Dan Gorenstein: Fall is in full swing. You might hear those crisp leaves crunching, that Sunday afternoon football blaring, and if you’re one of the 65 million people on Medicare, a whole lot of this.

[Montage of Medicare ads]

DG: More than 150 companies and brokers hawking their Medicare wares, hustling through a narrow eight-week window to convince as many people as possible to switch insurance plans.  

Gretchen Jacobson: So the way for them to break through all those competitors and get people to choose their plan is advertising.

DG: Phones ringing off the hook, emails, text messages, more than 600,000 TV ads.

[Montage of Medicare ads]

DG: Today, how misleading marketing, too many choices and too little help combine to create a Medicare nightmare. From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

***

DG: Leslie Montgomery has had a really rough year.

Leslie Montgomery: In January, my hands started shaking really bad, and I became kind of dizzy, so I ended up calling 911. 

DG: Doctors eventually diagnosed the 75-year-old with Parkinson’s. She shuttled between the hospital and rehab. And in that time, her life fell apart.

LM: While I was in the hospital and the rehab in January, they evicted me from my house.

DG: The RV park for seniors banned Leslie from the property before she could rescue most of her stuff. 

LM: I arrived in this home with two pairs of sweatpants and a blouse and that was it.

DG: The senior care facility where Leslie now lives in Phoenix, Arizona is mostly paid for by the state. The rest comes out of her social security check. Once she pays her life insurance bill Leslie says she’s left with $50 a month.

LM: My clothes, my toothpaste, any personal items, I’m going to have to be able to buy out of that 50 dollars. 

DG: Open enrollment is an especially treacherous time of year for the 12 million people like Leslie — people with incomes so low they qualify for both Medicare and Medicaid. Nearly half live alone or in an institution. More than a third never finished high school.

New research shows people like Leslie are more likely to be victims of the most deceptive Medicare marketing practices.

LM: Don’t miss out on your $900 a month stipend from the government, you know, hit now if you haven’t done it.

DG: Leslie’s tapped the ‘now’ button. See, she’s an avid gamer…

LM: You’re a warlord.

[Computer game music]

DG: Loves to play Vikings: War of Clans on her phone.

LM: You have to do battles with other people and you’re battling other countries… 

DG: And within minutes of clicking on one of these ads Leslie says the insurance brokers start waging their own kind of battle.

[Phone ringing]

LM: They just say that you signed up to request quotes from us, and I tell them, “I didn’t sign up for quotes. I signed up to find out about the money,” and they says, “Well, you have to have the right insurance and the right policy to get it.”

DG: It’s a sleight of hand that pisses Leslie off.

LM: It’s extremely frustrating to figure that, you know, that somebody is there to help you and then you find out, no, they’re not there to help you. They’re basically there to shaft you.

DG: Leslie hangs up as soon as brokers start pitching other plans. She actually likes the coverage she has. She’s one of about 30 million people with Medicare Advantage, the version of Medicare run by private insurance companies. 

LM: UnitedHealthcare stood behind me every time I’ve gone into the hospital or rehab. They’ve been there for me.

DG: But research shows even people who like their coverage can often save money by shopping around — something only about a third of people with Medicare do each year. One big reason: Picking the right plan is really hard to do.

And that makes sense. The average person has more than 40 Medicare Advantage options, 20 prescription drug plans, 10 different kinds of supplemental coverage.

Lauren Lachs: How unfair that people are put in this position. I mean, on half of these calls I’m super confused and I have now gotten 50 hours of training. 

DG: Lauren Lachs is a volunteer with the helpline run by the Medicare Rights Center, a nonprofit patient advocacy organization. 

As you might guess, their calls spike this time of year. Lots come from low-income folks like Leslie, who reached out after she recently spied another potential deal.

LM: The postcard told me that I would get a hundred dollars a month to spend on over the counter items.

DG: Bandaids, ointments…

LM: Bed pads, aspirin, vitamins…

DG: Lauren says these sorts of perks that Medicare Advantage plans offer — debit cards, grocery money, what she calls “sweeteners” — reel in a lot of her callers.

Her job: Help people like Leslie see the fine print that’s not on the postcards. Are their doctors covered? Can they afford their drugs? Will their out of pocket costs explode? 

LL: And so I, on the phone with her, went to Medicare.gov, typed in the details of her current plan.

DG: Pulled it up side by side with the plan from the postcard.

LL: And it was pretty startling.

