Medicare "Marketing Misrepresentation": Another Scam Targeting Seniors

Here's what happened to an 88-year-old relative a few weeks ago. She answered her phone, even though she didn't recognize the number. (Mistake #1.) The caller said he worked with Medicare and had been reviewing her account. He had good news! He said she could get expanded benefits by answering a few questions and giving her consent. She did just that. (Mistake #2.)

As it turned out, the caller was not a Medicare employee — as my relative had assumed — but an unscrupulous insurance agent selling Medicare-related policies. The line about "improving her benefits" wasn't false, per se, but the information was selectively presented. My relative never realized she was consenting to significant changes in her coverage.

Here's what happened. The agent moved her out of traditional Medicare (which she'd had for 23 years) and into Medicare Advantage, effectively terminating her full-featured "Medigap F" plan and her stand-alone Part D prescription coverage.

As SMI noted in a recent article, Medicare Advantage is a good choice for many seniors. Such plans typically offer broader benefits than traditional Medicare with Medigap. However, an Advantage plan — particularly an HMO plan, which the agent enrolled her in — is wholly inappropriate for an 88-year-old with existing health conditions. (HMO plans often require referrals to specialists, including the type of specialists my relative has been seeing for years.)

"Marketing misrepresentation"

What happened to my relative has a name: "marketing misrepresentation." The practice violates Medicare's rules, yet marketing violations occur with some frequency, according to a 2022 report (PDF) issued by the Senate Finance Committee. (The Finance Committee has jurisdiction over "health programs financed by a specific tax," which Medicare is.)

"Of particular concern to the Committee were reports...of agents changing vulnerable seniors'...health plans without their [genuine informed] consent," the report stated.

Although Medicare is a federal program, private brokers and agents are empowered to help seniors navigate the complex and confusing Medicare landscape and assist with enrollment. Such brokers and agents earn money from Medicare for each person enrolled.

Because that creates a financial incentive that could work against a senior's best interest, brokers and agents "are subject to rigorous oversight by their contracted health or drug plans," according to the federal Centers for Medicare and Medicare Services. Those who don't comply with the marketing and enrollment guidelines face "termination with their contracted health or drug plans."

Even so, some brokers and agents skirt the rules, and it may be weeks before a senior realizes what has happened. By then, previous coverage has been terminated and replaced with a plan that may have more out-of-pocket costs and not cover the same doctors or facilities.

Undoing the damage

Unwinding changes resulting from marketing misrepresentation can require hours on the phone, trying to disenroll from a new plan and re-establish previous coverage. (In some cases, reversing the changes may not be possible.)

Fortunately for my relative, the unwanted changeover was discovered quickly, and thanks to the helpful efforts of one of the insurance companies involved, her previous Medicare arrangement is back in place now.

However, she had to postpone at least one medical appointment because of uncertain coverage, and she may be required to pay out of pocket for two early June physical therapy visits that normally would have been covered. That's bothersome, but the financial damage and inconvenience could have been much worse.

Protect yourself and learn more

The Centers for Medicare and Medicaid Services stresses that Medicare employees do not make unsolicited calls to seniors about their benefits.

Brokers and agents are not supposed to make unsolicited calls, either. They're also prohibited from leaving leaflets or flyers at a residence unless the senior has set up an appointment.

The Senior Medicare Patrol National Resource Center (funded by U.S. taxpayers) has more information about common Medicare Marketing Violations and Misleading Marketing.

If you think you've been a victim of misrepresentation and other Medicare-related fraud, report it to the Senior Medicare Patrol in your state.

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