial Business, Will Focus
on Government-Funded Programs,'' AJMC, February 23, 2023, https://
www.ajmc.com/view/humana-leaving-commercial-business-will-focus-on-
government-funded-programs.
In a healthcare environment where the federal government significantly
over subsidizes private insurers who offer MA plans, it is inevitable
that these companies and marketers would employ every strategy possible
to get in on the massive profits. While we appreciate that Congress is
investigating fraudulent and deceitful marketing strategies, we ask
that Congress not only scrutinize the symptoms but the cause of
worsening healthcare coverage for seniors.
The Need to Strengthen Medicare
While MA overcharges taxpayers and offers insufficient coverage,
Medicare beneficiaries have increasingly chosen to enroll in MA plans
so that now over half take part in MA.\37\ Americans are not irrational
when making this decision, as both deficiencies in TM and CMS
overpayments to MA plans contribute to this growing reality.
---------------------------------------------------------------------------
\37\ Ochieng et al., ``Medicare Advantage in 2023.''
The cost of healthcare in the United States is extremely expensive and
continuously rising at the same time as Americans do not have
significant savings, especially the senior and disabled people who make
up the Medicare beneficiary population. In 2021, the US spent $4.3
trillion on healthcare or $12,914 per person while the average cost of
healthcare in other wealthy countries is roughly half as
much.\38\, \39\ At the same time, 37% and 57% of Americans
are not able to cover $400 and $1000 emergencies, respectively, with
cash or its equivalent.\40\, \41\
---------------------------------------------------------------------------
\38\ Centers for Medicare and Medicaid Services, ``National Health
Expenditure Data: Historical,'' CMS.gov, 2023, https://www.cms.gov/
data-research/statistics-trends-and-reports/national
-health-expenditure-data/
historical#::text=U.S.%20health%20care%20spending%20grew,spend
ing%20accounted%20for%2018.3%20percent.
\39\ Peter G. Peterson Foundation, ``Why Are Americans Paying More
for Healthcare?,'' Peter G. Peterson Foundation (blog), July 14, 2023,
https://www.pgpf.org/blog/2023/07/why-are-americans-paying-more-for-
healthcare.
\40\ The Federal Reserve, ``The Fed--Report on the Economic Well-
Being of U.S. Households in 2022--May 2023,'' Board of Governors of the
Federal Reserve System, 2023, https://www.federalreserve.gov/
consumerscommunities/sheddataviz/unexpectedexpenses.html.
\41\ Ivana Pino, ``57% of Americans Can't Afford a $1,000 Emergency
Expense, Says New Report. A Look at Why Americans Are Saving Less and
How You Can Boost Your Emergency Fund,'' Fortune Recommends, January
25, 2023, https://fortune.com/recommends/banking/57-percent-of-
americans-cant-afford-a-1000-emergency-expense/.
Thus, having sufficient health insurance that does not result in high
OOP costs is vital for millions of Americans, yet TM only covers 80% of
outpatient healthcare costs with no limit on OOP expenses.\42\
Consequently, many individuals purchase a supplemental Medigap plan to
cover the remaining 20%; but, Medigap plans can cost anywhere from $600
to over $3600 per year, which many people cannot afford.\43\
---------------------------------------------------------------------------
\42\ Medicare Rights Center, ``Outpatient Therapy: Medicare
Coverage and Costs,'' Medicare Interactive (blog), accessed October 27,
2023, https://www.medicareinteractive.org/get-answers/medicare-covered-
services/rehabilitation-therapy-services/outpatient-therapy-costs.
\43\ Lindsay Malzone, ``Average Cost of Medigap Insurance Plans,''
Medigap.com, October 5, 2023, https://www.medigap.com/faqs/average-
cost-of-medigap-insurance-plans/.
Comparatively, MA plans advertise full coverage with an average of
$18.50 in monthly premiums, and some plans have no premium at all.\44\
In addition, many MA plans include supplemental benefits not covered by
TM, such as dental, hearing, and eye care. MA plans are able to offer
such low costs due to significant subsidies and overpayments from CMS
and American taxpayers.
---------------------------------------------------------------------------
\44\ The National Council on Aging, ``What Are the Costs of
Medicare Advantage?,'' NCOA, October 18, 2023, https://www.ncoa.org/
article/what-are-the-costs-of-medicare-advantage-part-c.
In addition to cracking down on deceptive marketing for MA, we urge
Congress to strengthen TM to improve coverage, save money, and force MA
plans to increase their coverage quality rather than profiteer off
taxpayer money. While CMS overpaid MA plans $88-$140 billion (and
likely even more due to illegal, fraudulent behavior), Congress can cap
OOP costs at $5,000 for $39 billion and provide dental, hearing, and
vision coverage for $84 billion.\45\, \46\, \47\
Unlike MA enrollees, people in TM would be able to access these
benefits without restricted networks, prior authorizations, and other
methods to limit and worsen care.
---------------------------------------------------------------------------
\45\ Physicians for a National Health Program, ``Our Payments Their
Profits: Quantifying Overpayments in the Medicare Advantage Program.''
\46\ Anuj Gangopadhyaya et al., ``Adding an Out-of-Pocket Spending
Limit to Traditional Medicare'' (Urban Institute, June 6, 2022),
https://www.urban.org/research/publication/adding-out-pocket-spending-
limit-traditional-medicare.
\47\ Hannah Katch and Paul Van De Water, ``Medicaid and Medicare
Enrollees Need Dental, Vision, and Hearing Benefits,'' Center on Budget
and Policy Priorities, December 8, 2020, https://www.cbpp.org/research/
health/medicaid-and-medicare-enrollees-need-dental-vision-and-hearing-
benefits.
Furthermore, Congress can save billions of dollars by simultaneously
reining in overpayments to MA plans. According to the Committee for a
Responsible Budget, CMS could implement coding intensity adjustments to
limit overpayments, saving $198-$355 billion in Medicare spending, $32-
$57 billion in Medicare premiums, and $207-$372 billion in the federal
budget deficit all over 10 years.\48\
---------------------------------------------------------------------------
\48\ Committee for a Responsible Federal Budget, ``Reducing
Medicare Advantage Overpayments,'' Committee for a Responsible Federal
Budget, February 23, 2021, https://www.crfb.org/papers/reducing-
medicare-advantage-overpayments.
---------------------------------------------------------------------------
Conclusion
Medicare beneficiaries deserve to choose the best plan for them without
getting misled by deceptive, fraudulent advertisements by marketers on
behalf of MA plans. CEPR applauds Congress for any efforts to crack
down on this illegal and harmful behavior; however, we urge
consideration of the deeper, systemic issues within the MA program
itself. American taxpayers subsidize and overpay large, profitable
insurance companies to the tune of billions of dollars to provide
limited, restrictive health coverage that is unreliable when Medicare
beneficiaries need it most. At the same time, Congress could reallocate
funds, save money, and improve coverage for senior and disabled
Americans by improving TM and reducing overpayments to MA plans.
References
Aggarwal, Rahul, Suhas Gondi, and Rishi K. Wadhera. ``Comparison of
Medicare Advantage vs Traditional Medicare for Health Care
Access, Affordability, and Use of Preventive Services Among
Adults With Low Income.'' JAMA Network Open 5, no. 6 (June 7,
2022): e2215227. https://doi.org/10.1001/jama
networkopen.2022.15227.
American Medical Association. ``2022 AMA Prior Authorization (PA)
Physician Survey.'' American Medical Association, February 10,
2022. https://www.ama-assn.org/system/files/prior-
authorization-survey.pdf.
Appelbaum, Eileen, Rosemary Batt, and Emma Curchin. ``Profiting at the
Expense of Seniors: The Financialization of Home Health Care.''
Center for Economic and Policy Research, September 26, 2023.
https://cepr.net/report/profiting-at-the-expense-of-seniors-
the-financialization-of-home-health-care/.
Biniek, Jeannie Fuglesten, and Nolan Sroczynski. ``Over 35 Million
Prior Authorization Requests Were Submitted to Medicare
Advantage Plans in 2021.'' Kaiser Family Foundation, February
2, 2023. https://www.kff.org/medicare/issue-brief/over-35-
million-prior-authorization-requests-were-submitted-to-
medicare-advantage-plans-in-2021/.
Center for Medicare Advocacy. ``Center for Medicare Advocacy Statement
on Recent Medicare Advantage Payment Policies and Proposals.''
Center for Medicare Advocacy, February 3, 2023. https://
medicareadvocacy.org/center-for-medicare-advocacy-statement-on-
recent-medicare-advantage-payment-policies-and-proposals/.
Centers for Medicare and Medicaid Services. ``National Health
Expenditure Data: Historical.'' CMS.gov, 2023. https://
www.cms.gov/data-research/statistics-trends-and-reports/
national-health-expenditure-data/historical#::text=U.S.%20
health%20care%20spending%20grew,spending%20accounted%20for%2018.
3%20
percent.
Clark, Cheryl. ``Two Large Medical Groups Shun Medicare Advantage
Plans.'' MedPage Today, September 25, 2023. https://
www.medpagetoday.com/special-reports/exclusives/106483.
Committee for a Responsible Federal Budget. ``Reducing Medicare
Advantage Overpayments.'' Committee for a Responsible Federal
Budget, February 23, 2021. https://www.crfb.org/papers/
reducing-medicare-advantage-overpayments.
Emerson, Jakob. ``Hospitals Are Dropping Medicare Advantage Left and
Right.'' Becker's Hospital Review, October 9, 2023. https://
www.beckershospital
review.com/finance/hospitals-are-dropping-medicare-advantage-
left-and-right.
html.
Freed, Meredith, Jeannie Fuglesten Biniek, Anthony Damico, and Tricia
Neuman. ``Medicare Advantage 2023 Spotlight: First Look.''
Kaiser Family Foundation, November 10, 2022. https://
www.kff.org/medicare/issue-brief/medicare-advantage-2023-
spotlight-first-look/.
Freed, Meredith, Juliette Cubanski, Nolan Sroczynski, Nancy Ochieng,
and Tricia Neuman. ``Dental, Hearing, and Vision Costs and
Coverage Among Medicare Beneficiaries in Traditional Medicare
and Medicare Advantage.'' Kaiser Family Foundation, September
21, 2021. https://www.kff.org/health-costs/issue-brief/dental-
hearing-and-vision-costs-and-coverage-among-medicare-
beneficiaries-in-traditional-medicare-and-medicare-advantage/.
Freed, Meredith, Nancy Ochieng, Nolan Sroczynski, Anthony Damico, and
Krutika Amin. ``Medicare and Dental Coverage: A Closer Look.''
Kaiser Family Foundation, July 28, 2021. https://www.kff.org/
medicare/issue-brief/medicare-and-dental-coverage-a-closer-
look/.
Gangopadhyaya, Anuj, John Holahan, Bowen Garrett, and Adele Shartzer.
``Adding an Out-of-Pocket Spending Limit to Traditional
Medicare.'' Urban Institute, June 6, 2022. https://
www.urban.org/research/publication/adding-out-pocket-spending-
limit-traditional-medicare.
Gangopadhyaya, Anuj, Adele Shartzer, Bowen Garrett, and John Holahan.
``Are Vision and Hearing Benefits Needed in Medicare?'' Urban
Institute, November 19, 2021. https://www.urban.org/sites/
default/files/publication/105115/are-vision-and-hearing-
benefits-needed-in-medicare_1.pdf.
Grimm, Christi. ``Some Medicare Advantage Organization Denials of Prior
Authorization Requests Raise Concerns About Beneficiary Access
to Medically Necessary Care.'' U.S. Department of Health and
Human Services Office of Inspector General, April 2022. https:/
/oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
Guinan, Stephanie. ``Largest Health Insurance Companies for 2024.''
ValuePenguin, October 2, 2023. https://www.valuepenguin.com/
largest-health-insurance-companies.
Jacobson, Gretchen, Tricia Neuman, and Anthony Damico. ``Do People Who
Sign Up for Medicare Advantage Plans Have Lower Medicare
Spending?'' Kaiser Family Foundation (blog), May 7, 2019.
https://www.kff.org/medicare/issue-brief/do-people-who-sign-up-
for-medicare-advantage-plans-have-lower-medicare-spending/.
Jacobson, Gretchen, Matthew Rae, Tricia Neuman, Kendal Orgera, and
Cristina Boccuti. ``Medicare Advantage: How Robust Are Plans'
Physician Networks?'' Kaiser Family Foundation, October 5,
2017. https://www.kff.org/medicare/report/medicare-advantage-
how-robust-are-plans-physician-networks/.
Joszt, Laura. ``Humana Leaving Commercial Business, Will Focus on
Government-Funded Programs.'' AJMC, February 23, 2023. https://
www.ajmc.com/view/humana-leaving-commercial-business-will-
focus-on-government-funded-programs.
Katch, Hannah, and Paul Van De Water. ``Medicaid and Medicare Enrollees
Need Dental, Vision, and Hearing Benefits.'' Center on Budget
and Policy Priorities, December 8, 2020. https://www.cbpp.org/
research/health/medicaid-and-medicare-enrollees-need-dental-
vision-and-hearing-benefits.
Lipschutz, David. ``Senate Finance Committee Holds Hearing on Medicare
Advantage Marketing Misconduct.'' Center for Medicare Advocacy,
October 19, 2023. https://medicareadvocacy.org/senate-finance-
committee-holds-hearing-on-medicare-advantage-marketing-
misconduct/.
Majority Staff of the U.S. Senate Committee on Finance. ``Deceptive
Marketing Practices Flourish in Medicare Advantage.'' U.S.
Senate, November 2, 2022. https://www.finance.senate.gov/imo/
media/doc/Deceptive%20Marketing%20
Practices%20Flourish%20in%20Medicare%20Advantage.pdf.
Malzone, Lindsay. ``Average Cost of Medigap Insurance Plans.''
Medigap.com, October 5, 2023. https://www.medigap.com/faqs/
average-cost-of-medigap-insurance-plans/.
Medicare Rights Center. ``Outpatient Therapy: Medicare Coverage and
Costs.'' Medicare Interactive (blog). Accessed October 27,
2023. https://www.
medicareinteractive.org/get-answers/medicare-covered-services/
rehabilitation-therapy-services/outpatient-therapy-costs.
Meyers, David J., Vincent Mor, and Momotazur Rahman. ``Medicare
Advantage Enrollees More Likely to Enter Lower-Quality Nursing
Homes Compared to Fee-for-Service Enrollees.'' Health Affairs
37, no. 1 (2018): 78-85. https://doi.org/10.1377/
hlthaff.2017.0714.
Moeller, Philip. ``My Physician Isn't in My Medicare Advantage Network.
What Can I Do?'' PBS NewsHour, September 6, 2017. https://
www.pbs.org/newshour/economy/physician-isnt-medicare-advantage-
network-can.
Ochieng, Nancy, Jeannie Fuglesten Biniek, Meredith Freed, Anthony
Damico, and Tricia Neuman. ``Medicare Advantage in 2023:
Enrollment Update and Key Trends.'' Kaiser Family Foundation,
August 9, 2023. https://www.kff.org/medicare/issue-brief/
medicare-advantage-in-2023-enrollment-update-and-key-
trends/.
Ochieng, Nancy, and Gabrielle Clerveau. ``How Many Physicians Have
Opted Out of the Medicare Program?'' Kaiser Family Foundation,
September 11, 2023. https://www.kff.org/medicare/issue-brief/
how-many-physicians-have-opted-out-of-the-medicare-program/.
Peter G. Peterson Foundation. ``Why Are Americans Paying More for
Healthcare?'' Peter G. Peterson Foundation (blog), July 14,
2023. https://www.pgpf.org/blog/2023/07/why-are-americans-
paying-more-for-healthcare.
Physicians for a National Health Program. ``Our Payments Their Profits:
Quantifying Overpayments in the Medicare Advantage Program.''
Physicians for a National Health Program, October 4, 2023.
https://pnhp.org/system/assets/uploads/2023/09/
MAOverpaymentReport_Final.pdf.
Pifer, Rebecca. ``Humana Sues HHS over Medicare Advantage Audits.''
Healthcare Dive, September 5, 2023. https://
www.healthcaredive.com/news/humana-sues-hhs-ma-risk-adjustment-
audits/692665/.
Pino, Ivana. ``57% of Americans Can't Afford a $1,000 Emergency
Expense, Says New Report. A Look at Why Americans Are Saving
Less and How You Can Boost Your Emergency Fund.'' Fortune
Recommends, January 25, 2023. https://fortune.com/recommends/
banking/57-percent-of-americans-cant-afford-a-1000-emergency-
expense/.
Schwartz, Margot L., Cyrus M. Kosar, Tracy M. Mroz, Amit Kumar, and
Momotazur Rahman. ``Quality of Home Health Agencies Serving
Traditional Medicare vs Medicare Advantage Beneficiaries.''
JAMA Network Open 2, no. 9 (September 4, 2019): e1910622.
https://doi.org/10.1001/jamanetworkopen.2019.10622.
Simon, Lisa, Zirui Song, and Michael L. Barnett. ``Dental Services Use:
Medicare Beneficiaries Experience Immediate And Long-Term
Reductions After Enrollment: Study Examines Dental Services Use
by Medicare Beneficiaries.'' Health Affairs 42, no. 2 (February
1, 2023): 286-95. https://doi.org/10.1377/hlthaff.2021.01899.
The Federal Reserve. ``The Fed--Report on the Economic Well-Being of
U.S. Households in 2022--May 2023.'' Board of Governors of the
Federal Reserve System, 2023. https://www.federalreserve.gov/
consumerscommunities/sheddataviz/unexpectedexpenses.html.
The National Council on Aging. ``What Are the Costs of Medicare
Advantage?'' NCOA, October 18, 2023. https://www.ncoa.org/
article/what-are-the-costs-of-medicare-advantage-part-c.
______
Center for Medicare Advocacy
P.O. Box 350
Willimantic, CT 06226
11 Ledgebrook Drive
Mansfield, CT 06250
(860) 456-7790
MedicareAdvocacy.org
Statement Submitted by David Lipschutz,
Associate Director/Senior Policy Attorney
Overview
The Center for Medicare Advocacy (the Center) is a national, non-profit
law organization that works to ensure access to comprehensive Medicare,
health equity, and quality healthcare. The organization provides
education, legal assistance, research and analysis on behalf of older
people and people with disabilities, particularly those with long-term
conditions. The Center's policy positions are based on its experience
assisting thousands of individuals and their families with Medicare
coverage and appeal issues. Additionally, the Center provides
individual legal assistance and, when necessary, challenges patterns
and practices that inappropriately deny access to Medicare and
necessary care. We appreciate the opportunity to submit this written
testimony for the record.
The Center applauds the Senate Finance Committee for holding a hearing
focusing on marketing abuses surrounding the sale of Medicare Advantage
(MA) plans. In November 2022, the Senate Finance Committee issued a
report \1\ titled ``Deceptive Marketing Practices Flourish in Medicare
Advantage'' which ``found evidence that beneficiaries are being
inundated with aggressive marketing tactics as well as false and
misleading information.'' More recently, reports by KFF \2\ and
Commonwealth Fund \3\ show that during last year's open enrollment
period, 85% of Medicare-related ads focused on MA plans, three-quarters
of Medicare beneficiaries faced daily TV or online ads, and 1 in 3
reported receiving 7 or more unsolicited phone calls per week. Lower
income individuals were more likely be to subject to ``advertising
information that was later found to be untrue'' and a larger share of
Black adults than White adults reported unsolicited calls.
