The Private Plan Pitch: Seniors’ Experiences with Medicare Marketing and Advertising

Introduction

During Medicare’s annual open enrollment period, marketing pitches from private plans are seemingly everywhere. They can be seen on TV and the web. They’re on highway billboards and in brochures in physician waiting rooms. And they’re targeted to beneficiaries through email and phone calls. All types of Medicare plans are advertised, from Medicare Advantage plans to Medigap supplemental and stand-alone drug plans.

The proliferation of this marketing has led to an increase in complaints in recent years, with beneficiaries and brokers reporting confusing and misleading sales tactics.¹ In response, the Biden administration has implemented several regulations in the past year to rein in Medicare plan marketing practices.

We asked people age 65 and older about their experiences with plan marketing and advertising efforts and how they may have informed their Medicare coverage decisions.² Between November 30 and December 8, 2022 — a period covering the latter part of the 2023 open enrollment period for coverage beginning January 1 — the Commonwealth Fund and SSRS partnered to survey a nationally representative sample of 2,001 U.S. adults age 65 and older.

Below we present statistically significant findings from our survey. To learn more about how the survey was conducted including the sampling method, see “How We Conducted This Survey.”

Survey Findings

Quantity of Marketing Information

Nearly all people age 65 and older reported receiving at least one phone call, mailing, or email per week (Exhibit 1). Two in five reported receiving at least seven marketing appeals weekly (data not shown).

Reports of Fraud and False Advertising

Certain marketing experiences reported in our survey would be considered fraud by federal authorities. No marketer, whether calling on behalf of a plan or a third party, is permitted to ask for — or needs to have — a beneficiary’s Medicare or Social Security number outside the formal plan enrollment process. In addition, time-limited, special discounts on Medicare plans do not exist and are not allowed by the Medicare program. And yet people age 65 and older reported that these activities indeed occurred (Exhibit 2).

Reports of requests for Medicare numbers and Social Security numbers were highest among low-income people age 65 and older, suggesting beneficiaries with low income are being targeted for this fraud.

False advertising or misleading information. In our survey of people age 65 and older, some reported that marketers were using misleading tactics and providing false information in their advertising.³

• Reports of seeing, reading, or receiving advertising information that was later found to be untrue were significantly more common among people with incomes of less than $25,000 than those with incomes above that level (Exhibit 3).
• About one in 10 said they had enrolled in a plan under the impression that their doctor was covered, only later to learn there were limitations on seeing that doctor or the doctor was not in the plan’s network.

Sources of Marketing Information

Providers of Medicare Advantage supplemental benefits. While Medicare Advantage plans, brokers, and agents are responsible for much of the marketing, it’s also generated by the companies that provide the additional benefits that these plans offer.

• About two-thirds of people age 65 and older reported seeing marketing materials from companies that provide Medicare Advantage benefits, like Silver Sneakers, which connects beneficiaries with gym memberships.
• Among people who reported seeing these ads, two in five (41%) said that marketing from these companies encouraged enrollment in a Medicare Advantage plan.

Physicians. Physicians and their offices were a source of marketing information for only a minority of adults age 65 and older. Four percent of adults age 65 and older reported that their doctor or doctor’s office suggested that they join a specific plan or insurance company. A relatively small share of adults 65 and older (less than 10%) indicated that the doctor or doctor’s office referred them to non-Medicare resources like insurance agents or provided a number to call for help with Medicare coverage that was not the official Medicare hotline.

Medigap and Part D plans. In addition to Medicare Advantage plans, some Medicare beneficiaries also receive marketing from their current Medigap supplemental plan or Part D prescription drug plan that encourages them to enroll in a Medicare Advantage plan instead of traditional Medicare.

Among people age 65 and older with traditional Medicare who are also enrolled in a Medigap plan or stand-alone Part D plan, about one in five (22%) reported receiving information from that plan about enrolling in a Medicare Advantage plan.

Reports of Violations of Marketing Rules

The Centers for Medicare and Medicaid Services (CMS) regulates Medicare marketing and prohibits certain activities.⁴ For example, marketers cannot call beneficiaries unless they agreed to be contacted or have requested the call, and brokers and agents cannot coerce or otherwise pressure beneficiaries into signing up for a plan. CMS also does not endorse or market specific plans. Such materials that seem to be from Medicare are likely to have been sent by a marketer that is inaccurately characterizing its relationship with CMS and the Medicare program.

Despite CMS rules, unsolicited calls and emails from plans or plan representatives were commonly reported in our survey (Exhibit 4). A larger share of Black adults than white adults reported unsolicited calls in the past 12 months (88% vs. 76%; data not shown).

