A recent report examined Medicare Supplement Insurance (Medigap) marketing practices and how some of the approaches are harmful to seniors.
U.S. Sen. Elizabeth Warren (D-MA) released Sales Before Seniors: How Medigap Insurers’ Sales Rewards Hurt Seniors on Medicare, which revealed incentives steering unsuspecting seniors into products potentially costing them hundreds or thousands of dollars more annually.
“Giant insurance companies have free rein to scam millions of seniors in Medigap, offering agents lavish vacations to steer unknowing beneficiaries into more expensive plans,” said Warren, a member of the Senate Finance Committee. “Regulators must act to make sure seniors aren’t getting fleeced.”
The report determined in 2021, more than six million seniors purchased Medigap plans from companies offering agents special rewards for enrolling seniors into targeted plans that included sales reward trips to the Bahamas, Maui, Los Cabos, and Aruba.
Warren sent the report and correspondence to the Centers for Medicare and Medicaid Services (CMS) and the National Association of Insurance Commissioners (NAIC), requesting the organizations to take immediate action to end the secretive perks and Medigap market incentives.
“When it comes to Medigap, seniors remain vulnerable to agents who may care more about earning points for their next vacation than about helping a senior find the best policy,” Warren said. “This practice represents an abuse of the trust that seniors place in Medicare. Medigap insurance is not federally subsidized, but the terms and conditions under which Medigap plans are offered are regulated by CMS and state insurance regulators. Nowhere does CMS indicate that agents who sell these products may receive lavish vacations and other valuable perks in exchange for these sales. Regulators must act to close these loopholes.”