---------------------------------------------------------------------------
\1\ https://www.finance.senate.gov/imo/media/doc/
Deceptive%20Marketing%20Practices%20
Flourish%20in%20Medicare%20Advantage.pdf.
\2\ https://www.kff.org/medicare/report/how-health-insurers-and-
brokers-are-marketing-medicare/.
\3\ https://www.commonwealthfund.org/publications/issue-briefs/
2023/sep/private-plan-pitch-seniors-experiences-medicare-marketing-
advertising.
Amidst this onslaught of marketing promoting enrollment into MA plans,
most people with Medicare are not making informed decisions about their
health care coverage. According to KFF 's analysis \4\ of MA marketing:
---------------------------------------------------------------------------
\4\ https://www.kff.org/medicare/press-release/kff-research-shows-
that-medicare-open-enrollment-tv-ads-are-dominated-by-medicare-
advantage-plans-featuring-celebrities-active-and-fit-seniors-and-
promises-of-savings-and-extra-benefits-without-fund/.
Ads rarely mentioned traditional Medicare, or potential
limitations with plan coverage, such as provider networks or
prior authorization requirements, leaving beneficiaries with an
incomplete view of their coverage options and the tradeoffs
---------------------------------------------------------------------------
among them.
There are many things that Congress and the Centers for Medicare &
Medicaid Services (CMS) can and should do to address Medicare Advantage
problems, including marketing misconduct. The Center supports all of
recommendations from November 2022 Committee report, in particular
shoring up the State Health Insurance Assistance (SHIPs) and addressing
agent/broker commissions, as discussed below. But larger systemic
issues plaguing Medicare Advantage also demand broad, systemic
solutions.
Policy Suggestions to Address Medicare Advantage Marketing Misconduct
Rein in Wasteful Overpayments to MA Plans
One of the major drivers of marketing misconduct is the massive
financial incentives for insurance companies to maximize enrollment in
their most profitable products and, in turn, the corresponding
incentives of those who sell these products. As mentioned by Senators
Stabenow and Warren at the hearing, MA plans are paid at a higher rate
than the traditional Medicare program spends on a given beneficiary.
While estimates of the extent of MA overpayments vary, such wasteful
payment is receiving more attention from both the media and
policymakers. While the Medicare Payment Advisory Commission (MedPAC)
estimates wasteful overpayments to be almost $27 billion in 2023,\5\ as
noted in a CMA Alert (August 3, 2023),\6\ in July 2023 the Committee
for a Responsible Federal Budget (CRFB) posted research suggesting that
MA plans might be overpaid by between $180 billion and $1.6 trillion
over the next decade. More recently, as discussed in another CMA Alert
(October 5, 2023),\7\ Physicians for a National Health Program (PNHP)
released a report stating that MA plans are overpaid by as much as $140
billion a year.
---------------------------------------------------------------------------
\5\ https://www.medpac.gov/wp-content/uploads/2023/03/
ExecutiveSummary_Mar23_Med
PAC_Report_To_Congress_SEC.pdf.
\6\ https://medicareadvocacy.org/policymakers-must-address-
medicare-advantage-abuses/.
\7\ https://medicareadvocacy.org/new-study-medicare-advantage-
overpayments-as-high-as-140-billion-a-year/.
---------------------------------------------------------------------------
Strengthening Traditional Medicare
These wasteful overpayments allow MA plans to offer extra benefits that
are used to entice people while distracting from more important
considerations. Not only do such wasteful overpayments put strain on
Medicare's finances, they crowd out coverage expansion in traditional
Medicare program. Congress should rein in wasteful MA overpayments and
use them to both shore up Medicare's finances and add benefits to
traditional Medicare--such as dental, hearing and vision coverage--
which would accrue to all Medicare beneficiaries, including those who
choose to enroll in MA plans. Adding these benefits, as well as an out-
of-pocket cap, would help level the playing field between MA and
traditional Medicare, and allow for a true choice of coverage options.
Due to extra money to offer extra benefits, and massive insurance
company marketing budgets aimed to maximizing enrollment into MA plans,
today, the deck is stacked in favor of enrollment into Medicare
Advantage. This disparity is exacerbated by the lack of freedom of
movement between coverage options. Free movement between types of
Medicare coverage must be made more fair and equitable. This includes
expanding federal Medigap rights beyond the current rules, which
generally do not require Medigap companies to sell a policy to someone
who disenrolls from an MA plan after a year of being in such a plan.
Similarly, there are unequal rights to move in and out of MA plans vs.
stand-alone Part D plans (PDPs). The Medicare Advantage Open Enrollment
Period (MA-OEP) allows someone to make changes to their coverage during
the first 3 months of the calendar year if they began the year with MA
coverage. No similar right exists for individuals in traditional
Medicare and PDPs. As Senator Grassley suggested during the hearing,
there should be a corresponding right for enrollment in PDPs.
Strengthen Oversight and Enforcement
With more than half of the Medicare population now enrolled in MA
plans, it is unclear if CMS' resources and staff have been allocated
accordingly in order to provide necessary regulatory oversight and
enforcement. Congress should invest additional funding in the agency's
oversight, and provide CMS with additional tools to hold plans
accountable, including enhanced enforcement measures such as higher
civil monetary penalties and more meaningful sanctions, including the
ability to terminate plan contracts due to misconduct. Further, CMS
should work more closely with state departments of insurance and the
National Association of Insurance Commissioners (NAIC) to ensure that
agents, brokers, and plan sponsors are held accountable for misconduct.
Foster Informed Decision-Making
In order to assist Medicare beneficiaries to make fully informed
decisions about their coverage options in a more consumer-friendly
manner and without undue pressure from agents and brokers, Congress and
CMS should work to reform agent/broker commissions, standardize and
limit plan offerings, and better support the SHIP network.
Reform Commissions Paid to Agents and Brokers
During the hearing, Ms. Hogland, CEO of Security Health Plan, testified
about how the lure of ``add-on payments'' available to agents and
brokers can negatively impact enrollment in small, regional health
plans. The Center agrees that additional payments to agents and brokers
beyond commissions are problematic and further skew enrollment towards
certain MA plans. For example, we discussed plan sponsor incentive
payments, health assessments and the sale of ancillary health products
in CMA Alerts last fall.\8\ Add-on payments to agents/brokers should be
prohibited. MA plans should not be able to provide additional
compensation to agents and brokers to complete health risk assessments,
which further incentivizes agents and brokers to sell MA over other
products.
---------------------------------------------------------------------------
\8\ See https://medicareadvocacy.org/ma-misconduct/ and https://
medicareadvocacy.org/ma-and-selling-extra-products/.
As noted in our CMA Alert summarizing the hearing, what was not
discussed, however, was the disparate commission rates paid for MA
enrollments vs. other Medicare products, such as Part D plans and
Medigaps. As noted in a February 2023 Commonwealth Fund report,\9\
agents and brokers report being paid more to enroll people in MA than
in traditional Medicare, by some reports three times as much. Payments
are also higher for new enrollments as opposed to renewals, which
incentivizes churning of enrollment. When it comes to Part D, agents
report that a lot of carriers don't pay at all for Part D enrollments.
Overall, ``[c]ommissions for stand-alone Part D plans were viewed as
too low and not worth the time.'' Further, ``[a]ll brokers and agents
who have served people dually eligible for Medicare and Medicaid said
they enroll them in Special Needs Plans only.'' The report also
highlighted extra income that agents can earn from conducting
beneficiary health risk assessments and bonus payments for reaching
enrollment benchmarks.
---------------------------------------------------------------------------
\9\ https://www.commonwealthfund.org/publications/2023/feb/
challenges-choosing-medicare-coverage-views-insurance-brokers-agents.
In addition to the financial incentives insurance companies have to
maximize profitable enrollment in MA plans, skewed commissions and
other payment incentives drive agents and brokers to push people
towards MA plans and away from traditional Medicare. Thus, we urge that
agent and broker commissions for MA and Part D plans be equalized.
Further, agents and brokers should be required to disclose any and all
commissions they receive for the sale of a Medicare product to
prospective enrollees.
Standardize MA Benefits and Limit Plan Offerings
In order to make it easier to make meaningful choices among plans,
Congress should explore standardizing MA plan benefits, and should
limit the number of plans offered per sponsor in a given area. Further,
CMS should reinstate meaningful difference requirements with respect to
multiple plans offered by the same sponsor.
Invest Further in SHIPs
The nationwide State Health Insurance and Assistance Program (SHIP) is
a critical source of unbiased information about the Medicare program
and coverage options, yet the SHIP network cannot compete for attention
with MA marketing and agents and brokers seeking commissions. As
suggested in the Committee's November 2022 report, the SHIP network
must be strengthened. More recently, Senator Menendez suggested at the
hearing that proving more resources to SHIPs might help; similarly,
Senator Casey noted that SHIPs might not have the resources they need.
Close Current Loopholes in Medicare Marketing Rules
CMS has made significant improvements in marketing rules in recent
regulatory updates. Notably, the final Part C & D rule for 2024 brings
some needed consumer protections.\10\ But this work is not done--more
is needed in order to adequately protect Medicare beneficiaries from
unwanted, often misinforming, and sometimes harassing sales pitches.
Among other things, CMS should:
---------------------------------------------------------------------------
\10\ See, e.g., a summary of these rules in a CMA Special Report:
https://medicareadvocacy.org/c-and-d-rule-2023/.
Prohibit contacts due to pre-existing relationships (from both
agents/brokers and insurance plans--e.g., Part D plan sponsor calling a
current enrollee to convince them to enroll in same sponsor's MA
product)
CMS did tighten rules re: opt-out from contact
but didn't go far enough--We often hear about individuals
enrolled in a stand-alone Part D plan being contacted by the
plan sponsor in an attempt to get the individual to switch to
one of the sponsor's Medicare Advantage products. This is not a
solicited contact, rather it is a cold call, and has nothing to
do with the provision of care or benefits of an individuals'
current coverage, and therefore should be prohibited. In other
words, CMS should prohibit plan sponsors from calling current
members to discuss Medicare products. At the very least,
members should be able to opt-in to receiving such contact
rather than having to actively opt-out under current rules
(even if they are notified at least annually under CMS'
proposal).
CMS proposed 6 month time period limit for
contact after Scope of Appointment (SOA) or Business Reply Card
(BRC) filled out, they finalized a 12 month period--this should
be shorted to 3 months, or the current enrollment period.
Prohibit cross-selling of other health related products during
the sale of MA and Part D plans
In marked contrast to the proclamations of the
insurance industry, many of the same people selling Medicare
Advantage products both highlight and rely upon MA products'
shortcomings in order to promote the sale of ancillary
products.\11\
---------------------------------------------------------------------------
\11\ See, e.g., CMA Alert: https://medicareadvocacy.org/ma-and-
selling-extra-products/.
---------------------------------------------------------------------------
Under current Medicare marketing rules, MA
organizations may not ``Market non-health care related products
to prospective enrollees during any MA sales activity or
presentation. This is considered cross-selling and is
prohibited.'' 42 CFR Sec. 422.2263 (b)(4). This limited
regulation has such a limited definition of ``cross-selling''
that it allows a broad range of exploitative behavior,
including the sale of ancillary health products during MA
sales.
Prohibit collection of Business Reply Cards (BRCs) or other
information during educational events
Direct CMS to revisit distinction between ``marketing'' and
``communications'' and corresponding requirements--we disagree with the
agency's assertion that documents which may impact an enrollment
decision, but are not intended to do so, don't qualify as marketing
documents. If a beneficiary uses a plan-issued document to make
enrollment choices, the sponsor's intent is irrelevant. Plan- and
agent/broker-issued content should be subject to stringent oversight by
CMS to ensure accuracy and readability.
Address Marketing of supplemental benefits, particularly SSBCI
that might not be available to everyone in a given plan
We have heard from SHIP programs that in some
areas, the top issue that drove people to seek SHIP counseling
during the last annual enrollment period were plan-issued debit
cards, or flex card benefits--people demanded to be enrolled in
the plan that offered the most money, without regard to any
other considerations. One example provided by a SHIP counselor
concerned a client who was convinced to look at issues in
addition to debit card she wanted, and discovered that none of
the five providers she was currently seeing were in network of
the plan that offered the highest value debit card she sought.
At the beginning of the year, the same SHIP programs report
that one of the top issues they have heard about concern how
such debit or flex cards don't, in fact, work as the
beneficiary was led to believe by the plan or agent/broker.
Further strengthen new requirements re: explaining the effect of
an individual's enrollment choice on current coverage
Pre-Enrollment Checklist (PECL)--needs to address
prior authorization; needs to inform bene that providers can
leave/be terminated from network mid-year; should be an
articulation of right to seek care outside of a plan's network
when an in-network providers or benefits is unavailable or
inadequate to meet an enrollees' medical needs.
Require that agents and brokers sign an attestation form that
whatever product is being sold is appropriate for that beneficiary.
Such an attestation is currently required for the sale of Medigap
(Medicare supplemental insurance policies).
Finalize the rule (proposed, but not finalized in the 2024 C&D
rule) that personal beneficiary data collected by a TPMO may not be
distributed to other TPMOs.
Increase Transparency and Strengthen Reporting Requirements
Require Medicare to collect and publicly report more information about
how people access their MA benefits, including denials and delays in
care. As Senator Bennet suggested during the hearing, access to
information about plan denial rates would help with beneficiary
decision-making.
KFF issued a report \12\ in 2023 that highlights data gaps--both in
information that CMS collects but does not report, as well as
information that is not required to be reported by MA plans. This
report should be used as a roadmap for additional, required reporting
requirements by plans relating to information that should be publicly
available, including:
---------------------------------------------------------------------------
\12\ https://www.kff.org/medicare/issue-brief/gaps-in-medicare-
advantage-data-limit-transparency-in-plan-performance-for-policymakers-
and-beneficiaries/.
What share of Medicare Advantage enrollees use supplemental
benefits offered by their plan and how does use vary by race/ethnicity,
income, or health condition?
What services and subgroups of enrollees, such as those with
specific health conditions, have the highest prior authorization denial
rates?
Reason for prior authorization denials--Do certain insurers
attribute denials of prior authorization requests to medical necessity
more often than others?
Do certain insurers respond to prior authorization requests more
quickly?
How often do Medicare Advantage insurers deny payments for
Medicare-covered services?
We appreciate the opportunity to submit this written testimony. For
additional information, please contact David Lipschutz, Senior Policy
Attorney, dlipschutz@
MedicareAdvocacy.org at 202-293-5760.
______
Commonwealth Care Alliance
30 Winter Street
Boston, MA 02108
Chairman Wyden, Ranking Member Crapo, and members of the Committee,
thank you for the opportunity to submit testimony for the Senate
Finance Committee's recent hearing on October 18, 2023 entitled
``Medicare Advantage Annual Enrollment: Cracking Down on Deceptive
Practices and Improving Senior Experiences.''
Commonwealth Care Alliance (CCA) is a mission-driven healthcare
services organization that offers high-quality Medicare Advantage
health plans and care delivery programs designed for individuals with
significant needs. With offerings in Massachusetts, Rhode Island,
Michigan, and California, CCA delivers comprehensive, integrated, and
person-centered care by coordinating the services of local staff,
provider partners, and community organizations. CCA's model is
consistently recognized as one of the best in the country at managing
whole-person care across the continuum, including full integration of
primary and acute care, behavioral health, long-term services and
supports (LTSS), and services that address health-related social needs.
We advocate for equitable and cost-effective policies that lead to
high-quality health care for individuals who need it most.
CCA strongly supports efforts to improve oversight, ensure that
beneficiaries have the best information available and limit dishonest
plan marketing practices (e.g., prohibiting certain deceptive marketing
activities, ensuring third party marketing organizations (TPMOs)
provide more complete information and modifying the TPMO disclaimer).
As we explained in our response to the proposals set forth in CMS'
Contract Year 2024 Medicare Advantage and Part D proposed rule (87 FR
79452), we applauded steps taken to meaningfully improve beneficiary
protections, such as prohibiting misleading advertising that causes
enrollee confusion and abrasion, disallowing contact at home unless an
appointment at the time and place was previously scheduled and making
improvements to the pre-enrollment checklist (PECL).
However, we also urged caution, as certain policies could inadvertently
hinder beneficiaries' ability to make informed decisions about their
coverage, as well as disproportionally impact smaller plans committed
to and focused on serving those beneficiaries. For example, we
recommended CMS not finalize their proposal to require an agent or
broker obtain a Scope of Appointment (SOA) form at least 48 hours prior
to a personal marketing appointment as it could create an additional,
unnecessary barrier to enrollment for some higher-need members who may
have mobility or transportation issues, require assistance from
caregivers who may have other priorities and other obstacles such as
inflexible work schedules. These challenges can make scheduling future
appointments particularly burdensome. Additionally, individuals who
elected to sign a paper SOA, due to either low digital health literacy
or discomfort with signing an electronic SOA, would have been required
to wait an additional 48 hours before having a conversation with the
agent or broker who might already be at the person's home.
Further, while we agree that appropriate monitoring and oversight is
critical to ensure agent and broker compliance, we believe such
activities should be the shared responsibility of the TPMO, Medicare
Advantage organization and CMS collectively. Requiring Medicare
Advantage plans alone to bear the burden of implementing such a program
for each entity with which they work is prohibitively burdensome,
especially for smaller, community-based plans like CCA.
We look forward to working with the Committee to ensure the bill
addresses potentially deceptive marketing practices while also
preserving beneficiary access to necessary education and enrollment
support as well as protecting small, not-for-profit plans such as CAA.
Finally, as the Committee explores oversight of the Medicare Advantage
program as a whole, we encourage you to continue to keep in mind the
needs and resource availability of smaller, not-for-profit health plans
like CCA. It is critical to examine the potential consequences of
policy changes that could limit community-based plans' ability to
provide robust, person-centered coverage or prohibit them from
competing in the Medicare Advantage market. Smaller, safety-net plans
such as CCA work every day to provide a high-quality product for some
of the most vulnerable Medicare beneficiaries, and we thank the
Committee for drafting policies that support this important work.
______
The Commonwealth Fund
1 East 75th Street
New York, NY 10021
212-606-3800
https://www.commonwealthfund.org/
Statement of Gretchen Jacobson, Ph.D.,
Vice President, Medicare
Chair Wyden and Ranking Member Crapo,
Thank you for the opportunity to submit a statement for the record
regarding your October 18th hearing on Medicare Advantage annual
enrollment and marketing practices.
The Commonwealth Fund is a nonprofit, nonpartisan foundation dedicated
to affordable, quality health care for everyone. We support independent
research on health care issues and make grants to promote better
access, improved quality, and greater efficiency in health care,
particularly for society's most underserved communities.
My comments draw from Commonwealth Fund-supported research on
consumers' experiences with Medicare marketing, advertising, and
enrollment, the information used to make coverage choices, and
perspectives of brokers and agents.
Views from Insurance Brokers and Agents on the Challenges of Choosing
Medicare Coverage
Insurance brokers and agents are prominent sources of help for
beneficiaries making coverage decisions. However, beneficiaries lack
information about how brokers and agents winnow down plan options and
what role financial incentives might play in the advice they give.
In September 2022, the Commonwealth Fund supported PerryUndem to hold
four focus groups with more than 2 dozen brokers and agents who sell
Medicare Advantage plans, Medigap supplemental coverage plans, and Part
D prescription drug plans with representation in a variety of U.S.
states. We sought to learn their perspectives on the state of coverage
choices, the challenges their clients face in choosing an option, and
the ways in which their financial incentives align or conflict with
beneficiaries' interests. The following insights emerged from those
discussions.