Marketing’s Effects on Older Adults

Fraud and misleading marketing can confuse people and cause them to enroll in a plan that doesn’t meet their needs. These activities also can affect how people view the Medicare program and the insurers behind private plans.

Use of Medicare name. Most adults age 65 and older (70%) said that use of the Medicare name in marketing information does not affect their confidence in that information. Of the remainder who said the Medicare name does affect their confidence, a somewhat larger share said its mention made them less confident rather than more confident in the marketing information (19% vs. 11%, respectively).

Trust in private plans. Most adults age 65 and older (75%) said that they trust Medicare private plans; only a quarter said they did not trust them. For the most part, marketing efforts did not change the level of trust in these plans (78%).

Response to advertising. Some ads are likely intended simply to prompt people to call the marketer. Our survey found that only a small minority reported taking that step; of these individuals, even fewer end up enrolling in the plan advertised (Exhibit 5).

Response to unsolicited calls. Most people age 65 and older didn’t stay on the phone when they received an unsolicited marketing call. Of the 14 percent who said they remained on the line, those with household incomes less than $25,000 were more likely to do so than those with incomes of $50,000 or more (Exhibit 6).

Response to multiple coverage options. Medicare beneficiaries have many plan options. In 2022, the average beneficiary had more than 40 Medicare Advantage plans, another 60 Part D plans, and many Medigap plans from which to choose.⁵

• Nearly all adults age 65 and older said that when they feel like they have “too many” coverage options, they stick with their current plan rather than trying a new one (Exhibit 7). Some studies have shown that this “stickiness” can result in beneficiaries paying more out of pocket for health care costs than they would have paid if they had switched plans.⁶
• Nearly half of adults age 65 and older said that they turn to friends and family or to insurance agents and brokers for one-on-one help in choosing their coverage. Among the 9 percent of adults age 65 and older who reported other sources of plan information, these sources were commonly independent and internet research.

Information Gaps

More than one in three adults age 65 and older said that they would like more information about out-of-pocket costs and benefits, and one-quarter said that they would like more one-on-one help to make their coverage decision (Exhibit 8). One-third said they did not need more information.

Switching coverage. Switching from Medicare Advantage to traditional Medicare can be difficult. In most states, there are limited opportunities to purchase a Medigap policy without medical underwriting or denial of coverage. More than half of adults age 65 and older in our survey said they weren’t sure how easy or difficult it would be to switch (Exhibit 9). This suggests beneficiaries may choose their coverage without knowing they may not be able to change it easily if the plan they select doesn’t meet their needs.

Filing complaints. Despite a rising number of complaints about Medicare marketing, the vast majority of adults age 65 and older reported not knowing how to report their concerns.⁷ Many said they did not know how to file a complaint but thought they could easily figure it out; about one in five said they would not be able to figure it out all (Exhibit 10).

Discussion

While many Americans age 65 and older are experiencing a continuous barrage of marketing from Medicare private plans during the open enrollment period, it isn’t clear that this information is helping to inform beneficiaries about their coverage choices. While most Americans are accustomed to ubiquitous product advertising, misinformation about health care coverage, as reported in our survey, can have significant implications for Medicare beneficiaries with complex needs and limited resources.

Most adults age 65 and older said that when faced with too many coverage choices, their default is to stick with their current plan. As other research has shown, by not shopping for the most appropriate coverage each year, some beneficiaries pay higher out-of-pocket costs than they otherwise would. This also creates market inefficiencies, as insurers are not incentivized to compete for membership. Moreover, many people in our survey reported instances of fraudulent marketing, while others had experiences that led them to enroll in coverage different from the plan details presented to them.

Many adults age 65 and older said that they would like more help with making their coverage decisions and more education about the out-of-pocket costs and benefits of coverage options. One way to make these decisions easier is to standardize choices; another is to limit them, as has been done in the Affordable Care Act’s insurance marketplaces.⁸ Many beneficiaries also said they did not know how to file a complaint about marketing and advertising practices. Education and one-on-one, unbiased help from organizations such as the State Health Insurance Assistance Programs could help to protect beneficiaries from bad actors while also improving the efficiency and equity of the Medicare marketplace.

The Biden administration has taken steps to reduce future confusion: restricting use of the Medicare name, prohibiting ads that don’t mention a specific plan, and banning sales presentations immediately following educational events. Additional support for unbiased education and easier pathways to file complaints about fraudulent activities could enable more beneficiaries to share their concerns about Medicare plan marketing and improve regulation. 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 have negative experiences with marketers.