DG: The new plan would have put Leslie on the hook for more than $8,000 a year in out of pocket costs — three times more than the plan she has now. 

LL: Almost every piece of the plan when you looked at it side by side felt like her current plan was more robust.

DG: Even if Leslie had switched plans, her other insurance from Medicaid would have protected her from financial fallout. But Leslie knows a bad choice can stick a lot of people with unexpected bills [and] even harm their health.

LM: It’s like almost a bait and switch. I mean, I do my research on things. Somebody that doesn’t do that can really get themselves into a lot of bad trouble. 

DG: Lauren Lachs worries too. She knows she only hears from a sliver of the most proactive people out there — and even they are struggling. 

LL: Everyone calling is trying to make sense of the system, right? It’s amazing to see people just, like, take on this behemoth of a system and are persistent with it. And it’s still really hard. It’s just overwhelming.

DG: After the break, alarming new research on the dark underbelly of all this Medicare marketing.

MIDROLL

DG: Welcome back. Federal data show the number of complaints about misleading Medicare marketing more than doubled between 2020 and 2021.

Now, new research underscores just how widespread these struggles are and how misleading ads and a lack of unbiased help combine to make Medicare enrollment even tougher for consumers, especially those with low incomes.

I spoke with Gretchen Jacobson, the author of this new report and a vice president at the Commonwealth Fund, about their findings.

Alright, Gretchen, so I think we’re pretty clear by now in our story what the stakes of picking a Medicare plan are for seniors. So I want to start with what I’m guessing a lot of people are wondering.

Why are so many insurance companies and brokers trying so hard to reach the people picking these plans? Like, why spend all this money on marketing on a government insurance program? That’s sort of weird, right? 

Gretchen Jacobson: So there’s a few things going on here. First, there’s a lot of money at stake.

So Medicare Advantage plans will receive about $450 billion in 2023 from the federal government. 

DG: You said $400, sorry, $450 billion? 

GJ: Right, and then their margins are projected to be about 4.6%. So when you do the math, that’s about $21 billion in profit from a federal program. That’s a lot of money. 

GJ: And over 180 companies are offering Medicare Advantage plans now. So the way for them to break through all those competitors is advertising.

[Medicare ad montage] 

DG: So your team at the Commonwealth Fund, Gretchen, decided to take a closer look at the tactics these marketers use to reach folks. Tell us more about that.

GJ: So we did a survey among people ages 65 and older to find out what marketing they were receiving and how it was affecting their coverage decisions.

DG: And you surveyed, like, 2,000 people. 

GJ: Yes, that’s correct.

DG: So, what did you all find?

GJ: We found that people were getting a lot of advertising, which was not a big surprise. But the extent of advertising was a surprise. And what was really concerning was that people we surveyed said marketers were using misleading tactics and providing false information.

DG: And Gretchen, real quick, what do these sort of deceptive tactics look like?

GJ: So some said they saw advertisements that led them to believe something about a plan that they later found out was not true. About half of people said that they received a call or email from Medicare promoting specific insurance plans, and this couldn’t have been from Medicare because that’s not something that the Medicare program does. And then three quarters of people said that they received an unsolicited call from a plan or plan representative. So these are activities that people are saying that are occurring that are absolutely not allowed under current law.

DG: And, like, when you and your team tabulated the results from the survey, what was your reaction to all this deception, Gretchen? 

GJ: We were very surprised. 

We actually expected the rates to be much lower and then had planned to follow up with a few people who had experienced these things. But instead, we saw relatively high numbers of people reporting these [things] that should never occur. What was really concerning and alarming was that low-income people consistently reported these activities more frequently than higher income people across almost every measure that we asked about.

DG: One potential reason for that disturbing finding, said Gretchen: Low-income people are eligible for special kinds of Medicare Advantage plans that can be far more lucrative than the typical coverage that companies sell. 

GJ: Meaning that there’s even more potential profit to be made from these plans for people with low incomes so it makes sense that even more plans would be trying to reach them.

DG: And so this all sounds kind of sleazy, right? But these deceptive practices also sound like the kind of things we all get hit with in our inboxes and on our cell phones. How much harm, Gretchen, do you think is being done here?

GJ: Well, it’s a bit different than a different consumer product you might purchase because this is your health insurance coverage. This is something that is much higher stakes than, say, buying a new phone. [So] there’s a lot at stake for people with low incomes. They don’t have the savings and financial cushion, which means if their choice doesn’t work out for them, it’s a big problem. 