Medicare Brokers' and Agents' Financial Incentives
Most brokers and agents said they are compensated more to enroll
people in Medicare Advantage plans than Medigap plans for traditional
Medicare. In focus group interviews, brokers and agents shared that
Medicare Advantage plans generally provide more compensation than
Medigap plans, and that compensation for selling Part D plans (PDPs) is
relatively low or not provided at all. However, the brokers and agents
said that relative compensation can differ for new enrollments versus
renewals.
Brokers and agents said the commission structure of Medigap
plans incentivizes the sale of plans charging high premiums. This may
result in some beneficiaries paying more for coverage than they need or
want to.
Commissions for standalone Part D plans were viewed as too low
and not worth the time--creating some problems for beneficiaries and
unique issues for people dually eligible for Medicare and Medicaid. CMS
sets a maximum for Part D commissions but not a minimum. Low
compensation--or even none--deters brokers from initiating or
reevaluating Part D coverage for clients. The low commissions for Part
D plans also mean that the only way brokers and agents are compensated
for discussions with people dually eligible for Medicare and Medicaid
is if the broker enrolls them into a Medicare Advantage plan since
people dually eligible typically cannot afford to purchase a Medigap
plan.
Brokers and agents said they can earn extra income from
conducting beneficiary health risk assessments during the Medicare
Advantage enrollment process. The brokers and agents did not know how
the risk assessments were used. It is unclear if the assessment is
provided to beneficiaries' primary care physicians or used to inform
beneficiaries' care management or receipt of additional resources and
benefits.
Brokers and agents said insurers commonly provide them bonus
payments for reaching enrollment benchmarks, which can create
incentives for brokers and agents to steer clients to a certain plan,
even if it may not be the best one for their needs.
Challenges Faced by Beneficiaries
Some brokers and agents said clients have trouble getting
Medigap plans when trying to switch from Medicare Advantage to
traditional Medicare. Extensive underwriting was noted by brokers and
agents as a frequent barrier to purchasing a Medigap plan among
beneficiaries looking to switch from Medicare Advantage to traditional
Medicare outside of the ``guaranteed issue'' period. Older or sicker
beneficiaries may face higher rates or be denied coverage altogether by
a Medigap plan.
All brokers and agents who have served people dually eligible
for Medicare and Medicaid said they only enroll them in Special Needs
Plans for people dually eligible (D-SNPs). Dually eligible
beneficiaries have a range of coverage options available to them,
including other types of SNPs, other Medicare Advantage plans,
traditional Medicare, PACE plans, and
Medicare-Medicaid plans. Funneling all clients to D-SNPs raises
questions about whether brokers and agents are incentivized to offer
other coverage options that may be a better fit for some dually
eligible people, a population with diverse and significant health
needs. Are they equipped with the information to help their clients
weigh those options? Are they incentivized to do so?
Brokers generally don't sell all plans in their geographic area.
They said that they choose which plans to offer based on how quickly
insurers answer their questions, the feedback they receive from
clients, and sometimes on plan benefits. Brokers and agents are not
required to contract with all available plans in an area, nor are they
required to offer all plans to beneficiaries. Beginning in 2022,
brokers and agents who don't offer all plans in an area are required to
disclose that fact to their clients--though they are not required to
disclose what proportion of plans in the area they sell, or how their
compensation differs across plans.
Most brokers and agents said they personally would choose
traditional Medicare and Medigap over a Medicare Advantage plan. A few
thought that Medicare Advantage would be fine for their needs, but most
said that traditional Medicare with Medigap would offer better health
care coverage and choices--particularly as people age.
Drivers of Growth in Medicare Advantage Enrollment
According to brokers and agents, rising Medigap premiums are
driving some beneficiaries to choose Medicare Advantage. Brokers noted
more significant increases in Medigap plan premiums in recent years,
compared to historical trends.
Marketing efforts have led to beneficiary confusion and helped
drive enrollment in Medicare Advantage, according to brokers and
agents. In some instances, ads led some clients to enroll in plans that
excluded their doctors from the provider network and others to
unknowingly change plans. Brokers and agents said Medicare plan
advertising requires them to spend a lot of time resetting client
expectations. In some cases, they even lose clients who don't believe
them or want everything the ads promise.
Some brokers and agents said that, based on relative commission
rates and information from CMS, it seemed to them as if the federal
government wants more people to be in Medicare Advantage plans.
To better align brokers' incentives with beneficiaries' interests,
policymakers could consider:
Setting commissions to ensure that agents are not financially motivated
to favor a particular type of coverage and can provide beneficiaries
unconflicted advice.
Ensuring that brokers and agents are compensated for helping
beneficiaries with their Part D coverage. Providing higher Part D
commissions would help to balance the total compensation from helping
beneficiaries in traditional Medicare versus Medicare Advantage, would
compensate brokers and agents for helping traditional Medicare
beneficiaries to switch their drug coverage, and would provide
compensation for helping dually eligible beneficiaries who want to
enroll in coverage options other than a Medicare Advantage plan.
Defining a minimum level of service required to earn the renewal or
switching commission.\1\ While ensuring commissions even if
beneficiaries stay with their original plans may help prevent
unnecessary switching, it also runs the risk of giving agents limited
incentive to revisit plan fit or routinely check in with beneficiaries.
Adding minimum standards for receiving these commissions could mitigate
these risks.
---------------------------------------------------------------------------
\1\ Riaz Ali and Lesley Hellow, ``Agent Commissions in Medicare and
the Impact on Beneficiary Choice,'' To the Point (blog), Commonwealth
Fund, October 12, 2021. https://doi.org/10.26099/kwgc-8k34.
Ensuring that brokers and agents are knowledgeable about and
compensated for discussing all Medicare coverage options with people
dually eligible for Medicare and Medicaid. Brokers and agents are
currently only compensated for their discussions with dually eligible
---------------------------------------------------------------------------
people if they enroll this population into Medicare Advantage plans.
Educating Medicare beneficiaries about when they can change their
source of coverage. This enhanced education could include informing
beneficiaries about the windows in which they have ``guaranteed issue
rights'' to Medigap coverage and possibly allowing for more
opportunities to purchase a Medigap plan without underwriting. The
education could also include information about existing Special
Election Periods that allow beneficiaries to change their source of
coverage outside of the Open Enrollment Period.
Increasing transparency and reporting on insurance carriers' actual
compensation payments across MA, Part D, and Medigap.\2\ Through
commissions and administrative payments, insurers can align agents'
financial incentives around their business priorities (e.g., growth of
a particular MA product over another, or growth of MA business over
Medigap). Requiring more information on overrides and payment for other
services (e.g., health risk assessments), as well as more transparency
into the relationships between health care providers, third-party
marketing organizations (TPMOs), and insurers, could help CMS assess
whether compensation and other financial arrangements are aligned with
beneficiaries' interests.\3\
---------------------------------------------------------------------------
\2\ Riaz Ali and Lesley Hellow.
\3\ Steven Findlay, Gretchen Jacobson, and Faith Leonard, ``The
Role of Marketing in Medicare Beneficiaries' Coverage Choices''
(explainer), Commonwealth Fund, January 5, 2023. https://doi.org/
10.26099/6qnb-fa27.
---------------------------------------------------------------------------
Seniors' Experiences with Medicare Marketing and Advertising
During the annual Medicare open enrollment period, beneficiaries can
reassess their coverage options to decide which one best meets their
health needs and budget. Throughout this period, marketing pitches from
private plans are seemingly everywhere. The proliferation has coincided
with an increase in complaints in recent years, with beneficiaries and
brokers reporting confusing and misleading sales tactics.
Through two nationally represented surveys in 2022 and 2023, the
Commonwealth Fund sought to understand (1) how people aged 65 and older
went about choosing between traditional Medicare and Medicare Advantage
and (2) the experiences of people aged 65 and older with plan marketing
and advertising efforts--and how those efforts may have informed their
coverage decisions.\4\,\5\
---------------------------------------------------------------------------
\4\ Faith Leonard et al., ``Traditional Medicare or Medicare
Advantage: How Older Americans Choose and Why'' (Commonwealth Fund,
October 2022). https://doi.org/10.26099/2rfq-z770.
\5\ Gretchen Jacobson et al., ``The Private Plan Pitch: Seniors'
Experiences with Medicare Marketing and Advertising'' (Commonwealth
Fund, August 2023). https://doi.org/10.26099/a9bz-by48.
---------------------------------------------------------------------------
Source of Information for Coverage Decision-Making
About one in three Medicare beneficiaries ages 65 and older,
regardless of whether they had traditional Medicare or a Medicare
Advantage plan, said they used insurance brokers or agents to choose
their coverage. The next most reported source of information was
friends and family (18%). Relatively small shares of people used the
federal Medicare.gov website and hotline and State Health Insurance
Assistance Programs, or SHIPs. More than one in three said they did not
receive any help in picking their coverage.
A larger share of Black and low-income seniors than White or
higher income seniors said that they used advertising and marketing to
help make their coverage choices. The sharp increase in complaints
about misleading or false marketing by Medicare plans and contractors
in recent years raises concerns over who is disproportionately
disadvantaged by a lack of access to unbiased help.
Quantity of Marketing Information
During Medicare open enrollment, Americans aged 65 and older
receive many phone calls, mailings, emails, and advertisements about
plan choices each week. In our survey, nearly all reported receiving at
least one phone call, mailing, or email per week. Two in five reported
receiving at least seven marketing appeals weekly.
Reports of Fraud and False Advertising
Some people reported experiences with Medicare plan marketing
that were misleading, violated federal rules, or were possibly fraud--
including more than 1 in 5 people with low incomes. This included being
asked by marketers for Medicare or Social Security numbers outside the
formal plan enrollment process, as well as being offered time-limited,
special discounts on Medicare plans, which do not exist. Some seniors
also reported experiences with false advertising or misleading
marketing information. About one in 10 said they had enrolled in a plan
under the impression that their doctor was covered, only to learn later
that there were limitations on seeing that doctor or the doctor was not
in the plan's network.
About 1 in 5 seniors said they didn't know how to file a
complaint about Medicare marketing and didn't think they could figure
out how. While formal complaints about marketing have been on the rise,
the complaints likely undercount the number of beneficiaries who are
encountering misleading, fraudulent, or prohibited marketing tactics.
Marketing's Effects on Older Adults
Nearly 1 in 3 seniors with low incomes reported staying on the
line when getting unsolicited marketing phone calls about Medicare
coverage choices. In contrast, less than one in 10 seniors with
household incomes above $50,000 stayed on the line.
When it seems like they have too many Medicare plan options,
nearly all seniors (96%) said they stick with their current plan. As a
result of this ``stickiness,'' beneficiaries can end up paying higher
out-of-pocket costs than they would have otherwise under a different
plan.
Policy Options for Consideration:
Devoting more resources to unbiased sources of information and
decision-making support for consumers, such as State Health Insurance
Assistance Programs (SHIPs), Medicare.gov, and the Medicare hotline.
Our survey of beneficiaries found that one in four people ages 65 and
older said they would like more one-on-one help in making their
coverage decisions. Investing in resources and not-for-
profit educational organizations that have no financial stake in plan
decisions is crucial, given the consequential decisions that
beneficiaries are making with imperfect information.\6\ These entities
also serve as important educational resources on navigating Medicare
and understanding the program more broadly.
---------------------------------------------------------------------------
\6\ Riaz Ali et al., ``How Agents Influence Medicare Beneficiaries'
Plan Choices'' (Commonwealth Fund, April 2021). https://doi.org/
10.26099/32d2-pz96.
Educating beneficiaries on how to file complaints about fraudulent
marketing and advertising practices. This support could be especially
helpful for older adults with lower incomes, who, as shown in our
survey, are more likely than those with higher incomes to report
---------------------------------------------------------------------------
negative experiences with marketers.
Thank you again for the opportunity to provide comments for the record.
Please contact Rachel Nuzum, Senior Vice President of Policy at the
Commonwealth Fund, at [email protected], and myself at [email protected], if we can
be of further assistance.
______
Statement Submitted by Lisa Dekker
U.S. Senate, Committee on Finance
Thank you for the opportunity to add to the record and for holding a
hearing about Medicare, especially during this open enrollment period.
I am a volunteer with PSARA Puget Sound Advocates for Retirement Action
but this my personal statement.
For over a year, I have been following the ever-more alarming news
about what was created as a public good, Medicare, being taken over and
exploited by the private insurance industry to the detriment of the
very people it was intended to serve, our seniors and people with
disabilities. The deceptive advertising and misinformation coming from
for-profit private insurers in Medicare Advantage (MA) via television
and social media is the tip of the iceberg. The massive fraud and abuse
by these insurers in the billions of dollars, documented by both media
and government investigations, plus the failure of CMS to exert real
oversight and to put beneficiaries' health and welfare first, cannot be
overstated.
I am already enrolled in Traditional Medicare, but have seen many
examples of the deceptive (and obviously costly) advertising from so-
called Medicare Advantage plans (private insurance). In addition, I
have read about how the on-the-ground experiences of Medicare Advantage
beneficiaries are very different from those of us on Traditional
Medicare (TM).
This situation appears to be way past simply making small adjustments.
Action from our elected leaders is necessary and urgent. Since this is
the Senate Finance Committee please add this recently released report
from PNHP Physicians for a National Health Program to the record: Our
Patients Their Profits, https://default.salsalabs.org/Tf70ffaa1-4264-
4e55-b795-8e37d961c33a/e22a406d-0e4a-4abf-9f6f-fffc96d789f4. The data
there shows that the amount of overpayments to MA insurers for just the
past year totals between $88 and $140 billion. If you are looking for
why the Medical Trust Fund is losing money, and how to recover it,
please start here.
On the human experience side, I've learned that Medicare Advantage
insurers have caused undue harm and even deaths due to prior
authorizations, delays and denials of care. In Medicare Advantage's
capitated system, it is obvious that the built-in incentive for them to
contradict a beneficiary's own provider's recommended treatment or drug
is greater profit.
Also regarding finances: There is a gross inequity problem for
individuals just signing up when they must choose between the 2
options. While those with limited incomes, many of them people of
color, likely are not informed of the limited networks plus the delays
and denials they will experience in Medicare Advantage, the lower
upfront costs virtually force them to choose an Medicare Advantage
plan.
After months of looking at the situation, I conclude, along with PSARA,
that the only solution is to immediately ``level the playing field''
between the 2 options, Traditional Medicare and Medicare Advantage,
being offered.
The 3 fixes necessary to ``level the playing field are:
1. Adding benefits to Traditional Medicare including vision,
dental and hearing.
2. Eliminating the 20% co-pays in Traditional Medicare and capping
out-of-pocket expenses.
3. Paying for improvements to Traditional Medicare by eliminating
excessive administration costs and profits in private insurance plans;
and returning funds to the Medicare Trust Fund that were lost to the
fraud and abuse by insurance companies.
I urge you to stop the crimes and malfeasance from the private Medicare
Advantage insurers, and honor the trust that Americans still have in
true Medicare and in the ability of you, our elected representatives,
to fix it.
Working across generations for social justice, economic security,
dignity, and a healthy planet for all of us.
______
eHealth, Inc.
Santa Clara, CA
Gold River, CA
Salt Lake City, UT
Austin, TX
Indianapolis, IN
https://www.ehealthinsurance.com/
eHealth is pleased to offer our viewpoints and observations related to
the Medicare Annual Enrollment Period (AEP), and in particular our
insights regarding Medicare marketing practices and recommendations to
improve Medicare beneficiaries' experiences. eHealth is a licensed
insurance agency. We serve customers who seek individual, family and
small business health plan solutions, as well as the full complement of
Medicare options, including Part D Plans, Medicare supplemental
insurance, and Medicare Advantage. We make it easy to compare and
enroll in the healthcare plans that best fit a person's needs. As a
leading independent insurance advisor, our user-friendly platform
offers access to over 180 health insurers, including national, regional
and local companies. For more than 25 years, we've helped millions of
Americans find the healthcare plan that fits their needs at a price
they can afford.
Our licensed agents are instructed to treat eHealth Medicare customers
as if they were their own parents and grandparents: with patience and
compassion. Every employee abides by our Medicare Beneficiary Pledge
and is dedicated to performing their responsibilities with the highest
degree of ethics and integrity while meeting government regulations and
insurer standards to protect the rights and interests of those we
serve. eHealth benefit advisors are commission-blind and paid the same
no matter which MA or Medicare supplement plan the customers select,
and they are rewarded when customers are so satisfied with their
coverage that they retain their plan for a longer period. Additionally,
eHealth benefit advisors' compensation is the same regardless of which
PDP plan a customer selects.
The term ``third-party marketing organization'' (TPMO) encompasses a
wide range of actors in the continuum of Medicare marketing, sales and
enrollment. Some TPMOS are licensed, and some are not. eHealth, a
private health insurance marketplace, is licensed, and our company name
is tarnished with the mischaracterization of TPMO entities throughout
the industry as a whole. In the unfortunate cases where customers are
dissatisfied, eHealth has created an extensive process for
investigating and remedying every single complaint, grievance and CTM
received. Our compliance team of more than 40 professionals engage in a
process which includes research, investigation, identification of root
cause, and implementation of corrective action, up to and including
termination. In the end, our business depends on keeping satisfied
long-term customers, and this is only possible when we provide superior
service in helping beneficiaries find and enroll in the best available
plan for their circumstances.
1. Brokers Help Beneficiaries Find the Right Plan for Their Needs
Without Increasing Enrollee Costs
Brokers are an essential component to helping beneficiaries find the
best plan for their specific needs. They are required to have state-
issued licenses, and then they must be appointed by a carrier and pass
carriers' exams \1\ for CMS regulatory compliance as well as content
knowledge of carrier-specific product offerings. Local brokers can be
helpful when a beneficiary has narrowed the decision to a single
carrier or a small subset of carriers. However, local brokers may not
work with as many carriers as a regional or national broker, which
limits the ability of beneficiaries to explore all their options when a
beneficiary is undecided. Local plans can be a great choice for some
beneficiaries, while regional and national plans with different
provider networks and benefit offerings may be a better match for
others.
---------------------------------------------------------------------------
\1\ 42 CFR Sec. 422.2274(b)(1) and (2).
Licensed brokers help beneficiaries determine whether the smaller local
plans or the larger regional or national plans are the better fit for
their particular circumstances. The larger brokers like eHealth have
developed sophisticated, proprietary plan-matching tools that can
consider a person's preferred medical providers, nearest pharmacies,
and prescribed drugs. These information elements can then be taken into
consideration in combination with plan information such as Star
Ratings, plan benefits, and budget considerations to identify which
carriers and plans provide better coverage for an enrollee's unique
situation. Moreover, brokers' specific knowledge of a carrier's
supplemental benefit offerings in combination with familiarity of the
beneficiary's social determinants of health (SDOH) can help with a plan
selection which achieves optimal health outcomes. Larger brokers, like
eHealth with its omni-channel choice platform featuring over 40
Medicare Advantage carriers, can often provide beneficiaries with more
options than local brokers so that the beneficiaries can make the best-
informed choices.
2. Marketing Fees Support Beneficiary Education, Comparison and
Selection
Whether a broker is local or national, every broker business needs to
market its services to be a viable entity. Commissions and marketing
fees make this economically feasible. Approaches to advertising and
beneficiary education reflect the variations from one market to another
and are dictated by the goals of partner carriers. It is simplistic to
assume that enrollment activity tied to ``commission'' is always
preferable to non-commission ``marketing fee'' activity. Both payments
are used to help connect beneficiaries with the right plans. For
example, marketing fees may help fund more expensive marketing
campaigns that reach traditionally underserved or isolated communities.
