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In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo)


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WASHINGTON DC – United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Finance Committee, released a new 17-page investigative report: Sales Before Seniors: How Medigap Insurers’ Sales Rewards Hurt Seniors on Medicare. 

The report uncovered the pervasive, secret rewards of lavish vacations, cash bonuses, and other incentives that giant insurance companies participating in the Medicare Supplement Insurance (Medigap) market offer health insurance agents and brokers – creating perverse incentives to steer unsuspecting seniors into products that could cost them hundreds or thousands of dollars more each year.

The report found that in 2021, over 6 million seniors purchased Medigap plans from companies that offered agents special, secretive rewards for enrolling seniors into targeted plans.

These companies are offering agents “a Sunny San Diego trip,” “the sales reward trip of a lifetime” to St. Thomas, and trips to the Bahamas, Maui, Los Cabos, Aruba, and more

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Senator Warren sent her report and a letter to the Centers for Medicare and Medicaid Services (CMS) and the National Association of Insurance Commissioners (NAIC), highlighting key findings of the report and calling on the organizations to take immediate action to end these secretive perks and stop these perverse incentives in the Medigap market. 

“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 Senator Warren. “Regulators must act to make sure seniors aren’t getting fleeced.”

The investigation revealed that: 

  • Secret offers of luxury vacations and other perks to agents are pervasive in the Medigap market: As of the 2022 Medicare open enrollment period, there are at least 32 companies providing, directly or through third parties, vacations and cash bonuses as incentives for selling certain Medigap products. These companies collectively signed up over six million seniors for Medigap insurance and collected more than $16 billion in premiums from beneficiaries in 2021.  Insurers – in exchange for steering business to their preferred plans – are offering agents “a Sunny San Diego trip,” “the sales reward trip of a lifetime” to St. Thomas, and trips to the Bahamas, Maui, Los Cabos, Aruba, and more.
  • Bonuses and perks can create incentives for agents and brokers to enroll seniors in the wrong products: Prices in Medigap plans vary widely across insurers. The widespread use of secret perks raise questions about whether agents and brokers are recommending certain Medigap policies because they are the right fit for seniors, or because they yield credit toward the fanciest vacations or most generous bonuses.
  • Bonus perks for agents and brokers are legal and minimally regulated: Federal and state regulation of Medigap sales has significant gaps, making it legal for health insurers to hand out perks to agents and brokers who sell seniors favored Medigap products—even if those insurance products do not meet the enrollees’ needs. Medigap plans are not subject to the same regulations that govern Medicare Advantage plans, and few states have adequate consumer protections in place. 

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By editor

Susan Petroni is the former editor for SOURCE. She is the founder of the former news site, which as of May 1, 2023, is now a self-publishing community bulletin board. The website no longer has a journalist but a webmaster.