About one-third of seniors with low income said that when they receive a marketing call, they are likely to stay on the line because they want more information about their coverage choices. They’re clearly getting a lot of information, but it’s not the information that they need or want.

DG: And let’s get into this point, Gretchen, about the help that people with Medicare — especially those with low incomes — want, because that’s what Leslie Montgomery from the top of our show wanted too. And she ended up calling the Medicare Rights Center, but the data show that’s pretty rare. People are much more likely to turn to insurance agents and brokers.

What do we know, Gretchen, about both the good and the bad of so many people relying on brokers?

GJ: Well, they are widely used and they’re very much part of many people’s coverage choices. The issue is that their compensation is not always equal across all the coverage options. So most brokers, when we did focus groups with them, said that they get paid more to enroll people in Medicare Advantage plans than Medigap plans with traditional Medicare.

DG: And just real quick here, Gretchen: A Medigap plan is basically extra coverage you can buy on top of traditional Medicare to lower your costs, protect you against really big bills.  

JG: Yes, that’s correct.

D: But we also know a lot of low-income folks can’t afford to buy extra Medigap coverage. So that puts these brokers, who make a living off the sales commissions that insurance companies pay them, in even more of a bind. Is that right?

JG: That’s right. So when a low-income person talks with a broker, for the most part, the only avenue for that broker to make money is to enroll the person in a Medicare Advantage plan. 

DG: Whether that plan is good for them or not.

JG: Yes. There’s really no compensation for talking with the person about the tradeoffs of remaining in traditional Medicare versus going into a Medicare Advantage plan. 

DG: Gretchen added that not even the federal government knows how much brokers make.

Their commissions, which can run up to 700 bucks per new Medicare Advantage member, can also be topped off with bonuses and other payments that aren’t reported or regulated. Brokers are also not legally required to offer people all of the available plans in their area.

DG: So Gretchen, we know the feds are aware of these issues not just with brokers but also some of the unsavory marketing practices you’ve mentioned. Senate Democrats also put out a big report on these issues late last year. What’s Washington done since then?

GJ: So the Biden administration earlier this year strengthened several rules such as how the Medicare name can be used and the conditions under which people can be called or not called and restrictions on advertising plans in areas where the plan’s not available. These are all great things that should really help people. However, people in our survey also said that they didn’t know how to file a report to CMS about their concerns with misleading information.

DG: Right, not only is it hard to figure out how to report fraudulent activity, people might not even know fraudulent activity is occurring. 

GJ: That’s right.

DG: Gretchen also added there’s a lot more that Congress and the administration could do here. At the top of her list: Send more federal funds to the state programs that give people free, unbiased one on one insurance counseling. Item 1b: Change how brokers get paid so they are rewarded the same amount no matter which type of plan they recommend — or at least make their current incentives a lot more transparent.

I guess the idea that I have heard from you several times now is people want help. People need help. And there are not that many resources. And so that’s part of why brokers are so popular. So the policy challenge moving forward is how do you rectify that. Is that right? 

GJ: Yes. People have said in our surveys that they’re not getting the help that they need and they’re not getting the information that they need. 

DG: And I gotta think, Gretchen, those aren’t just abstract findings that you see in your research. When open enrollment starts this time each year, do people just like start coming out of the woodwork asking you for advice?

GJ: Oh yes. I think that happens to everyone who knows about Medicare.

DG: Who’s coming? Like, is it your aunt? Is it the neighbor down the street? Like, who’s coming at you? 

GJ: Oh, it’s typically relatives. It’s about six people every year that I help with their coverage choices.

DG: And I’m guessing you help them because you know better than anyone how scary this marketplace can be without someone like you around. Is that why you do this in the little free time that you have?

GJ: I care about these people and I want to make sure that whatever coverage they have is going to work for them and that they have someone who can really help them to sort through their options. I mean, the people are really important to me and so it’s really important to me make sure they can get the health care they really need and afford.

DG: Gretchen, thanks so much for taking the time to talk to us on Tradeoffs.

GJ: It’s been a real pleasure, Dan. Thank you for having me.

DG: Open enrollment begins October 15 and ends December 7. If you or a loved one need help reviewing your Medicare options, visit medicare.gov or go to shiphelp.org. That’s s-h-i-p help dot org.

I’m Dan Gorenstein. This is Tradeoffs.