In all cases, marketing fees, like all other administrative fees, are
tied to a fair market value by current CMS regulations, which specify
such services as training, customer service, agent recruitment,
operational overhead, as well as other services designed to improve the
health of the beneficiary and quality of healthcare service, such as
assistance with completion of health risk assessments (HRAs or HRA).\2\
---------------------------------------------------------------------------
\2\ 42 CFR Sec. 422.2274(e)(1).
All administrative fees permitted by CMS regulations, including
marketing fees, are paid by carriers to brokers for specific services a
carrier would otherwise purchase from a discrete entity or perform on
their own. Unlike commissions, marketing and other administrative fees
are not paid at a fixed-dollar amount set by CMS because the services
for which carriers pay for vary greatly. Such fees can pay for items
necessary to provide the best possible experience for beneficiaries.
One such service eHealth performs is HRA completion for a limited
number of carriers, as well as first-appointment scheduling services
for select carriers. Because we have an existing relationship with the
beneficiary and are at the front line of the engagement process, we can
carry out these services much better than a third party without an
existing prior relationship. HRAs serve as a ``first alert'' to the
carrier's care management team enabling immediate coordination of a
beneficiary's chronic condition before it manifests into multiple
emergency room visits. These services are mandated for Special Needs
Plans (SNPs) and are an established best practice for Quality Programs
of standard Medicare Advantage Plans.\3\ Together with immediate
scheduling for a first appointment with a provider of the beneficiary's
choosing, HRAs facilitate care management and enhance the enrollee's
quality of life. Some HRAs include components of SDOH assessments
offering a level of care that extends into supports for daily living.
The notion that such assessments are conducted solely to gain risk
adjustment payments is without merit as any such payment does not
factor in until the end of an enrollee's first year in the plan.\4\
---------------------------------------------------------------------------
\3\ 42 CFR Sec. 422.152(g)(2)(iv).
\4\ 42 CFR Sec. 422.310(g).
Administrative fees also partially offset the growing compliance costs
associated with increasingly burdensome and complex regulation of the
industry as a whole. Examples range from recording equipment required
to create and maintain call recordings for the 10 years required by CMS
regulation, to training, licensing, marketing material development and
the administrative responsibilities tied to general oversight, carrier
review and approval, and submission to CMS and monitoring agents to
provide beneficiaries with professional, legally compliant service.
Because the costs of such items vary depending on the situation and
scope of services, it would be administratively prohibitive, if not
impossible, to establish for each plan year and each geographic region
---------------------------------------------------------------------------
the exact dollar amount for every possible permutation of service.
Commissions and fees do not reduce the funds available for patient care
in the Medicare program. The Affordable Care Act established an 85%
medical loss ratio (MLR) for MA and PDP plans.\5\ Broker compensation
and administrative fees do not reduce the resources available to pay
for Medicare enrollees' health care expenses because 85% of premium
revenues must be used for patient care. The remaining 15% covers
everything else, including carrier profit; carrier distribution costs
like marketing, advertising, and commissions; and carrier overhead,
like rent, call centers, information systems, etc. As CMS itself
explains, there are ``several levels of sanctions for failure to meet
the minimum MLR requirement, including remittance of funds to CMS, a
prohibition on enrolling new members, and ultimately contract
termination. The minimum MLR requirement creates incentives for MA
organizations and Part D sponsors to reduce administrative costs and
helps to ensure that taxpayers and enrolled beneficiaries receive value
from Medicare health plans.''\6\
---------------------------------------------------------------------------
\5\ 42 CFR Sec. Sec. 422.2410 and 423.2410.
\6\ Medical Loss Ratio. Centers for Medicaid and Medicare Services,
last modified September 6, 2023 4:57 pm, https://www.cms.gov/medicare/
health-drug-plans/medical-loss-ratio. Accessed October 28, 2023.
MLR regulations therefore already provide an upper bound on the amount
of spending that may go from the Medicare Trust Funds and Medicare
beneficiary premiums for non-patient care. A reduction in broker
compensation would most likely lead to more money being spent on other
administrative activities or being allocated to profit by carriers--not
---------------------------------------------------------------------------
an increase in funding for actual patient care.
Finally, taxpayer-funded CMS television and paid search advertising
which direct enrollees to CMS's Medicare Plan Finder are nothing more
than a publicly funded competitor to a private sector partner. When
beneficiaries are enrolled into Medicare Advantage plans utilizing
substantial, and growing, public dollars, carriers are the ones who
benefit by not paying a broker commission. Such taxpayer funding is not
subject to the same MLR limitations that broker commissions are. Thus,
taxpayers ultimately are funding the overhead operations of private
carriers and doing so despite the well-identified limitations of CMS's
Medicare Plan Finder and without the benefit of state licensure and
carrier-specific training on plan options to ensure the best fit for a
beneficiary.
3. eHealth Helps Beneficiaries Find the Right Plans for Their
Circumstances
eHealth's platform allows beneficiaries to easily compare available
plan features, including the use of proprietary tools for comparing
provider networks, prescription drug coverage, and other plan benefits.
Because of these significant investments to help beneficiaries with
plan selection, eHealth is able to provide beneficiaries with an easy
way to search for preferred doctors and pharmacies both online and
telephonically. The convenience eHealth's search tools provide
contrasts with the difficult process hearing witnesses described using
public tools such as CMS's Medicare Plan Finder to search up to 100
plans when trying to find the plans which cover certain providers. We
believe eHealth's best-in-class, easy-to-use search and plan matching
capabilities are a good example of the innovation the private sector
brings to the public-private partnership which makes Medicare Advantage
possible.
We share the Committee's concern with ``ghost networks'' full of
providers that either do not exist or have no availability to see new
patients, and we fully support efforts to increase applicable
enforcement efforts and transparency regarding the availability of
providers. Our overarching goal at eHealth is to assist our
beneficiaries in finding the best available plans for their needs and
preferences. This goal is greatly hampered when the provider network
data from carriers is incomplete, outdated, or otherwise does not
reflect the availability of providers in a carrier's network. eHealth
receives weekly feeds from our carrier partners with updated provider
network information, yet we still do not have complete assurance of
provider network data quality even with these frequent, active updates
to our
carrier-supplied information.
4. Discrete Regulatory Guidance and Transparency Will Help Vulnerable
Medicare Beneficiaries
Along with members of the Committee, eHealth wants to avoid enrolling
individuals with cognitive impairment and continues to work on
screening out such individuals whenever possible within the bounds of
existing regulations and upon best available guidance from carriers and
CMS. It would be helpful for CMS to provide clarification or regulatory
change to facilitate screening individuals with cognitive issues.
Current regulations do not allow health status to be used when
marketing or enrolling beneficiaries as doing so violates the anti-
discrimination statute.\7\
---------------------------------------------------------------------------
\7\ 42 CFR Sec. Sec. 422.110 and 45 CFR Part 92.
Just as carriers and marketing organizations are required to provide
far more data to CMS, it is vital that business partners in turn
receive data from CMS for assessment and continuous improvement
benefiting the entire industry. Greater transparency on the following
topics is essential to ensuring beneficiary needs for information are
---------------------------------------------------------------------------
being met:
Complaint Tracking Module (CTM) rates (2020-2022). This
information would allow partners and regulators to measure progress
going forward from the point when new CMS guidance went into effect for
2022.
Performance metrics. Service levels are a key factor in
measuring quality. As taxpayer-funded contracts are awarded to serve a
rapidly growing Medicare population, transparency about rates of
cancellation, disenrollment and overall satisfaction and complaints for
1-800-MEDICARE and CMS's Plan Finder could pinpoint issues to address.
Providing data for 1-800-MEDICARE average hold time, the percentage of
calls answered within 30 seconds, and the average disconnect rate
especially during high volume periods is vital to understanding the
beneficiary experience.
SHIPs. Data about the effectiveness of State Health Insurance
Programs, including elements to measure performance, are a further
window at a more local level into satisfaction and complaints,
particularly when the data is compared with other channels such as CMS
or carriers.
We noted with interest the discussion and subsequent recommendations to
CMS by majority members of the Committee regarding the addition of
broker data to CTM reporting. eHealth offers the following
considerations to ensure any new data is accurate and not misleading:
Individual agents move among carriers and brokerages/agencies
frequently, which would likely make it difficult to track the carrier
or insurance agency tied to the complaint in an accurate manner for any
length of time beyond the snapshot timeline of the CTM receipt date.
Additionally, if an individual agent is identified by its insurance
agency as having compliance issues before a CTM is a filed, the
insurance agency's remedy is discipline, including termination. Since
CTMs are lagging indicators, they may be filed after the agent has been
terminated. This would create a ``black mark'' despite the insurance
agency having taken appropriate steps even before a CTM is filed.
Detailed reporting by CMS on CTMs, including accuracy of
reported broker information, investigation timelines, and dispositions,
will be necessary to ensure brokers are not unfairly maligned by
inaccurate reporting, unfounded CTMs, or CTMs that have not been
researched to resolution. In other words, CTMs incorrectly associated
with a broker or determined to be unfounded or not investigated ought
not remain on the record as a ``black mark'' which cannot be expunged.
Large agencies/brokerages will have more enrollments, and
therefore more CTMs. Further, the continuing rapid growth of the
Medicare population translates to an increased number of complaints,
hence the need to examine complaint rates and not absolute numbers. We
suggest that CTM data be reported as percentage of enrollment, similar
to the reporting required by Stars that reflects the actual complaint
rate rather than absolute number of complaints, which simply indicate
an entity does a large volume of business.
Moreover, a beneficiary can lodge a complaint with both the
carrier as well as CMS, and so a single issue counts as two separate
categories of complaints, one being an internal carrier complaint and
the other a CTM, both of which remain on the carrier record and count
against performance. It is also important to note that CTMs often
include complaints which are outside the scope of a broker's control,
such as a mid-year formulary change.
5. eHealth Supports Eliminating Abusive Marketing Practices
As a responsible participant in the market, eHealth supports the
Committee's desire to eliminate unscrupulous and disruptive marketing
practices which harm beneficiaries. Such marketing abuses also harm the
reputation of eHealth and other respected brokers. The marketing abuses
on which the Committee is focusing are generally from non-licensed lead
generators, and not from credible, licensed brokers such as eHealth.
The worst actors within the lead generator community tend to be
smaller, unestablished outfits which are typically not licensed to sell
insurance products and do not focus on Medicare marketing. Such lead
generators are not constrained by the requirements of insurance
licensing and often do not follow the strict compliance standards
required for Medicare marketing. Indeed, the most unscrupulous among
them purposely avoid regulations which interfere with their profits.
eHealth seeks to avoid working with such lead generators because they
are not only harmful to beneficiaries in general, but also harmful to
eHealth's customers and reputation. eHealth requires all of its lead
generation partners to submit their marketing materials for approval
and filing in accordance with the regulatory requirements established
by CMS and enforced by the carriers. eHealth refuses to do business
with lead generators that cannot comply with eHealth's requirements and
the CMS-
mandated regulatory framework for Medicare marketing, and we terminate
contracts when we identify abuses.
6. CMS Marketing Regulations Have Room for Improvement
CMS regulations regarding Medicare marketing are already quite
extensive and complex. Compliant brokers must file materials with each
carrier with which they partner, as well as CMS. For a licensed
insurance agency operating nationwide like eHealth, doing so requires
obtaining approval from each of over 40 different Medicare Advantage
carriers for a single postcard, banner ad, or other piece of marketing
material before it can be used. Once those approvals are obtained, all
materials must then be filed with CMS. CMS currently requires 45 days
to approve video and television marketing materials, and a five-day
file and use process for direct mail pieces.
In practice, it takes months of preparation and an eHealth staff of
dozens to prepare and use compliant marketing materials at all.
Furthermore, carriers and CMS staff must review the same piece
potentially dozens of times as each TPMO submits the identical piece
for duplicative reviews as the current regulations require. Reducing
this duplicated effort would allow carriers and CMS to better allocate
their resources and funding without reducing any safeguards on the
materials presented to beneficiaries. A viable example would be the
more streamlined approach previously in place as a part of the Lead
Plan review process, prior to implementation of the Third-Party
Marketing Module.
CMS has issued new rules each year for the last several years, often
with confusing and contradictory guidance, making good-faith compliance
difficult. For example, this year's rule requiring a scope of
appointment be obtained from a beneficiary 48 hours before speaking
with the individual has resulted in a number of conflicting
interpretations from the various Medicare Advantage carriers due to
unclear or inconsistent guidance from CMS. The result is widespread
industry confusion that increases the likelihood that beneficiaries
will have inconsistent and unsatisfactory experiences when seeking
advice on their Medicare Advantage options.
7. Conclusion
Along with members of the Committee, eHealth leaders are deeply
invested in the well-being of Medicare beneficiaries and their
caregivers, together with all who utilize our services to secure health
coverage that not only allows them to live healthier lives, but also
brings peace of mind. Member satisfaction with Medicare Advantage plans
remains very high, and eHealth's CTM rates on average have declined
since 2021. We stand ready to partner with lawmakers and regulators to
ensure the Medicare program as a whole delivers on its promise to meet
the vastly diverse needs and preferences of those we serve in public-
private partnership.
Contact:
Kate Sullivan
Vice President--Government Affairs
(202) 256-6456
[email protected]
______
Federation of American Hospitals
750 9th Street, NW, Suite 600
Washington, DC 20001
202-624-1500
FAX 202-737-6462
https://www.fah.org/
Statement of Charles N. Kahn III, President and CEO
The Federation of American Hospitals (FAH) submits the following
Statement for the Record in response to the Senate Finance Committee
(Committee) hearing on Medicare Advantage Annual Enrollment: Cracking
Down on Deceptive Practices and Improving Senior Experiences. The FAH
commends the Committee's leadership in providing oversight of the
Medicare Advantage (MA) program as an increasing number of America's
seniors receive their Medicare benefits through Medicare Part C health
plans instead of the traditional fee-for-service program.
The FAH is the national representative of more than 1,000 leading
tax-paying hospitals and health systems throughout the United States.
FAH members provide patients and communities with access to high-
quality, affordable care in both urban and rural areas across 46
states, plus Washington, DC, and Puerto Rico. Our members include
teaching, acute, inpatient rehabilitation, behavioral health, and long-
term care hospitals and provide a wide range of inpatient, ambulatory,
post-acute, emergency, children's, and cancer services.
We welcome the opportunity to work with the Senate Finance
Committee on its oversight of the MA program to ensure Medicare
beneficiaries enrolling and enrolled in MA plans are treated fairly,
provided accurate and timely information, and have access to the same
benefits and healthcare services as Medicare beneficiaries in
traditional Medicare.
As an organization representing tax-paying hospitals that provide
24/7 care to patients, including MA enrollees, we understand the
extensive and inappropriate practices of prior authorization abuses and
patient care delay and denial. MA plans systematically limit, delay,
and deny access to care for MA enrollees, and problems with deceptive
marketing practices and unclear benefit descriptions are only the tip
of the iceberg. Every day our members experience patients' confusion
and frustration when they realize their MA plan does not cover or will
not pay for the Medicare services they expect.
Further, MA plans often offer and publicize attractive benefits to
Medicare beneficiaries who struggle to afford supplemental services
such as Medicare Part D, dental, club memberships, or other similar
benefits. However, severely ill or injured patients who need access to
specialized medical and hospital services may find these additional
benefits do not outweigh limited provider networks and overly
aggressive utilization control practices.
The FAH believes that greater information on an MA plan's
utilization management practices should be made available to
beneficiaries and potential enrollees during the enrollment process.
For example, being better informed about the services that require
prior authorization and the approval/denial rates for each plan could
help beneficiaries with chronic illnesses or known medical conditions
assess how easy it will be for them to access care in a particular
plan. Additionally, all beneficiaries would benefit by being able to
compare plans on the extensiveness of their utilization management
practices and potential abuses. The FAH urges the Committee to pursue
legislation that would accomplish this level of transparency and we
believe the Improving Seniors' Timely Access to Care Act of 2023 would
provide the needed information to require this type of transparency.
Many of our concerns related to MA plan utilization management
abuses were included in a 2022 HHS OIG Report.\1\ The report showed
that MA plans systemically apply problematic operating policies,
procedures and protocols that limit care for MA enrollees. The OIG
Report also identifies a pattern by which MA plans apply utilization
controls to improperly withhold coverage or care from MA enrollees.
Specifically:
---------------------------------------------------------------------------
\1\ Christi A. Grimm, U.S. Department of Health and Human Services
Office of the Inspector General (``OIG''), OEI09-18-00260, ``Some
Medicare Advantage Organization Denials of Prior Authorization Requests
Raise Concerns About Beneficiary Access to Medically Necessary Care''
(April 2022), https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
Improper prior authorization denials. The OIG found that 13
percent of prior authorization requests denied by MA plans would have
been approved for beneficiaries under original Medicare.
Improper denials for lack of documentation. The OIG found that
in many cases beneficiary medical records were sufficient to support
the medical necessity of the services provided.
Improper payment request denials. The OIG found that 18 percent
of payment requests denied by MA plans actually met Medicare coverage
rules and MA plan billing rules.
These OIG findings reflect a broader pattern of MA plan practices
that inappropriately deny, limit, modify or delay the delivery of or
access to services and care for MA beneficiaries. CMS also recently
acknowledged many of these concerns in a December 2022 proposed rule
regarding improving prior authorization processes and an April 2023
final regulation with MA policy changes \2\ that would constrain some
of the bad behaviors MA plans regularly employ related to prior
authorization and non-coverage of items and services that would be
covered for beneficiaries under the traditional Medicare fee-for-
service program.
---------------------------------------------------------------------------
\2\ https://www.cms.gov/newsroom/press-releases/cms-proposes-rule-
expand-access-health-information-and-improve-prior-authorization-
process; https://www.cms.gov/newsroom/fact-sheets/2024-Medicare-
advantage-and-part-d-final-rule-cms-4201-f.
We commend the Committee's leadership and focus today to ensure
Medicare beneficiaries have reliable access to care and meaningful
information during the MA enrollment process and urge passage of the
Improving Seniors' Timely Access to Care Act of 2023 which will provide
needed information and transparency on utilization management
practices. Further we urge you to investigate the utilization
management practices and exercise oversight authority to help protect
patients against harmful MA plan behaviors through, for example, prior
---------------------------------------------------------------------------
authorization reforms and comprehensive provider networks.
We look forward to working with you and your colleagues in Congress
as you evaluate these important issues. If you have any questions or
would like to discuss these comments further, please do not hesitate to
contact me or a member of my staff at (202) 624-1534.
Sincerely,
Charles N. Kahn III
______
Letter Submitted by Patricia Gallegos
October 23, 2023
U.S. Senate
Committee on Finance
I am sending this Statement about Medicare Advantage for the Record.
The official hearing was held on October 18, 2023 by the Senate Finance
Committee. I would like this statement to be entered into the official
record. I would also appreciate it if a copy of my comments are sent to
each member of the Senate Finance Committee.
I am writing to voice my opposition to Medicare Advantage plans. My
reasons include the following:
Medicare Advantage has always cost the government more money than
Traditional Medicare. The Medicare Advantage plans have been getting
more money than Traditional Medicare through fraudulent billing, mostly
related to falsified diagnoses. Medicare Advantage plans have received
billions of dollars in overpayments from excessive subsidies, among
other items.
