The Justice Department accused three of the nation's largest health insurance companies of paying illegal kickbacks in hundreds of millions of dollars over several years to insurance brokers who led people to private Medicare plans.
Federal prosecutors also accused the two insurers of conspired with brokers to discriminate against people with disabilities by blocking enrollment in private Medicare plans because they believed the insurers would be more expensive.
Approximately 12% of Medicare beneficiaries are under the age of 65 and are disabled and are eligible for the federal insurance program. Given their complex health needs, their care can be expensive.
Etna, according to a complaint originally brought by whistleblowers and joined by the Department of Justice, three of the country's largest health insurance companies. Previously known as Anthem. And Humana – has been accused of paying kickbacks to three large brokers, Ehealth, GoHealth and SelectQuote, to increase enrollment in the Medicare Advantage plan. These brokerage companies are also responsible for fraud.
A complaint filed in federal court in Boston claimed that the kickback occurred at least between 2016 and 2021, accusing Aetna and Humana of discriminating against people with disabilities.
Aetna, Elevance, Gohealth and Humana denied the allegations, but others did not immediately respond to requests for comment.
The lawsuit is one of the first signs of the Trump administration, with some Medicare Advantage plans still being subject to federal scrutiny. Critics of these plans, including lawmakers in Congress, have used overly aggressive marketing tactics and denounced incredibly popular policies to overcharge the federal government. The Medicare Advantage Plan covers more than half of all individuals enrolled in the federal program.
During the Senate confirmation hearing now for Dr. Mehmet Oz, the Centers for Medicare and Medicaid Services, he responded to a senator who is concerned about the excess in a civil plan that there will be a “new sheriff” in town.
Brokers often play a pivotal role in helping older Medicare qualified Americans decide which private plan to choose. The complaints accused the broker of leading the individual to the plan that paid the person most, rather than the person's needs.
In recent years, small local brokerage companies have made way for large national organisations employing many agents and using call centres and websites, like the companies appointed in the lawsuit. They now tend to rely on computer programs to help brokers identify the best plan for each caller. This is a technology that makes steering the kinds described in the lawsuit easier.
Last year, the Biden administration completed regulations designed to allow insurers to pay patients to register after Congressional testimony and consumer complaints that insurers are awarding bonuses to register more people in a particular plan, regardless of individual needs. However, the lawsuit has pending rules.
Referring to cases involving people with disabilities, federal prosecutors are blunt: “The efforts to specifically drive away beneficiaries are even more ruthless, as their disability could make them less profitable for health insurance companies,” said lawyer Leah B. Foy. “The benefits and greed for beneficiaries are something we will continue to investigate and prosecute.”
