Advertising by Insurers Favors Medicare Advantage
Over Stand-Alone Drug Plans
Kaiser analysis finds insurers spent more than twice
as much for Medicare Advantage than for stand-alone drug plan ads
Sept.
16, 2008 – As the marketing period for 2009 Medicare plans nears, a new
Kaiser Family Foundation study finds that insurers last year placed
three times more advertisements to promote Medicare Advantage plans than
they did to promote stand-alone Medicare drug plans. The Centers for
Medicare & Medicaid Services also issued new regulations today the add
new restrictions to insurance company marketing of Medicare Advantage
and drug plans. (See sidebar)
The new analysis of advertising by private plans
during the enrollment period leading up to 2008 comes amid heightened
Congressional attention to Medicare plan marketing practices. Insurers
are permitted to advertise their 2009 plan options beginning Oct. 1.
News rules aimed at protecting seniors from
‘deceptive or high-pressure marketing tactics’
Sept.
16, 2008 – There should be a lot more meat and a lot less sizzle in the
pitches tossed at senior citizens this year by insurance companies
selling Medicare prescription drug or Medicare Advantage plans. The
Centers for Medicare & Medicaid Services yesterday released final
regulations – some mandated by Congress – aimed at protecting seniors
from “deceptive or high-pressure marketing tactics.”
Read more...
The content and frequency of television, print and
radio advertisement for Medicare plans was analyzed from Oct. 1 through
Dec. 31, 2007, the period when insurers were permitted to market their
2008 plan offerings and when beneficiaries were expected to revisit
their Medicare drug plan and Medicare Advantage plan choices for the
coming year.
The study looked at ads placed nationally or in one
of three local media markets (Miami/Fort Lauderdale, Fla.; Phoenix,
Ariz.; and Greensboro, N.C). All ads were identified by VMS, a media
monitoring service.
Insurers spent more than twice as much for Medicare
Advantage (which provide all Medicare benefits and often additional
benefits) than for stand-alone drug plan ads (an estimated $30.1 million
and $13.7 million, respectively) placed nationally and in the three
markets. Estimated expenditures are based on the standard cost of ads
and do not include other marketing and promotional expenses, such as
direct mail and broker fees.
“Since ads for Medicare plans tend to be skimpy on
basic, descriptive information, beneficiaries and their families really
need to do their homework before they choose a plan or decide whether to
switch plans during open enrollment,” Kaiser CEO and President Drew
Altman said. The 2009 enrollment season runs from Nov. 15 though Dec.
31, 2008 for Medicare drug plans, and through March for Medicare
Advantage plans.
Extra benefits were the dominant message in ads for
Medicare Advantage plans, reflected in 71 percent of all occurrences,
and most frequently emphasizing vision, preventive care and hearing
benefits. Most Medicare Advantage ads (56 percent) also emphasized
either no or low premiums for their plan.
The majority of Medicare Advantage ad occurrences
(79 percent) explicitly identified whether they were promoting a
Medicare HMO, PPO, private fee-for-service or other specific type of
plan. The one in five that did not specify a type of Medicare Advantage
plan could leave people on Medicare and their families unaware of the
plan’s potential restrictions on choice of physicians and other
providers. The Medicare Improvements for Patients and Providers Act of
2008 includes a provision to address this concern, requiring insurers to
include the type of plan by Jan. 1, 2010.
In Medicare Advantage print ads, two thirds (67%)
of all occurrences included a general statement indicating restrictions
and limitations may apply – but always in the fine print. None of the
HMO print ads included language describing provider network
restrictions, as suggested in the Centers for Medicare & Medicaid
Services’ marketing guidelines.
Other key findings from the study include:
● Only 3 percent of ad occurrences included
images of younger people with disabilities – despite the fact that 16
percent of all Medicare beneficiaries are under age 65 living with
permanent disabilities. Less than 1 percent of all ad occurrences
mentioned the disabled population on Medicare explicitly.
● Images of seniors with apparent medical needs
or frailties were not commonly featured in ads, despite the fact that 38
percent of Medicare beneficiaries have three or more chronic conditions.
Even with the relatively new Medicare drug benefit, only 14 percent of
all ad occurrences (and just 22 percent of stand-alone drug plan ad
occurrences) portrayed an individual taking medications or an image of
medications.
● Nearly 10 percent of all ad occurrences
featured people engaged in physically demanding activities, such as
dancing, running, playing baseball and swimming. The choice of images
may appeal to beneficiaries’ aspirations for a healthy, active
lifestyle, but could deter those with more serious health conditions
from enrolling.
The report, Pitching Private Medicare Plans: An
Analysis of Medicare Advantage and Prescription Drug Plan Advertising,
is available
online. Its authors are Xiaomei Cai, Gary Kreps, Jim McAuley, and
Xiaoquan Zhao, of George Mason University, and Michelle Kitchman Strollo,
Tricia Neuman, and Kim Boortz, of the Kaiser Family Foundation.
In addition, the Foundation released a new policy
brief that explains the legal authority of the Centers for Medicare &
Medicaid Services to regulate advertising and other information issued
by the private companies that contract with the government to provide
Medicare benefits, including an analysis of relevant statutory,
regulatory and case law.
The brief also suggests additional steps the agency
could take to enhance consumer protections with respect to advertising
and marketing practices under its current authority. Policy Brief on the
Federal Government's Authority to Regulate Advertising in Medicare was
prepared by Vicki Gottlich at the Center for Medicare Advocacy and is
available
online.
Information provided by source:
The Kaiser Family Foundation is a non-profit
private operating foundation, based in Menlo Park, California, dedicated
to producing and communicating the best possible information, research
and analysis on health issues.
Sept.
16, 2008 – As the marketing period for 2009 Medicare plans nears, a new
Kaiser Family Foundation study finds that insurers last year placed
three times more advertisements to promote Medicare Advantage plans than
they did to promote stand-alone Medicare drug plans. The Centers for
Medicare & Medicaid Services also issued new regulations today the add
new restrictions to insurance company marketing of Medicare Advantage
and drug plans. (See sidebar)