Information from a top government official stated that In 2020 Medicare
Advantage companies received more than $25 billion In overpayments. The
University of Southern California's research warns that overpayments to
Medicare Advantage plans will exceed $75 billion in 2023. Other studies
and reports put the level of overpayment at more than $88 billion.
At the rate these fraudulent overpayments are being made, combined with
the aging of the population, the Medicare Trust Fund will be bankrupt
very soon. Medicare will then be privatized and health-care costs will
increase even more and millions of people will lose there health care.
This would indeed be a disaster.
Medicare Advantage charges more to the government and to the patients
than what Traditional Medicare charges. The fact is that Medicare
Advantage plans have been over billing for services, tests, medicine,
surgeries, etc. since the start of the program. In addition, all the
policies put in place by Medicare Advantage plans have increased the
cost of providing medical care.
Equally important, patients on Medicare Advantage ultimately pay higher
costs for needed healthcare than those on Traditional Medicare. Given
the evidence of delays and denials of necessary care, Medicare
Advantage patients often suffer higher overall costs.
Medicare Advantage was authorized in 1982 and expanded in 2003, with
very little Input from Medicare patients. This Is one reason why
Medicare Advantage companies financially benefit at such a huge rate
and are draining the Medicare Trust Fund.
Also, ample data shows that Medicare Advantage has not yielded any
savings, while also not providing better care than Traditional
Medicare.
There are numerous studies, research and evidence that have found
additional, ongoing problems with Medicare Advantage which include
limiting access to plans for patients deemed not healthy enough,
limiting the network of doctors and providers, restricting prior
authorization procedures, patients having longer wait times to see
doctors and receive medical services, and patients receiving more
denials for coverage.
Medicare Advantage should not be extended until a thorough review can
be made of the current program. The review should require an in-depth
review of the billions of dollars of overpayment to Medicare Advantage
companies. It should also look at why patient costs are increasing at
such a fast rate under Medicare Advantage. In addition, it should look
at quality of care, accessibility, billing practices, fraudulent
practices and any other issues that affect patient care provided by
Medicare Advantage plans.
Most importantly, the review and recommendation process must include
people who are themselves Medicare patients. The decision about
Medicare Advantage shouldn't be made by business managers,
underwriters, insurance managers or any person with a profit motive.
Medicare should be run by professionals, advocates and people who are
knowledgeable about what is the best care for the patients and how to
make it affordable for everyone.
Thank you very much.
Patricia Gallegos
______
Statement Submitted by Virginia Gebhart
Volunteer with Be a Hero Foundation
https://beaherofund.com/
To Whom It May Concern:
I was surprised that a broker for a Medicare DisAdvantage company was
presented as an expert when there was nobody representing those who
have been harmed by Medicare DisAdvantage plans.
Examples of those who have been harmed by Medicare DisAdvantage include
seniors who were influenced by deceptive advertising to choose these
inferior for-profit commercial insurance plans. Examples include the
many hospitals and medical clinics who are now refusing to take
Medicare DisAdvantage plans because their ``delay, deny, don't pay''
business practices are harming patient care and harming the bottom
line. Examples include those who have been forced into Medicare
DisAdvantage plans via the corrupt ACO REACH program. Examples include
those individuals who have faced ``delay, deny, don't pay'' business
practices that have caused unnecessary extended pain and suffering.
Examples include individuals whose loved ones died prematurely due to
the ``delay, deny, don't pay'' business practices of Medicare
DisAdvantage plans.
I was surprised that the Senators seem to accept that corrupt
organizations (i.e.,
corporate-run for profit Medicare DisAdvantage) should continue to have
the opportunity to raid the Medicare Trust Fund. I was surprised that
the Senators would not direct CMS to enforce existing rules and
penalize or expel those corrupt organizations who are victimizing
seniors and health care providers.
It's clear to me that corporate-run Medicare DisAdvantage is elder
fraud and financial exploitation. I'm surprised that the Senators seem
to accept that these corrupt organizations have a role to play in
providing health care to Seniors. It's clear to me that Medicare
DisAdvantage plans prioritize profits over patient care and/payments to
providers. Corporate-run Medicare DisAdvantage plans are the
quintessential corporate pigs feeding at the trough.
We the people are your constituents. The corporate pigs are not.
______
Letter Submitted by Brian Grad
U.S. Senate
Committee on Finance
The 2022 Annual Report of the Boards of Trustees of the Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust
Funds \1\ concludes that the Hospital Insurance Fund will be depleted
by 2028.
---------------------------------------------------------------------------
\1\ https://www.cms.gov/files/document/2022-medicare-trustees-
report.pdf.
While it is true that the number of beneficiaries continues to
grow, that indicator alone is not the main cause of this projection.
Medicare Advantage is causing the Trust Fund to run a deficit because
---------------------------------------------------------------------------
of the overpayments made to insurance companies.
The Federal Government is losing as much as $140 billion per year
by subsidizing private Medicare Advantage plans.
What can be done to prevent Medicare from going bankrupt?
Sincerely,
Brian Grad
______
Letter Submitted by Patty Harvey
October 18, 2023
U.S. Senate
Committee on Finance
Dear Senators,
It is laudable that in today's hearing you looked into the outrageous
practices of fraud and abuse by MA companies (and it was good to see
Senator Warren include the execrable practice of upcoding) that are
draining the Medicare Trust Fund. But you did not address an
overarching reality; namely, that these plans are unnecessary to begin
with.
Why are we taxpayers being forced to subsidize the additional perks and
expenses of these middlemen (not to mention fraud and abuse that nets
MA from $88 to over $100 billion/yr from the Medicare Trust Fund)? Why
not just improve our original Medicare to include dental, vision,
hearing, long-term care and elimination of the need for Medigap plans
and add any other perks offered at a much higher cost to us by MA?
The fraud and abuse of MA, if recouped, could pay for all these perks
and improvements to be added to real Medicare and extend those benefits
to all residents from birth to death. This has been well-documented and
verified by even the most conservative estimates. Where is the
political will to do something that actually will work? People are
frustrated and angry and need health care--like in other industrialized
democracies! Senators, stop luxuriating in the bribes you enjoy from
corporate interests and do something for the people!
Patty Harvey
Co-chair
HCA/PNHP-Humboldt
______
Insurance Marketing Coalition
19580 W. Indian School Rd., Suite 105, PMB 141
Buckeye, AZ 85396
Dear Members of the Committee:
The Insurance Marketing Coalition (IMC) submits this statement for
inclusion in the record of the October 18, 2023, hearing ``Medicare
Advantage Annual Enrollment: Cracking Down on Deceptive Practices and
Improving Senior Experiences.'' Although IMC shares the Committee's
concerns around unscrupulous companies that use deceptive marketing
practices to mislead seniors and other Medicare beneficiaries, care
should be taken to avoid measures that would hurt consumer choice and
competition with the collateral effect of punishing law-abiding
businesses and their employees. More specifically, IMC seeks to
emphasize the following points, which are explained in greater detail
below:
I. Insurance agents, brokers, and marketers serve a critical
role in making consumers aware of Medicare Advantage and
Prescription Drug programs and helping them compare their
coverage options.
II. Insurance marketers play a critical role in helping
insurance agents and interested consumers connect with each
other, and allow small agencies to compete with dominant
players, thereby promoting consumer choice and competition.
III. It is unfair to malign an entire industry based on the
deceptive and illegal acts of some dishonest actors. Most
industry participants are honest, hardworking, and strive to be
transparent with their customers.
IV. Legislators should encourage regulatory agencies and law
enforcement to crack down on deceptive practices under existing
laws, while avoiding reactionary measures that would hurt
consumer choice and competition while punishing law-abiding
industry participants.
OVERVIEW OF IMC
The IMC is a consortium of more than forty companies representing a
cross section of insurance industry stakeholders. Our members employ
Americans in all fifty states and include large and small companies.
The mission of IMC is to help protect the best interests of consumers
by, among other things, promoting compliant and best practices in
insurance marketing and services. Each year, we interact, collectively,
with millions of consumers by providing information, education and
meaningful choices related to their insurance coverage options. Some of
our members are licensed agencies and brokers that represent multiple
MA organizations and collectively enrolled more than a million
beneficiaries in Medicare Advantage plans in 2022. These companies are
currently working to assist the more than 60 million Americans
currently eligible to make changes to their Medicare coverage during
the Annual Enrollment Period (AEP) that is now underway. Other members
are marketing and advertising companies that assist millions of
beneficiaries to connect with licensed agents and brokers each year.
Some of our members are technology companies that provide platforms and
services to support brokers, agents, and marketers. Among other things,
our members are dedicated to providing transparency in their efforts to
help beneficiaries become aware of and understand their Medicare
coverage options and select plans that meet their needs.
I. Insurance agents, brokers, and marketers serve a critical role in
making consumers aware of Medicare Advantage and Prescription Drug
programs and helping them compare their coverage options.
Insurance agents, brokers, and marketing companies serve a critical
role in raising awareness with consumers and educating them about
Medicare coverage options. For consumers who are new to Medicare,
coverage options can be overwhelming. Indeed, many consumers who become
eligible for Medicare are unaware of Medicare Advantage and
Prescription Drug options, which are a better fit for some consumers
than Original Medicare. For consumers who already have Medicare, plan
benefits, networks, and costs can change each year. Although the broad
variety of plans and options available to beneficiaries is good for
consumer choice and competition, some consumers find the task of
comparing plan options and benefits as daunting. As Christina Reeg,
Ohio senior health insurance information program director for the Ohio
Department of Insurance, explained at the October 18 hearing, there are
so many options that ``most Medicare beneficiaries won't review or
change plans, because the task of comparing is too daunting to help
narrow the field.''
In addition to plan options and choices that consumers may not be
aware of, there are also crucial deadlines and windows of opportunities
during which choices must be made. For example, new Medicare
beneficiaries may have to pay late enrollment penalties if they fail to
sign up for Medicare coverage during their initial enrollment period.
And for existing Medicare beneficiaries, changes to plans can only be
made during a narrow open enrollment period, unless there are certain
life changes that qualify a beneficiary for a special enrollment
period.
So who can raise awareness among American consumers about their
Medicare plan options? Who can raise awareness through relevant media
channels, including social media, TV, radio, podcasts, etc. of critical
deadlines, windows of opportunity, and potential eligibility for plan
changes due to certain life events? Who can sit with consumers, one-on-
one, during lengthy meetings to undertake an analysis of the consumers'
needs, help review their medical networks and prescription drug
coverage, and answer their individualized questions and concerns?
The answer to these questions is insurance agents, brokers, and
marketers such as the members of IMC. The government does not have the
resources or expertise to undertake this, and it cannot be done through
technology or self-help services online. All three witnesses present at
the October 18th hearing agreed that neither CMS nor SHIPS have
adequate resources to help the 60 million beneficiaries who are
eligible for Medicare Advantage. Among other things, they rely on the
CMS Medicare plan finder, which they described as cumbersome, often out
of date, and unable to provide critical information, such as doctor
network participation and drug coverage. And while insurance carriers
may be able to provide this information, they can only provide it for
their own plans. A broker can help beneficiaries compare plans from
multiple carriers, avoiding the need for the beneficiary to contact
each insurance carrier separately in order to find the plan that best
meets their personal needs.
Further, surveys show that consumers want and appreciate the
services provided by insurance agents, brokers, and marketers.
According to a 2023 Kaiser Family Foundation Study, many beneficiaries
find selecting Medicare coverage ``overwhelming'' and rely on brokers
to assist them when choosing their coverage and value their expertise.
``Participants who use brokers to help select and enroll in a Medicare
plan say brokers are a trusted resource.''\1\ Another survey reports
that ``[i]n Q2 2020, 41% of those surveyed said they believed it was
essential or very important to interact with an agent, and that
percentage increased to 49% in Q3 2021.''\2\ And as reported by
Commonwealth Fund, more than 1 in 3 beneficiaries said they would like
to know more about benefits outside of their coverage options, and 1 in
4 would like one-on-one help.\3\ Agents and brokers help beneficiaries
with this daunting task by educating them on their choices while taking
into consideration their specific healthcare needs and the specific
benefits offered by the available plans, including provider network
participation and prescription drug coverage that is critical to their
coverage.
---------------------------------------------------------------------------
\1\ Kaiser Family Foundation Study, September 15, 2023, What Do
People with Medicare Think About the Role of Marketing, Shopping for
Medicare Options, and Their Coverage? Available at https://www.kff.org/
medicare/report/what-do-people-with-medicare-think-about-the-role-of-
marketing-shopping-for-medicare-options-and-their-coverage/
#::text=In%20general%2C%20many
%20thought%20TV,role%20in%20their%20plan%20choices.
\2\ Insurance News Net, January 20, 2022, Consumers Shopping for
Insurance in the Midst of The Pandemic. Available at https://
insurancenewsnet.com/innarticle/consumers-shopping-for-insurance-in-
the-midst-of-the-pandemic.
\3\ See https://www.commonwealthfund.org/publications/issue-briefs/
2023/sep/private-plan-pitch-seniors-experiences-medicare-marketing-
advertising.
II. Insurance marketers play a critical role in helping insurance
agents and interested consumers connect with each other, and allow
small agencies to compete with dominant players, thereby promoting
---------------------------------------------------------------------------
consumer choice and competition.
Insurance marketers play a critical role in the marketing and sales
process for Medicare Advantage and Prescription Drug insurance where
consumers often seek one-on-one consultations with licensed
professionals to understand options, terms, and pricing prior to
purchase. Marketers help make consumers aware of the broad array of
available product choices and where to get them. Rather than promoting
a single product or service, many insurance marketers empower consumers
to explore their coverage options easily and quickly from multiple
licensed agents if they choose. Many of these marketers rely on digital
marketing, which requires a specialized skill set. Digital ad markets
are extremely competitive and expensive to participate in, making it
cost prohibitive for many companies to compete. Marketers use their
expertise in digital advertising and ad buying to permit participation
in digital ad markets by companies that otherwise would not have the
expertise or resources to do so. For small businesses in particular,
such as mom-and-pop insurance brokers, performance marketing is the
lifeblood of their businesses as it allows them to reach new customers
on equal footing as national companies that have multi-
million-dollar marketing budgets. This, in turn, benefits consumers by
providing them with significant additional choice from a variety of
different businesses at a glance. This type of marketing also provides
an alternative avenue for digital advertising to tech giants like
Facebook and Google, thereby helping to promote competition more
broadly in the digital world. Marketers thus play an important role in
fostering consumer choice and market competition.
To understand further the benefits provided by marketers to
consumers, we provide a typical example of how marketers help
beneficiaries connect with licensed agents. For example, a beneficiary
with original Medicare who is in search of dental care might be
visiting a dentist and learn that original Medicare provides no
coverage for these services. Frustrated, she may go online and type:
``Why doesn't Medicare cover my dental care?'' into her search engine
and find a truthful and accurate website (operated by a marketer)
explaining that dental benefits are not included in original Medicare,
but that some Medicare Advantage plans do, in fact, offer certain
dental benefits. Prior to visiting the website, the beneficiary in this
example not only was unaware that some Medicare Advantage plans may
offer certain dental benefits, but she was entirely unaware of the
availability of certain alternatives to original Medicare. The website
may provide the beneficiary with the option to request up to three
licensed agents to call her and discuss the Medicare Advantage plans
that they offer. The beneficiary doesn't need to search the yellow
pages for an agent, make an appointment, get dressed, drive across
town, and meet in person at an office (or invite an agent into her
home). Instead, the beneficiary can submit the webform and shortly
thereafter she can receive the calls she requested from the licensed
agents, who present the beneficiary with the information that she
desires. This allows the beneficiary to easily, and without cost or
inconvenience, explore multiple available options and make an informed
choice as to what coverage she wants.
The marketer operating the website in the example above not only
helps the beneficiary to efficiently connect with licensed agents and
compare plan options, but it also helps the licensed agents to compete
in the marketplace against massive insurance carriers and dominant
market players. Marketers who operate websites such as in the example
may provide referrals to potentially thousands of different agents,
with the actual referral dependent on variable factors such as the
beneficiary's zip code, the licensed agent's availability to call the
beneficiary at the requested time, etc. Because the marketer operates
its website at scale, it is able to provide costly and complex digital
advertising strategies at accessible prices for even the smallest
insurance agency or broker. In other words, the most modest ``mom and
pop'' insurance shop is able to affordably compete with the largest
market players for the exact same customers, which promotes competition
and consumer choice. As mentioned above, the services offered by
marketers are the lifeblood for small insurance agents and brokers
throughout the country who rely on these marketers for helping to reach
consumers.
III. It is unfair to malign an entire industry based on the deceptive
and illegal acts of some dishonest actors. Most industry
participants are honest, hardworking, and strive to be transparent
with their customers.
Although IMC recognizes that there are bad actors within the
insurance industry, as is true with any industry, it is grossly unfair
to assume that the vast majority of responsible, law-abiding industry
participants are committing the same wrongs as those bad actors. The
examples of deceptive marketing materials and tactics do not accurately
reflect the practices of most industry participants. The members of IMC
collectively interact with millions of consumers each year, either as
marketers or as service providers. The overwhelming majority of
consumers appreciate these experiences and find them valuable. Given
the valuable services that marketers, agents and brokers provide to
both consumers and businesses, the marketing industry should be
commended, not maligned, and caution should be taken not to take
actions that would hurt consumer choice and competition in favor of
larger corporate organizations.
IMC members and others within the insurance industry take
compliance seriously, care deeply about ensuring a positive consumer
experience, and are highly incentivized to prevent consumers from
receiving deceptive advertisements or unwanted contact. IMC's
employees, managers, and leaders are real people, many with family
members on Medicare, and who participate in civic and volunteer
organizations. Insurance agents and brokers who retain the services of
marketers do not want and find no value in referrals of customers who
are upset or surprised about being called, or who have been misled by
dodgy advertisements. Marketers that reliably deliver genuinely
interested consumers are rewarded by the marketplace. Building
relationships of trust with consumers is critical to success for many
agents and brokers, who depend on reputation, referrals, and repeat
customers, and it is grossly unfair to collectively portray them as
money-grubbing scoundrels or crooks.
This is not to say that there are not bad actors. There are. Which
is why IMC supports legal action against those who break the law. But
the harm caused by bad actors cannot be fairly attributed to the
industry as a whole, nor should it be used as a reason to abolish the
services they provide. Indeed, as an example, a single bad actor can
alone generate billions of unwanted calls to consumers.\4\ There is
thus no basis to assume from the volume of deceptive or unlawful
practices that the cause is widespread.
---------------------------------------------------------------------------
\4\ For example, government agencies have brought actions involving
billions of illegal calls by a single bad actor. See, e.g., ``FTC
Crackdown Stops Operations Responsible for Billions of Illegal
Robocalls'' at https://www.ftc.gov/news-events/news/press-releases/
2019/03/ftc-crackdown-stops-operations-responsible-billions-illegal-
robocalls.
IV. Legislators should encourage regulatory agencies and law
enforcement to crack down on deceptive practices under existing
laws, while avoiding reactionary measures that would hurt consumer
choice and competition while punishing law-abiding industry
---------------------------------------------------------------------------
participants.
The IMC is deeply concerned about potential regulatory overreach
intended to address practices that are already illegal under existing
law. Such overreach, although well intended, threatens consumer choice,
competition, and the livelihood of law-abiding business owners.
Deceptive advertising, for example, is already illegal under a
multitude of statutes and regulations, such as Section 5 of the FTC
Act, state UDAAP laws, and CMS marketing regulations. Unsolicited
telemarketing calls are similarly illegal under a variety of statutes
and regulations, such as the Telephone Consumer Protection Act,
Telemarketing Sales Rule, CMS marketing regulations, and analogous
state laws.
Recently, in a purported effort to address practices that are
already illegal under current law, a variety of agencies have
considered regulations that would strip consumers of their ability to
make informed decisions for themselves, while stifling the ability of
small businesses to compete in the marketplace. For example, the FCC is
considering a proposal that would effectively put an end to efficient
comparison shopping (such as the example set forth above in Section I
of the beneficiary who was searching for information on dental coverage
and was able to easily connect with multiple licensed agents to discuss
options). CMS recently proposed to deprive beneficiaries of their
ability to decide for themselves how their personal information is used
by enacting a regulation that would prohibit the transfer of
beneficiary data between TPMOs, even when the beneficiary requests that
their data be transferred. We understand that the Committee supports
implementing this regulation. However, it is a radical proposal that
cuts directly against the grain of existing privacy law regimes,
including HIPAA, all of which recognize consumer choice as a
fundamental element to personal privacy rights. IMC has submitted
comments in response to the above-mentioned FCC and CMS proceedings,
which we encourage the Committee and lawmaker staff to review for
further information on how these proposals miss their intended marks
entirely and would do far more harm than good for American consumers
and businesses.\5\
---------------------------------------------------------------------------
\5\ See IMC Initial Comments (https://www.fcc.gov/ecfs/search/
search-filings/filing/1050833302323) and Reply Comments (https://
www.fcc.gov/ecfs/search/search-filings/filing/10606772724875) filed in
FCC CG Docket No. 21-402 (Targeting and Eliminating Unlawful Text
Messages) and FCC CG Docket No. 02-278 (Rules and Regulations
Implementing the Telephone Consumer Protection Act of 1991), and IMC
Comments (https://www.regulations.gov/comment/CMS-2022-0191-0669) filed
in CMS docket Contract Year 2024 Policy and Technical Changes to the
Medicare Advantage Program, Medicare Prescription Drug Benefit Program,
Medicare Cost Plan Program, Medicare Parts A, B, C, and D Overpayment
Provisions of the Affordable Care Act and Programs of All-Inclusive
Care for the Elderly; Health Information Technology Standards and
Implementation Specifications.
Promulgating rules and regulations is relatively easy, but without
enforcement, is ineffective. The unlawful acts and practices that the
Committee seeks to eradicate are engaged in by bad actors that will
simply ignore new rules and regulations and continue operating
illegally unless and until they are caught and stopped. For example,
the unwanted and annoying calls that bombard consumers are mostly made
by foreign actors, not U.S. businesses.\6\ Further, the bad acts
carried out by few are magnified due to technology.\7\ The same is true
of deceptive advertising: a single scofflaw can easily target millions
of consumers with deceptive mailers, TV ads, websites, etc. But the
illegal acts of relatively few should not be the rationale for
infringing consumer choice and hurting competition. In the quest to
eradicate unwanted calls and deceptive advertising, care must be taken
to avoid rules that would frustrate consumers' ability to receive
desired calls and prohibit truthful advertising.
---------------------------------------------------------------------------
\6\ See, e.g., FCC December 23, 2022 Report to Congress (noting
that ``Foreign-originated calls are a significant portion, if not the
majority, of illegal robocalls . . .'' and referencing multiple
enforcement actions involving billions of illegal calls made without
consent), available at https://docs.fcc.gov/public/attachments/DOC-
390423A1.pdf. See also ``Who's Making All Those Scam Calls?'', NY
Times, available as of May 6, 2023 at https://www.nytimes.com/2021/01/
27/magazine/scam-call-centers.html.
\7\ Indeed, government agencies have brought actions involving
billions of illegal calls by a single bad actor as noted above in FN 4.
More enforcement, not more regulation, is the antidote. After all,
no amount of traffic laws will change some drivers' behaviors, unless
there is regular and consistent enforcement. IMC recognizes that
enforcement is easier said than done. Federal and state regulators have
limited resources, and those resources should be used where likely to
have the greatest impact. IMC thus encourages the Committee to exercise
restraint in promulgating new rules and regulations, and to encourage
agencies (over which Congress controls funding) to similarly exercise
restraint in promulgating ill-advised regulations while encouraging
vigorous enforcement action under existing laws and regulations.
CONCLUSION
The IMC supports the Committee's effort to ensure transparency with
consumers and protect them from deceptive and abusive practices. But
the solution lies in enforcement of existing laws and regulations, not
through other means. Thank you for your time and consideration of our
coalition's statement.
______
Letter Submitted by Carola Gay Knutson
October 18, 2023
U.S. Senate
Committee on Finance
Medicare Advantage Plans
I am a faithful, active, registered voter living in Port Angeles,
Washington. It is my hope that my senators, Maria Cantwell and Patty
Murray, along with my Congressman, Derek Kilmer, will take more serious
notice of the alarming financial and personal issues created by the so-
called ``advantage'' plans. So far, my representatives have shown
little interest in this topic.
Though numbers may vary, it is clear that these plans are helping draw
down millions and millions of dollars in precious Federal funds,
depositing them into the accounts of insurance companies. This waste
cannot be sustained. I know I need not catalog the many issues
involving medical testing, coding, billing, fraud and so on as you
likely have committed this list of issues to memory. I have personally
heard healthcare providers as well as credible senior citizens'
advocates speak numerous times on this subject. The Internet had
recently experienced a ground swell of interest in this topic, also.
If the waste of resources was not enough, there are countless stories
of patients whose health has been compromised by timing issues caused
by referral problems.
We seniors have worked hard our entire lives and need to be assured
that the Social Security and Medicare programs won't run out of funds
in our lifetimes, as well as the lifetimes of our children. Something
needs to be done immediately to stop this hemorrhaging of money.
I would ask that you seriously consider abolishing advantage programs
as well as continuing to raise the rates/percentage of payment by high
income earners. We are the only first world nation I know of that does
not have its act together with regard to medical care and other
services for its population. No wheels need to be reinvented . . . look
to the Scandinavians, for example, and follow their lead. I have heard
that we're actually paying less taxes (in today's dollars) than we were
during the Eisenhower Era. Elected officials need the courage to buck
the anti-tax contingent and big insurance companies.
For myself, I'd rather pay more taxes and get good services and
infrastructure than pay fewer taxes and have a half-baked country.
Carola Gay Knutson
______
Letter Submitted by Gregory J. Lawson
October 23, 2023
U.S. Senate
Committee on Finance
Most companies who offer Medicare Advantage (MA) programs require
patients to pay excessively high co-payments for therapies (Physical
Therapy (PT), Occupational Therapy (OT), Speech Therapy (ST), Cardiac
Rehabilitation (CR), and Pulmonary Rehabilitation (PR)). This fact is
not clear to most potential enrollees, partly because most enrollees
are not shopping for MA programs based on a potential need for therapy
services.
Nevertheless, companies who contract with MA continue to restrict
access to therapy services by often imposing ``specialty'' co-pays of
$20 to $50 and sometimes as high as $75 per visit, limiting the
frequency and duration of care a patient is able to afford. This
practice unfairly treats these therapies, a routine health service, as
a specialty service. Specialty copays are intended for specialized
medical services or medical specialties, such as cardiology,
orthopedics, neurology, and pulmonary.
Legislation appears to be the only way to prohibit a health payer from
inappropriately shifting the cost of care onto consumers by limiting
therapy co-payments to no greater than that of the co-pay of an office
visit to a physician or osteopath.
The practice of treating therapy providers as ``specialists'' has
allowed MA payers to require consumers to pay the entire or nearly the
entire cost of therapy care. The excessive copay amounts often results
in patients paying more out of pocket for therapy than they do any
surgery, imaging, or pharmacy that they have had.
The financial implication of excessive co-pay amounts results in
disincentives for patients to participate in therapy resulting in lack
of compliance for their care. This can result in significant recurrence
and downstream costs including further surgery, imaging, and pharmacy.
Since PT, OT, ST, CR, and PR frequently require multiple visits over an
extended period of time as the practice of these therapies works in
conjunction with the healing process, many consumers are forced to pay
nearly $600 per month in out-of-pocket expenses to receive therapy
services. This is in addition to the cost of health insurance paid by
the consumer. Decisions to reduce the frequency or duration of their
care or not to even initiate therapy has led to poor outcomes and
complications which only lead to higher costs for health care in the
future.
Fair co-pays lead to better outcomes and improved access. In these
difficult economic times, it is a struggle for the average working
patient to afford what they thought was a covered service.
I have contacted Senator Murray's office about this issue. I worked in
Cardiac Rehab for 40 years, so I am well aware of how these high co-
pays can limit a patient's recovery from a cardiac event.
Gregory J. Lawson
Medicare Rights Center
New York Washington, DC
266 West 37th Street, 3rd Floor 1444 I Street, NW, Suite 1105
New York, NY 10018 Washington, DC 20005
Phone: 212-869-3850 Phone: 202-637-0961
The Medicare Rights Center (Medicare Rights) appreciates this
opportunity to submit a statement for the record on the October 18,
2023, hearing of the U.S. Senate Committee on Finance, titled
``Medicare Advantage Annual Enrollment: Cracking Down on Deceptive
Practices and Improving Senior Experiences.'' Medicare Rights is a
national, nonprofit organization that works to ensure access to
affordable and equitable health care for older adults and people with
disabilities through counseling and advocacy, educational programs, and
public policy initiatives. Each year, Medicare Rights provides services
and resources to nearly 3 million people with Medicare, family
caregivers, and professionals.
Medicare is a vital, life-saving program that protects the health and
well-being of over 66 million older adults and people with
disabilities.\1\ As people join Medicare, and every year afterward,
they have choices to make about how they will receive their coverage. A
growing number select Medicare Advantage (MA), also known as a Medicare
private health plan or Part C. Individual needs, preferences, and
priorities typically guide these enrollment choices.
---------------------------------------------------------------------------
\1\ Centers for Medicare and Medicaid Services, ``Access to Health
Coverage'' (last visited October 31, 2023), https://www.cms.gov/pillar/
expand-access.
Unfortunately, there are other factors influencing these choices as
well, including predatory marketing, widespread confusion, and a lack
of sufficient tools and guardrails to ensure coverage choices are
---------------------------------------------------------------------------
informed and optimized.
At Medicare Rights, we frequently hear from beneficiaries who need help
understanding their Medicare coverage options and making enrollment
decisions. The MA plan landscape is overwhelmingly cluttered. Recent
statutory and regulatory changes, such as the elimination of meaningful
difference and uniformity requirements, as well as reduced network
adequacy standards and booming profits--in part due to MA overpayment--
have led to an influx of plans, with single sponsors often offering
multiple plans in any given area.\2\
---------------------------------------------------------------------------
\2\ Medicare Payment Advisory Commission, ``Medicare Payment
Policy: Report to the Congress,'' (March 2022), https://www.medpac.gov/
wp-content/uploads/2022/03/Mar22_MedPAC_
ReportToCongress_SEC.pdf.
During open enrollment for 2023, the average beneficiary had 43
different MA plans from which to choose. This is more than double the
number in 2018 and does not even include employer-sponsored plans,
Special Needs Plans (SNPs), cost plans, or Medicare-Medicaid integrated
plans, all of which are additionally available to some
beneficiaries,\3\ or fully capture geographic differences. In 27
counties, more than 75 plans were offered.
---------------------------------------------------------------------------
\3\ Meredith Freed, et al., ``Medicare Advantage 2023 Spotlight:
First Look'' (November 10, 2022), https://www.kff.org/medicare/issue-
brief/medicare-advantage-2023-spotlight-first-look/.
Most beneficiaries (60%) had plans available from fewer than 10
companies. In 1,136 counties (accounting for 50% of beneficiaries), at
least one company offered 10 or more plans. This is also reflected in
the enrollment numbers. Two companies, UnitedHealthcare and Humana,
---------------------------------------------------------------------------
accounted for 46% of MA enrollment in 2022.
Plans can vary on everything from costs to coverage, sometimes in
subtle but important ways. For most beneficiaries, this makes close
analysis both critical and unattainable. Indeed, identifying and
simultaneously comparing each plan deviation, year after year, is a
challenging, intimidating, and time-consuming task that few people with
Medicare perform.\4\ Instead, they may rely on heuristics like where
their neighbors or friends get coverage. Worse, they may rely on
marketing that is designed to lure them with promises of benefits they
may not be eligible for or that may be so limited as to be essentially
worthless.
---------------------------------------------------------------------------
\4\ See, e.g., Meredith Freed, et al., ``More Than Half of All
People on Medicare Do Not Compare Their Coverage Options Annually,''
Kaiser Family Foundation (October 29, 2020), https://www.kff.org/
medicare/issue-brief/more-than-half-of-all-people-on-medicare-do-not-
compare-their-coverage-options-annually/; Wyatt Korma, et al., ``Seven
in Ten Medicare Beneficiaries Did Not Compare Plans Past Open
Enrollment Period,'' Kaiser Family Foundation (October 13, 2021),
https://www.kff.org/medicare/issue-brief/seven-in-ten-medicare-
beneficiaries-did-not-compare-plans-during-past-open-enrollment-
period/.
Complex analyses of seemingly endless plan designs may be particularly
burdensome for consumers with limited English proficiency, those who
have cognitive impairments or other serious health needs, and people
with inadequate Internet access. Despite the severe consequences of
making a poor plan choice--such as high costs, restricted provider
access, and delayed care--there are few remedies. If an enrollee makes
a mistake, they may be stuck in a plan that does not meet their needs
for up to a year, or could be locked into MA indefinitely because of
---------------------------------------------------------------------------
the high cost of Medigap coverage.
In one series of KFF focus groups, consumers reported feeling
overwhelmed and inundated by Medicare marketing.\5\ They received
unwelcome and unsolicited phone calls from brokers and plan
representatives, sometimes with no clear information about who was
calling. And they reported that TV ads were often misleading and
deceptive, and that it was often unclear whether the government or a
private company was behind the ad.
---------------------------------------------------------------------------
\5\ Meredith Freed, et al., ``What Do People with Medicare Think
About the Role of Marketing, Shopping for Medicare Options, and Their
Coverage?'' (September 15, 2023), https://www.kff.org/medicare/report/
what-do-people-with-medicare-think-about-the-role-of-marketing-
shopping-for-medicare-options-and-their-coverage/.
Research shows that marketing by MA plans is a major source of
information for many consumers.\6\ Such marketing is not objective; it
only touts the benefits of MA, not the tradeoffs, and complaints about
misleading marketing are on the rise as TV ads become more
prevalent.\7\ This points to the need to extend and improve information
access about the pros and cons of Original Medicare and MA to ensure
people are getting the full picture.
---------------------------------------------------------------------------
\6\ Faith Leonard, et al., ``Traditional Medicare or Medicare
Advantage: How Older Americans Choose and Why'' (October 17, 2022),
https://www.commonwealthfund.org/publications/issue-briefs/2022/oct/
traditional-medicare-or-advantage-how-older-americans-choose.
\7\ Victoria Knight, ``Medicare Advantage has a marketing problem''
(September 8, 2022), https://www.axios.com/2022/09/08/medicare-
advantage-marketing-problem.
For example, there are no clear rules about how MA plans and brokers
may market supplemental benefits to current or potential enrollees.
According to a recent Commonwealth Fund analysis, 24% of those who
opted for MA were drawn by the extra benefits.\8\
---------------------------------------------------------------------------
\8\ Faith Leonard, et al., ``Traditional Medicare or Medicare
Advantage: How Older Americans Choose and Why'' (October 17, 2022),
https://www.commonwealthfund.org/publications/issue-briefs/2022/oct/
traditional-medicare-or-advantage-how-older-americans-choose.
The KFF and Commonwealth findings echo what we often hear from
beneficiaries about the challenges of enrolling in Medicare initially
and the complexity of re-
evaluating their coverage every year. In our experience, people find
Medicare coverage choices overwhelming and are confused about how
Medicare works. This includes confusion about the different parts of
the program, what is included in an MA plan and any supplemental
benefits, the tradeoffs of switching to MA, and what the differences
---------------------------------------------------------------------------
are between MA and Medigap or other supplemental coverage.
Confused beneficiaries then may seek help, and research shows that most
people who receive help choosing between their coverage options turn to
brokers and agents rather than objective sources.\9\ Agents and brokers
receive commissions and will be paid more for enrolling people into MA
plans than into supplemental coverage like Medigap.\10\ This may create
an incentive for agents and brokers to steer consumers into MA.
---------------------------------------------------------------------------
\9\ Faith Leonard, et al., ``Traditional Medicare or Medicare
Advantage: How Older Americans Choose and Why'' (October 17, 2022),
https://www.commonwealthfund.org/publications/issue-briefs/2022/oct/
traditional-medicare-or-advantage-how-older-americans-choose.
\10\ Riz Ali and Lesley Hellow, ``Agent Commissions in Medicare and
the Impact on Beneficiary Choice'' (October 12, 2021), https://
www.commonwealthfund.org/blog/2021/agent-commissions-medicare-and-
impact-beneficiary-choice.
Once in MA, enrollees can encounter unexpected prior authorization and
network limitations, as well as higher than anticipated co-pays.\11\ To
ensure people better understand the tradeoffs, we urge better
government informational materials and decision-making tools that are
complete and unbiased. If information about MA touts the potential for
MA to decrease beneficiary costs, it must also alert the consumer to
the potential that it will raise costs and the risk of losing access to
valued providers. In addition, supplemental benefits need marketing
guardrails to ensure any communications about them include information
about their limitations. Without such guardrails, nothing prevents
supplemental benefits from being used merely or primarily as a sales
tool.
---------------------------------------------------------------------------
\11\ Meredith Freed, et al., ``What Do People with Medicare Think
About the Role of Marketing, Shopping for Medicare Options, and Their
Coverage?'' (September 15, 2023), https://www.kff.org/medicare/report/
what-do-people-with-medicare-think-about-the-role-of-marketing-
shopping-for-medicare-options-and-their-coverage/.
Although Medicare Plan Finder has information about specific plans, it
is limited, especially when it comes to cost comparisons and
supplemental benefits. Plan Finder can also be confusing to use due to
the number of plan choices and the complexity of MA and Part D
structures. In addition, people are not able to search by network
providers. Even outside of Plan Finder, provider directories are wholly
---------------------------------------------------------------------------
inadequate and riddled with errors.
We suggest improving Medicare Plan Finder by integrating plan network
data, individual claims history, and more realistic and predictive
estimated costs. We also support including more information about
supplemental benefits, like coverage and eligibility limits. Medicare
Plan Finder must not be a marketing tool for MA plans to bolster
enrollment.
We also ask Congress to provide increased funding for State Health
Insurance Assistance Programs (SHIPs) like Ohio Senior Health Insurance
Information Program (OSHIIP) so ably represented by Christina Reeg.
Despite being a primary, trusted source of unbiased enrollment
counseling, SHIP funding is unable to keep pace with growing demands,
driven by an aging population, MA enrollment increases, and an ever
more complex plan selection process.
As always, we also note that many people struggle to enroll in Medicare
in the first place. Among the most frequent calls to Medicare Rights'
National Helpline are from or on behalf of people trying to understand
their options and navigate enrollment.\12\ For many, including those
who must actively enroll, this can be a confusing and overwhelming
time.
---------------------------------------------------------------------------
\12\ Medicare Rights Center, ``Medicare Trends and Recommendations:
An Analysis of Call Data from the Medicare Rights Center's National
Helpline, 2020-2021'' (May 2022), https://www.medicarerights.org/
policy-documents/2020-2021-medicare-trends-and-recommendations.
Most people new to Medicare are automatically enrolled because they are
receiving Social Security when they become eligible--but a growing
number are not.\13\ These individuals must enroll on their own, taking
into consideration specific timelines, intricate Medicare rules, and
any existing coverage. Mistakes are common and carry serious
consequences, including lifelong financial penalties, high out-of-
pocket health care costs, disruptions in care continuity, and gaps in
coverage.
---------------------------------------------------------------------------
\13\ See, e.g., Medicare Payment Advisory Commission, ``Report to
the Congress: Medicare and the Health Care Delivery System'' (June
2019), http://www.medpac.gov/docs/default-source/reports/
jun19_medpac_reporttocongress_sec.pdf?sfvrsn=0.
---------------------------------------------------------------------------
Conclusion
As MA enrollment, plan numbers, and costs grow,\14\ it is increasingly
important to ensure the program is working well for enrollees. It is
clear there is ample room for reform. MA advertising is misleading and
rampant. Plan selection is overly onerous, and official Medicare
resources under-utilized. There are too many barriers to care and
informed decision-making, and too few options for relief. People with
Medicare need stronger consumer protections, more reliable coverage,
and tougher plan oversight--without delay.
---------------------------------------------------------------------------
\14\ Medicare Rights Center, ``Medicare Advantage 101'' (July
2023), https://www.medicare
rights.org/policy-series/medicare-advantage-101.
Thank you for your consideration and leadership. The Medicare Rights
---------------------------------------------------------------------------
Center looks forward to continued collaboration.
For further information:
Lindsey Copeland
Federal Policy Director
[email protected]
______
National Association of Benefits and Insurance Professionals
999 E Street, NW, Suite 400
Washington, DC 20004
https://nabip.org/
I am writing on behalf of the National Association of Benefits and
Insurance Professionals (NABIP), a professional association
representing over 100,000 licensed health insurance agents, brokers,
general agents, consultants and employee benefits specialists. The
members of NABIP help millions of individuals and employers of all
sizes purchase, administer and utilize health plans of all types.
The health insurance agents and brokers that NABIP represents are a
vital piece of the health insurance market and play an instrumental
role in assisting employers and individual consumers with choosing the
health plan or plans that are best for them. Eighty-two percent of all
firms use a broker or consultant to assist in choosing a health plan
for their employees \1\ and 84 percent of people shopping for
individual exchange plans found brokers helpful--the highest rating for
any group assisting consumers.\2\ During the 2023 open enrollment
period, agents and brokers assisted 71 percent of those who enrolled
through HealthCare.gov or a private direct enrollment partner's
website. Additionally, premiums are 13 percent lower in counties with
the greatest concentration of brokers.\3\
---------------------------------------------------------------------------
\1\ Kaiser Family Foundation. Employee Health Benefits Annual
Survey. October 2013, https://www.kff.org/wp-content/uploads/2012/09/
8465-employer-health-benefits-2013.pdf.
\2\ Blavin, Fredric, et al. Obtaining Information on Marketplace
Health Plans: Websites Dominate but Key Groups Also Use Other Sources.
Urban Institute. June 2014, https://hrms.urban.org/briefs/obtaining-
information-on-marketplace.html.
\3\ Karaca-Mandic, Pinar, et al. The Role of Agents and Brokers in
the Market for Health Insurance. National Bureau of Economic Research.
August 2013, https://www.nber.org/papers/w19342.
Independent, licensed and certified agents and brokers also assist
seniors with their plan options in the Medicare market. Many agents
working with seniors are the most experienced agents in the business
and are sometimes close in age to the Medicare beneficiaries they
serve. Providing outstanding consumer service that is tailored to each
individual beneficiary is in the best interest of every agent and every
Medicare beneficiary. Individuals qualifying for Medicare at age 65
typically have 3 months before their 65th birthday, their birthday
month, and 3 months following their birthday month to explore their
options and make choices. Thereafter, they can change their choice
annually during the Annual Enrollment Period (AEP), which is underway
now. Because of the complexity of the plan-selection process, many
beneficiaries rely on licensed and certified insurance agents to help
them identify the coverage and benefits options that best meets their
needs. Independent agents assist Medicare beneficiaries with all of the
options available to them, including Medicare supplements, Medicare
---------------------------------------------------------------------------
Part D and Medicare Part C, known as Medicare Advantage.
As of August 2023, over 60 million individuals were enrolled in one or
more parts of the Medicare program. Among that population, over 30.8
million Medicare beneficiaries were covered by Medicare Advantage (MA)
coverage.\4\ The broad availability of MA plan options means seniors
have an array of plan choices for their health insurance coverage. MA
plans also offer supplemental benefits that are often not covered by
traditional fee-for-service Medicare. Most enrollees are in plans that
provide access to eye exams or glasses, telehealth services, dental
care, a fitness benefit and hearing aids. MA products provide other
affordable, high-quality services as well, including care coordination,
disease-management programs, access to community-based programs and
out-of-pocket spending limits.
---------------------------------------------------------------------------
\4\ Ochieng, Nancy. Medicare Advantage in 2023: Enrollment Update
and Key Trends. Kaiser Family Foundation. 9 August 2023, https://
www.kff.org/medicare/issue-brief/medicare-advantage-in-2023-enrollment-
update-and-key-trends/.
Medicare Advantage products also provide necessary coverage to some of
the most underserved populations. Compared to beneficiaries enrolled in
both Part A and Part B, beneficiaries enrolled in MA are more likely to
report incomes below 100 percent of the Federal Poverty Level, with 52
percent of enrollees earning less than 200 percent of the FPL.\5\
Nearly two-thirds of MA beneficiaries (60 percent) pay no premium for
their plan other than the Medicare Part B premium.\6\ MA beneficiaries
are more likely to be 75 years of age or older and have educational
attainment less than high school. Additionally, MA enrollees were more
likely than fee-for-service Medicare enrollees to be dually enrolled
and to have multiple health conditions.\7\ Medicare Advantage
beneficiaries also include a higher percent of Black and Latino
beneficiaries than in fee-for-service Parts A and B; 53 percent of
Latino Medicare beneficiaries and 49 percent of Black Medicare
beneficiaries are enrolled in MA. While approval of MA coverage is high
across all populations, non-white beneficiaries report an even higher
level of satisfaction, with 99 percent reporting that they were
satisfied with their coverage.\8\
---------------------------------------------------------------------------
\5\ Better Medicare Alliance. Medicare Advantage Outperforms Fee-
for-Service Medicare on Cost Protections for Low-Income and Diverse
Populations. April 2022, https://bettermedicarealliance.org/wp-content/
uploads/2022/04/BMA-Medicare-Advantage-Cost-Protections-Data-
Brief_FINv2.pdf.
\6\ Freed, Meredith, et al. A Dozen Facts About Medicare Advantage
in 2020. Kaiser Family Foundation. 13 January 2021, https://
www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-
advantage-in-2020/.
\7\ HHS Assistant Secretary for Planning and Evaluation Office of
Health Policy. Medicare Beneficiary Enrollment Trends and Demographic
Characteristics. 2 March 2022, https://aspe.hhs.gov/sites/default/
files/documents/f81aafbba0b331c71c6e8bc66512e25d/medicare-beneficiary-
enrollment-ib.pdf.
\8\ Better Medicare Alliance. Medicare Advantage Satisfaction Hits
New High Amid COVID-19 Crisis. 21 January 2021, https://
www.commonwealthfund.org/publications/issue-briefs/2021/oct/medicare-
advantage-vs-traditional-medicare-beneficiaries-differ.
The share of the Medicare population enrolled in MA plans grew from 24
percent in 2013 to 51 percent in 2023--a 112 percent increase in
enrollment over 10 years. Today, 96 percent of Medicare Advantage
beneficiaries are satisfied with their quality of care.\9\
---------------------------------------------------------------------------
\9\ Jacobson, Gretchen, et al. Medicare Advantage vs. Traditional
Medicare: How Do Beneficiaries' Characteristics and Experiences Differ?
Commonwealth Fund. 14 October 2021, https://www.commonwealthfund.org/
publications/issue-briefs/2021/oct/medicare-advantage-vs-traditional-
medicare-beneficiaries-differ.
When consumers are considering their Medicare plan options or are
looking for specific drugs and services to be covered, there is no
greater resource than a licensed agent or broker. Brokers educate
clients on how Medicare works (both broadly and in conjunction with
other coverage options), research physician networks and prescription
formularies for the plans to ensure a suitable health and drug plan is
recommended, and review plan comparison and enrollment changes
annually. The assistance that agents provide does not end with the AEP;
agents provide ongoing support throughout the plan year (such as with
---------------------------------------------------------------------------
billing problems or claims issues).
By taking the time to understand the unique requirements and
preferences of each beneficiary, agents offer tailored solutions and
answer any questions a beneficiary may have. This personalized
interaction not only simplifies the decision-making process but also
addresses individual concerns, making beneficiaries feel valued and
understood. Independent agents are also almost always members of the
same communities that their clients live in. Above all else, Medicare
agents offer a human connection and empathetic understanding of a
beneficiary's position, thus providing comfort during a time many
seniors find stressful.
Medicare agents often obtain clients through referrals, which is a type
of lead that can only be achieved by providing great service to a
beneficiary. Personal referrals are the primary source of lead
generation by independent agents. The beneficiary who is referred
usually contacts the agent, who then follows up to provide detailed
information about Medicare choices and guide them through the
enrollment process. Many independent agents represent multiple carriers
while others are considered ``captive agents'' and work for just one
carrier. Agents are paid commissions from the carriers, with rates set
by federal regulators.
Independent Medicare agents must be licensed, undergo several hours of
training, and are required by law to be certified before selling MA
plans. Agent marketing practices for Medicare Advantage are strictly
regulated by CMS, along with carrier-specific oversight. Most states
also require licensed insurance agents to complete continuing education
courses to maintain their license, ensuring that agents are always
informed about the ever-changing landscape of Medicare benefits.
Unfortunately, recent Medicare regulations have grouped independent
agents and brokers with unscrupulous third-party marketing
organizations, or TPMOs. Lead-generation and marketing entities have
traditionally been defined as TPMOs. The call centers they control have
engaged in bad-faith practices for several years, airing television
commercials that leverage a celebrity's popularity and credibility to
attract the attention of Medicare beneficiaries, with the goal of
enrolling the beneficiary in supplemental plans they may not need--
purely for the pursuit of profit.
TPMO call centers feature auto-dialers and other productivity tools
that maximize the number of calls in a day, which prioritizes the
quantity of consumers contacted over the quality of assistance
provided. NABIP members report that it is not unusual for a call center
representative to average over 40 enrollments in just one month, with
calls lasting less than 20 minutes. In contrast, the average production
of a successful traditional independent agent is between 10 and 15
enrollments in a month.
Additionally, TPMOs can include ad agencies and lead-generation
companies that are not regulated by CMS. Unlike the personal referrals
that make up most independent agents' books of business, TPMO call
centers commonly engage in other types of lead-generation activities.
Outside of the ``television leads'' that a TPMO obtains when airing
previously mentioned advertisements, vendors sell different types of
leads--from shared leads (sold to multiple buyers at a low price) to
exclusive leads (sold to one buyer at a high price before being
repackaged and resold as a shared lead). These leads are sometimes sold
as part of a larger financial package marketed as relatively easy
profit. Such lead-generation practices result in multiple undesired
cold calls to Medicare beneficiaries.
These call centers also commonly employ ``fronters,'' which are
unlicensed entities from call centers that are often (but not always)
offshore. Fronters use an Internet lead to call a Medicare beneficiary
and qualify the beneficiary's interest in the insurance consultation.
Once that is done, the beneficiary is transferred by phone to the TPMO
call center.
Independent agents should not, under any circumstances, be lumped into
the same group as TPMO call centers. As previously mentioned, agents
are state-licensed, certified by the plans they contract with, pay
attention to clients' specific needs, and take care of their clients
year-round. TPMOs, on the other hand, only have interest in enrolling
beneficiaries in certain plans (regardless of whether it is the correct
fit for the beneficiary) and have no interest in establishing a genuine
relationship with the beneficiary as a servicing agent.
CMS stated in recent regulation that the government cannot determine
which entities are contributing to the deceptive television
commercials, who is buying certain leads, and more. While CMS may not
be able to make that determination, a contracted entity, such as an
insurance carrier, can. Carriers already process such information, such
as tracking which entities are the agent of record for a specific
beneficiary. Independents agents should not be regulated as TPMOs, but
separately through the plans they contract with in their respective
states.
Outside of independent agents and TPMO call centers, there are other
actors in the Medicare space that the committee should have a
comprehensive understanding of. Field marketing organizations (FMOs)
play a unique role in the system, serving as an intermediary between
agents and carriers that offer MA and MAPD plans. FMOs operate as
variable cost sales offices working on a contracted basis with multiple
carriers. The organizations provide a wide variety of services that
empower agents and their clients, from handling contracting and
credentialing processes to helping agents navigate the regulatory
environment. For example, many small independent agencies would not be
able to fully comply with recent call-recording requirements without
FMO assistance, since they do not possess the proper technology to
comply with the rule. Without an FMO to provide these services, many
services would fall on the carrier to implement, which would likely
lead to increased premiums. Overall, FMOs are a necessary piece of the
Medicare system and make the enrollment process quicker and smoother
for both the agent and consumer.
FMOs contract with an array of MA and MAPD plans of varying sizes. FMOs
and insurance carriers choose which entities to work with based on a
variety of reasons. For example, a regional FMO may not choose to
contract with a small plan because the FMO seeks to represent all plans
in its region. FMOs may also consider factors like a carrier's star
rating or technology capabilities. Some carriers, on the other hand,
choose not to contract with large national FMOs because they only want
to work with local agencies.
FMOs may have their own call centers, but a distinction must be drawn
between FMO call centers and the TPMO call centers. Unlike TPMO call
centers, FMO call centers are required to follow CMS-approved scripts
with set benchmarks and quality metrics such as retention and
satisfaction. FMOs are the primary servicing point for agents who have
issues concerning the status of an enrollment, commissions and post-
enrollment issues. For these reasons, FMOs should not be equated with
TPMOs that strictly generate leads or operate only as a call center.
Like the Senate Finance Committee, NABIP wants to protect the
vulnerable senior population from the unscrupulous actors in our
healthcare system. Independent agents serve beneficiaries across the
country as trustworthy advocates who provide accurate and ethical
guidance. Ultimately, without licensed and certified agents assisting
in enrollments, Medicare beneficiaries will have few choices in finding
accurate enrollment assistance and will be led directly to the bad
actors that the federal government seeks to protect them from.
We appreciate the opportunity to provide these comments and would be
pleased to respond to any additional questions or concerns of the
committee. If you have any questions about our comments or if NABIP can
be of assistance as you move forward, please do not hesitate to contact
me at [email protected] or (202) 595-3677.
Sincerely,
John Greene
Senior Vice President of Government Affairs
______
People's Action
1301 Connecticut Avenue, NW
Washington, DC 20036
https://peoplesaction.org/
Contact: Megan Essaheb, Director of Federal Affairs,
[email protected].
People's Action's Care Over Cost (https://careovercost.org/) campaign
appreciates the opportunity to submit a written statement for the
record of the hearing, ``Medicare Advantage Annual Enrollment: Cracking
Down on Deceptive Practices and Improving Senior Experiences.''
People's Action builds the power of poor and working people in urban,
rural, and suburban areas to win change through issue fights and
elections. We are a national network of 40 state and local grassroots
power-building organizations in 29 states--united in the work of
building a bigger ``we.''
Everyone should have access to the care they need, when they need it.
Too often, private insurance corporations refuse to pay for health
insurance claims submitted by health care providers in order to
increase their profits. These care denials cause medical debt,
bankruptcy, worse health outcomes, and in some cases even premature
death due to care not received.
People's Action's Care Over Cost campaign is made up of grassroots
groups organizing nationwide to address the systemic problem of care
denials by private insurance corporations. The vast majority of
Americans are affected by care denials, whether that looks like a prior
authorization denial that prevents someone from getting the treatment
they need or insurance's refusal to pay for treatment someone has
already received via a claim denial. The Care Over Cost campaign is
organizing people experiencing care denials and helping them file
appeals and run public pressure campaigns on the insurance corporations
to overturn the denials, and elevating these stories in traditional and
digital media (https://careovercost.org/our-
stories/). Through fighting individual claims, we publicly expose the
injustice and build power and expertise as we build towards policy
campaigns to reduce claims denials and profiteering and build public
support for Medicare for All as we are campaigning.
Medicare Advantage Plans
At People's Action, we believe that health care is a human right and
that it is the Federal Government's job to ensure that people's health
and wellbeing is not negatively impacted by profiteering by
corporations. We are very concerned by reports that the Medicare
Advantage program (``MA'') is draining the Medicare Trust fund to line
the pockets of corporate CEOs and shareholders. Spending per
beneficiary has grown faster in MA than in traditional Medicare, yet
sicker people are more likely to switch back to traditional Medicare in
order to get the care they need.
In recent years, reports have documented that MA is engaging in various
practices of upcoding in order to pad its profits. The New York Times
article, ``How Insurers Exploited Medicare for Billions,'' illustrates
that 9 of the 10 top Medicare Advantage private insurers are either
accused of fraud or overcharging by the federal government.\1\
Sometimes, the private insurance companies kick beneficiaries off of
their plans and send them back to traditional Medicare when their
expenses get too high. That way, they don't have to pay, which would
cut into their profits. The Government Accountability Office (GAO)
reported that MA beneficiaries in the last year of life disenrolled to
join traditional Medicare at more than twice the rate of all other MA
beneficiaries.\2\
---------------------------------------------------------------------------
\1\ Reed Abelson and Margot Sanger-Katz, `` `The Cash Monster Was
Insatiable': How Insurers Exploited Medicare for Billions,'' New York
Times, October 8, 2022, https://www.nytimes.com/2022/10/08/upshot/
medicare-advantage-fraud-allegations.html.
\2\ ``Medicare Advantage: Continued Monitoring and Implementing GAO
Recommendations Could Improve Oversight,'' GAO-22-106026, June 28,
2022, https://www.gao.gov/products/gao-22-106026.
Delays and denials of care are a major concern in Medicare Advantage
plans. Last year, the Department of Health and Human Services Office of
the Inspector General released a report showing that MA plans wrongly
denied 18 percent of payment claims.\3\ This February, a KFF report
found that MA insurers denied over two million prior authorization
requests in 2021.
---------------------------------------------------------------------------
\3\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
The Care Over Cost campaign has supported people on United Healthcare
MA plans in fighting back against unjust denials. United Health Group
is the largest provider of Medicare Advantage plans (27.1% market
share) and is accused of fraud and overbilling by the federal
government.\4\
---------------------------------------------------------------------------
\4\ Reed Abelson and Margot Sanger-Katz, `` `The Cash Monster Was
Insatiable': How Insurers Exploited Medicare for Billions,'' New York
Times, October 8, 2022, https://www.nytimes.com/2022/10/08/upshot/
medicare-advantage-fraud-allegations.html.
United Healthcare denied Carly Morton life-saving surgery that would
allow her to eat again.\5\ Care Over Cost waged a public campaign and
with assistance from thousands of people who signed her petition to
United Healthcare and shared her story on social media and Senator Bob
Casey's office who reached out, we won Carly's prior authorization
request and she had her surgery in late July 2023.\6\ After a rough
couple of months of recovery, Carly says that she is eating and
enjoying food for the first time without pain! However, Carly recently
heard from her surgeon's office that United Healthcare is still trying
to avoid paying part of the bill.
---------------------------------------------------------------------------
\5\ Video of Carly sharing her win of getting the prior
authorization, October 18, 2023, https://www.youtube.com/
watch?v=GBw2pUB8__A&t=122s.
\6\ Video of Carly Morton, People's Action, March 29, 2023, https:/
/twitter.com/PplsAction/status/1641136092081422340.
After two rounds of cancer treatment, side effects from a mastectomy
and breast reconstruction surgery put former State Representative (R-
NH) and emergency medical technician Jenn Coffey (https://
www.levernews.com/care-denied-the-dirty-secret-behind-medicare-
advantage/) in bed for years. Her Medicare Advantage plan through
United Healthcare refused to pay for her treatments, forcing Jenn to
sell her car and fundraise to pay for treatments. Care Over Cost
campaigned to win Jenn approval for her first round of treatment, but
Jenn is now navigating repeated prior-authorization processes that
hinder her care. Care Over Cost and New Hampshire Senators Shaheen and
Hassan continue to work with Jenn to help remove these and other
obstacles to her life-saving care.\7\
---------------------------------------------------------------------------
\7\ Video of Jenn Coffey, People's Action, April 14, 2023, https://
twitter.com/PplsAction/status/1646880876943355904.
---------------------------------------------------------------------------
Deceptive and Wrongful Practices in Advertising
CMS should crack down on MA advertising. A New Hampshire resident
recently shared her experience with organizers from People's Action
member group, Rights and Democracy. Miriam said, ``A Medicare Advantage
company, Wellcare, called my son on his cellphone and signed him up to
switch to their insurance. My son has autism. He is 26 and verbal
enough to talk on the phone. This makes him very vulnerable. He doesn't
understand what the consequences of changing to Medicare Advantage
might be. He can't make these kinds of decisions without help. This
phone conversation messed up his insurance and I am fortunate that I
found out the same day. I was able to undo the changes. It required a
number of phone calls to Wellcare, Medicare and Cigna. All of this is
beyond what my son can deal with.'' These stories are all too common.
More is Needed to Reign in Profiteering by Private Insurance Companies
More broadly CMS and Congress must increase regulation of and consumer
transparency about MA plans and improve traditional Medicare. While we
support CMS's recent efforts to reign in Medicare Advantage plans
overcharging, more needs to be done to improve traditional Medicare and
reign in abuse by Medicare Advantage plans.
Congress should improve traditional Medicare by expanding it to include
dental, vision and hearing and lowering out of pocket costs. Within the
MA program, Congress and CMS must do more to protect vulnerable older
adults and people with disabilities from enrolling in Medicare
Advantage plans that won't meet their needs when they need care. The
government must stop overpaying for Medicare services, especially when
there is no good data to support their value.
Publish claims denial data by plan, gender, race, ethnicity and
other factors to identify inequities and offer people accurate
information when choosing a plan.
Set an appropriate limit on Medicare Advantage plan revenue,
equal to or less than traditional Medicare per enrollee.
Create a standardized claims processing system for all Medicare
Advantage plans that ensures coverage of medically reasonable and
necessary services, with a public--non-proprietary--prior authorization
overlay.
Require Medicare Advantage plans to cover care from all cancer
centers of excellence and other Medicare providers to ensure people
have good access to care.
Collect and share de-identified patient encounter data so that
``value'' can be assessed and there is a robust system for identifying
persisting and emerging health care needs, including the ability to
detect a disease outbreak or the need for greater resources in a
community as a result of a force majeure.
Enact a ``strict liability'' punishment for Medicare Advantage
plans that violate their legal and contractual obligations, including
automatic plan termination for ongoing violators.
______
Physicians for a National Health Program
29 E. Madison Street, Suite 1412
Chicago, IL 60602
PNHP applauds Senators Wyden and Crapo for holding a hearing on this
timely issue. October 15, the start date for Open Enrollment, is a time
when vulnerable senior citizens are subjected to a barrage of phone,
print, billboard, and TV ads touting the benefits of various so-called
Medicare Advantage (MA) plans. What these ads fail to mention is the
significant coverage limitations in MA caused by insufficient provider
networks and abuse of prior authorization requirements. This lack of
transparency ``leaves beneficiaries with an incomplete view of their
coverage options and the tradeoffs among them,'' according to KFF's
analysis \1\ of MA marketing. Indeed, the Senate Finance Committee's
own report \2\ in November 2022 ``found evidence that beneficiaries are
being inundated with aggressive marketing tactics as well as false and
misleading information.''
---------------------------------------------------------------------------
\1\ https://www.kff.org/medicare/press-release/kff-research-shows-
that-medicare-open-enrollment-tv-ads-are-dominated-by-medicare-
advantage-plans-featuring-celebrities-active-and-fit-seniors-and-
promises-of-savings-and-extra-benefits-without-fund/.
\2\ https://www.finance.senate.gov/imo/media/doc/
Deceptive%20Marketing%20Practices%20
Flourish%20in%20Medicare%20Advantage.pdf.
Medicare Advantage plans came into being on the assumption, devoid of
any evidence to support it, that private industry is more efficient
than the Federal Government, and could both reduce costs and improve
quality in the Medicare program. The evidence, gathered over the past
20 years and reported by government agencies, non-governmental
organizations, academics, and journalists, is that these plans do just
the opposite; they increase costs through rampant overpayments,\3\ and
decrease quality of care through insufficient networks and onerous
prior authorization requirements.
---------------------------------------------------------------------------
\3\ https://pnhp.org/system/assets/uploads/2023/09/
MAOverpaymentReport_Final.pdf.
Provider networks are required to demonstrate that they are adequate
\4\--namely, that they contract with enough primary care providers and
specialists to meet the health needs of beneficiaries. However, until
the passage of the No Surprises Act in 2022, there were no regulations
regarding the accuracy \5\ of those networks. Experience has shown that
published networks are notoriously inaccurate, resulting in endless
confusion and frustration for patients as well as costly fragmentation
of care, sometimes with deadly consequences. Medicare-eligible seniors
and people with disabilities deserve to know that the MA plan they
choose may inaccurately list their long-time provider as being in-
network, only to find out later that their provider is not actually
covered.
---------------------------------------------------------------------------
\4\ https://www.cms.gov/newsroom/fact-sheets/contract-year-2021-
medicare-advantage-and-part-d-final-rule-cms-4190-f1-fact-sheet.
\5\ https://www.cms.gov/files/document/a274577-1b-training-2nsa-
disclosure-continuity-care-directoriesfinal-508.pdf.
Nearly all MA enrollees are in plans that require prior authorization
for many services. Government reports in 2018 \6\ and 2022 \7\ found
``widespread and persistent problems related to denials of care and
payment of Medicare Advantage plans.'' These delays and denials can
have catastrophic effects on patients. Medicare-eligible seniors and
people with disabilities deserve to know that the MA plan they are
considering requires prior authorization, and that many hospitals \8\
and doctors \9\ are refusing to contract with MA plans due to excessive
delays and denials not only of care, but of payment for that care. As
networks ``collapse'', patients are caught in the crossfire, having to
wait longer for tests, treatments, and procedures that could mean the
difference between life and death.
---------------------------------------------------------------------------
\6\ https://oig.hhs.gov/oei/reports/oei-09-16-00410.pdf.
\7\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
\8\ https://www.beckershospitalreview.com/finance/hospitals-are-
dropping-medicare-advantage-left-and-right.html.
\9\ https://www.medpagetoday.com/special-reports/exclusives/106483.
We urge the Committee to significantly improve transparency in the
marketing of MA plans. Marketing for plans must be highly restricted
and subject to stringent requirements for accuracy. Harsher penalties
should be imposed on plans that list inaccurate information on their
provider networks. Finally, there needs to be greater oversight of
prior authorization processes to ensure that MA plans are not allowed
to continue delaying and denying necessary care at the expense of
patients. This should include more transparency in data on denials and
penalties for plans that deny any services that would be covered under
---------------------------------------------------------------------------
traditional Medicare.
______
Statement Submitted by Ellen A. Reichart, Esq.
Dear Committee Members:
The following has been my experience with an Aetna Advantage plan:
The issue with Medicare Advantage plans is that they deny coverage for
medical treatment covered by Original Medicare. For example, Original
Medicare covers nerve ablation for pain management (Genicular Knee)
under procedure code procedure code 64624. Original Medicare under CMS
rules does not require the physician to submit pre-approval to Original
Medicare in order to have most procedures covered. When Original
Medicare pays for a procedure it has effectively deemed that procedure
covered under either Part A or Part B. My doctor advised me that
Original Medicare covers the procedure but Aetna Advantage does not and
that if I wanted to have it done I would have to pay $7000 out of
pocket. He said that most of the Advantage plans routinely deny
coverage but Aetna was among the worst. I actually had the procedure
done 2 years ago. It was very effective as I was pain free for 2 years.
The doctor's practice was not paid by Aetna for that procedure--the
practice never balance billed me and I was unaware that the practice
was not paid until July 2023 when I tried to arrange to have it done. I
have been appealing the denial since that time. Under CMS rules
Advantage insured can be required to obtain pre-approval however
because an Advantage plan must cover what Original Medicare covers the
pre-approval is basically a notice requirement. The Advantage plan is
limited to determining medical necessity which can be appealed and
subject to CMS regulations regarding medical necessity.
Aetna Medicare Advantage however denies coverage for the Genicular Knee
ablation because it states that the procedure is investigational and
experimental. There are several NLM publications indicating that the
Genicular Knee procedure is efficacious and has a high success rate for
achieving pain relief. Aetna claims it reviews its policies annually.
Nevertheless Aetna developed its own policy statements and cites
outdated studies unrelated to Genicular Knee nerve ablation in order to
support their denial of coverage. A review of the list of treatments
Aetna does not cover in addition to Genicular Knee nerve ablation
reveal that Aetna is denying coverage for many procedures that Original
Medicare covers. It does not appear that any effort was undertaken by
Aetna to research trials published by the National Library of Medicine
which is under DHS as is CMS. When speaking to Aetna customer
representatives I was told that they are not Medicare and that they
offer other benefits when attempting to explain that that they do not
have to cover what original Medicare covers. In order to be a
conforming Advantage Plan Aetna must cover procedures that Original
Medicare covers. That requirement is in Federal statutes and the
regulations (CFR). CMS has also so advised Medicare eligible
individuals that Advantage coverage must be the same for part A and
Part B in a publication available to the public. Advantage plans can
offer more not less coverage. Aetna is free to restrict coverage to
their private insured under their individual and employer group plans
but not in their Advantage plans. Nevertheless it relies on the same
company wide global policy statements to routinely deny coverage to
their Medicare Advantage insured for treatments that are covered by
Original Medicare.
As a retired State of NJ employee I had no choice other than to enroll
in a Medicare Advantage plan because the Christie administration
discontinued coverage for standard Original Medicare and State
secondary coverage where the State is self-insured utilizing a plan
administrator. No longer were retiring enrollees able to select
Original Medicare and opt to have secondary State Plan coverage that
had been offered to retirees throughout the entire course of my
employment. The retired coverage offered in the Advantage plan is
inferior to the comparable employed coverage I enjoyed due to Aetna's
exclusion of what the self-insured plan would have covered. I could
have chosen Original Medicare and opted for a private secondary co-
insurance plan but the State would no longer subsidize the plan
premiums under the terms of my retirement. I would also have to obtain
a part D plan because I would no longer be eligible for the state's
prescription plan. I and many of my retired co-workers friends never
would have chosen an Advantage plan. Many Medicare eligible retirees
are at the mercy of their employers who force them into Advantage
plans.
In my view, the continued move toward the privatization of Medicare is
harmful to patients. Non-conforming Advantage plans such as Aetna's
should have their ability to offer the plan to employers or the public
revoked. Treatment is delayed for months because Aetna's appeals are
multi-level and are routinely denied. To the extent that other
services/procedures are covered by some Advantage plans such as vision,
dental, prescriptions, prescription review, home health care visits and
healthy home visits my plan does not offer vision or dental
prescription I am covered by stand alone insurance for vision and
dental because the State Advantage plan does not offer vision or
dental. If I am not able to have Medicare required treatment covered by
Aetna under its Advantage plan there is no added ``advantage'' to me as
an insured because Aetna is not covering what Original Medicare
mandates be covered.
I consider the offered prescription reviews and healthy home visits to
be an intrusive waste of time. When I attempted to opt out of these
reviews I was advised that I would no longer be contacted but I still
receive endless calls and numerous mailings. These home services and
prescription reviews are all fulfilled by sub-contractors of Aetna. The
Advantage Plans are wasting money on their subcontracted ``services''
rather than covering medically necessary treatment. Although the State
offers different Advantage plans (less costly premiums higher co-pays)
because I reached 25 years service before a certain date the Advantage
plan that I am in is the closest to the employed Blue Cross Blue Shield
Direct 15 plan I had when I was employed. Any other retired Advantage
plan would require the payment of higher co-pays and co insurance for
doctor or hospital visits.
______
Statement Submitted by Sterling Sharp
Americas Giant insurance companies which have dominated our Health Care
for generations are not about to relinquish their Death Grip on our
Health Care.
These Medicare Advantage programs are nothing less than a corrupt
scheme to reinstate their Entrenched Private Tax on our entire health
care. Despite their claims of efficiency, expertise etc., they are only
a blatant and greedy middleman which cannot deliver on any of its
claims. Adding an unnecessary middleman cannot reduce costs; that is a
LIE.
Their management for profit at any cost only results in death panels
and poorer quality of medical care for all Americans. The whole program
is only a crutch to support Gigantic, Privileged Corporations with
nothing but endless, longstanding greed and corruption as their goal.
It is your duty to put an end to the entire program.
A much better course is to modernize and fund Medicare For All so that
we Americans can enjoy a modern, effective Health Care System such as
Europeans have enjoyed for many years. It is time to root out Corporate
Welfare starting with the most Notorious Offender; our bloated Gigantic
Insurance Combines.
They cannot and will not be reformed or brought under control.
______
Letter Submitted by Paul W. Sutton
October 18, 2023
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510
Dear Committee Members,
Advantage Plans do not advise or disclose to participants that
Advantage plans may refuse to cover certain Part A or Part B procedures
where CMS has not issued a coverage policy for the particular
procedure. Where CMS has not issued a written policy treatment for a
given procedure code that procedure is covered under Original Medicare.
Advantage plans, however, are allowed to develop their own polices and
deny treatment when CMS is silent as to coverage under Original
Medicare. Advantage plans advertise that they cover everything that
Original Medicare covers but fail to disclose that they are permitted
to deny coverage where CMS is silent as to its policy for coverage.
This results in Medicare Advantage participants being denied coverage
for many procedures that are covered under Original Medicare. No one
reads the plan book or website when signing up for a plan. The ability
to deny coverage should be prominently disclosed up front. It is not in
the best interests of a plan enrollee to forgo covered part A or B
coverage in exchange for healthy home visits or prescription review
that have been contracted out to third parties only to learn that a
treatment that is covered by Original Medicare may be denied by an
Advantage plan because it can set its own policies where CMS has been
silent. It should be noted that some Advantage enrollees had no choice
other than to accept the offered Advantage plan because their employer
discontinued coverage under traditional Medicare that in the past
covered co-insurance.
The best solution would be for CMS to require coverage by Advantage
plans for all procedures where CMS is silent as to policy. Both federal
statutes and regulations require that Advantage Plans cover everything
that Original Medicare covers. Because this requirement is mandated by
governing law, it seems that it is beyond CMS' scope of authority to
grant what is essentially the ability for a private plan to cut costs
and essentially create a system that permits different treatment of
enrollees based upon whether they have enrolled in a private plan or
the original government plan. Allowing private insurers to deny
coverage results in cost saving to the detriment of the enrollee.
______
Voices for Health and Healing
164 Honeybee Lane
Sequim, WA 98382
(360) 683-0735
Thank you, Senators, for this hearing on Medicare, a program second
only to Social Security in providing urgently needed benefits for 60
million senior citizens, in this case health care.
My organization, Voices for Health and Healing, is a local, grassroots
organization in Clallam County, Washington, that works to promote
health care as a basic human right. We are deeply concerned that
through aggressive marketing and deceptive practices, Medicare
Advantage providers have succeeded in luring more than half of
Medicare-eligible seniors into so-called ``Medicare Advantage'' plans.
They are not Medicare and are not advantageous. They are private
insurance plans, the corporate provider paid a ``capitation fee'' from
the Medicare Trust Fund for every person enrolled. In recent months,
The New York Times and other media have exposed Medicare Advantage
providers like Aetna, United Healthcare, Humana, and Kaiser Permanente
filing tens of billions of dollars in false claims, draining the
Medicare Trust Fund. These are tax revenues that all of us paid from
every paycheck we earned to keep Medicare solvent. They are stealing
our money. It is the sworn duty of every elected Federal official to
protect Medicare and Social Security.
We refer you to the October 8, 2022 New York Times, an article
headlined: `` `The Cash Monster Was Insatiable,' How Insurers Exploited
Medicare for Billions.'' This article is only the tip of the iceberg.
Medicare Advantage is a racket that has fattened the profits of private
insurance companies while denying care to millions of patients and
pushing the Medicare Trust Fund toward insolvency. Estimates of the
total cost of this corporate theft now total $140 billion.
We believe that health care is a human right. The cure and healing of
the sick and wounded should never be a source of corporate profits. The
insurance corporations use deceptive tricks like ``upcoding'' to a
patient's diagnosis to add additional charges to the bill submitted to
the Center for Medicare Services for conditions that have nothing to do
with the patient's health care needs. They refuse or deny coverage for
conditions even when medical doctors have certified the procedure or
treatment is needed. Sometimes it leads to the death or severe,
permanent, injury of the patient.
Documentation for these charges can be found in the records of the
Inspector General of the Center for Medicare and Medicaid Services and
other Federal oversight investigators. Organizations like Puget Sound
Advocates for Retirement Action (PSARA), Physicians for a National
Health Plan, and Social Security Works, have joined in defense of
traditional Medicare, to protect it from runaway corporate profit
greed. Lawmakers like our own Representative Pramila Jayapal and
Representative Adam Smith, both Washington State Democrats, have spoken
out against the drive to privatize Medicare, a program that we all paid
for and should serve our entire population.
We are convinced that the only way to prevent the full corporate
takeover of Medicare is to level the playing field so that the costs
and benefits of traditional Medicare are equal to those of Medicare
Advantage. It means reducing or terminating the monthly charge that
traditional Medicare recipients must pay for Medigap policies. It means
Medicare offering dental, vision, and hearing benefits. If the Federal
government truly ``cracks down'' on the private insurance profiteering,
it will bring in tens of billions of dollars that can be used to pay
for these benefits and also insure the continued solvency of the
Medicare Trust Fund.
We welcome this hearing. We urge you to continue this airing of views
on how to improve Medicare and sustain it, how to protect it from the
deceptive practices of Medicare Advantage providers. We urge you to
invite grassroots organizations that are working to strengthen, improve
and expand traditional Medicare.
Tim Wheeler
Acting Chair
[all]