The first of May was no party for Elevance, CVS/Aetna, and Humana. The United States Department of Justice (DOJ) filed a complaint against, Elevance Health, CVS/Aetna, and Humana regarding their Medicare Advantage (MA) plans. In a press release, the DOJ said:

“The United States alleges that from 2016 through at least 2021, the defendant insurers paid hundreds of millions of dollars in illegal kickbacks to the defendant brokers in exchange for enrollments into the insurers’ Medicare Advantage plans.”

Three large insurance brokers, eHealth, Inc. and an affiliate, GoHealth, Inc., and SelectQuote Inc. are charged with:

• Actively steering one type of beneficiary to plans paying kickbacks
• Actively pushing undesirable beneficiaries to other MA plans

The DOJ also alleges the brokers refused to sell MA plans offered by insurers who didn’t pay to play.

Medicare open enrollment is a disaster for beneficiaries

Attracting new enrollees during open enrollment (OE) is a high priority for insurers. Seniors are bombarded with information and offers:

• 30% of seniors receive 7 or more marketing calls per week
• 9,500 daily ads ran on television during open enrollment in 2022

In What to Expect in 2025, we reported about one broker who blasted a database of 7 million seniors with 17 million phone calls. Hyper-aggressive marketing tactics like that prompted CMS to amend advertising regulations, but there’s a lot of gray area in which bad actors can still operate.

Many seniors struggle to understand the difference between MA plans and traditional Medicare. The American Prospect and HEALTH CARE un-covered highlighted one beneficiary’s frustration with OE advertising:

“They neglect to say that the amount of coverage you get is limited. They don’t talk about what you are losing by leaving traditional Medicare. It feels like insurance companies are manipulating us to get Medicare Advantage plans sold so that they can control the system, as opposed to treating us like human beings.”

MA plans and brokers profit while beneficiaries suffer

According to CMS, between January and June 2024, “CMS received 73,884 complaints of situations in which a consumer alleges that their plan was changed without their consent.”

As a result, by July 2024, CMS had suspended 200 brokers or broker Marketplace agreements for “reasonable suspicion of fraud or abusive conduct related to unauthorized enrollments or unauthorized plan switching.”

This kind of activity is unacceptable because the impact on consumers is real. Beneficiaries whose plan changes without their consent or who don’t understand what they’re signing up for may end up not being able to pay for their medications or having to travel long distances for care.

We’ve written extensively about MA as a failed experiment. It’s not saving taxpayers money — in 2024 alone MA costs were $84 billion more than they would have been under traditional Medicare. It’s not delivering better care to beneficiaries. Though it does show improvements promoting preventive care and preventing avoidable hospital readmissions, it falls down when it’s needed most.

A report from the Center for Medicare Advocacy said:

“A JAMA Viewpoint article (June 2024), citing a study in the Journal of Clinical Oncology (2023), states that ‘MA enrollees requiring complex cancer surgeries are less likely to be treated at specialized centers, experience longer delays and higher mortality than beneficiaries in [traditional] Medicare;’ a study in JAMA Health Forum (March 2024) found that not only do MA plans provide less home health services than traditional Medicare, but also that MA enrollees have worse functional outcomes; and a Government Accountability Office (GAO) study (2021) found that ‘Medicare Advantage beneficiaries in the last year of life disproportionately disenrolled to enroll in fee-for-service, indicating possible issues with their care.’”

Unfortunately, we’ve extensively tracked the administrative burden placed on providers leading many to terminate their participation in MA networks. Between 2023 and 2025, 67 hospitals and health systems have left some or all MA health plans due to these administrative burdens.

Bad for beneficiaries, bad for taxpayers, bad for providers. Yet MA plans remain very lucrative for MA plans and brokers. Until the 2025 rule, CMS capped the commission level for new enrollments and renewals, but allowed payors to pay administrative fees that cover an array of services — presumably this is how the alleged kickbacks were paid.

Possible penalties

The complaint against Aetna, Elevance, and Humana was filed under the False Claims Act, a statute that was enacted in 1863 in response to defense contractor fraud during the Civil War. Penalties incurred under the False Claims Act can be substantial. “The FCA provides that any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government’s damages plus a penalty that is linked to inflation.”  

In an incredibly detailed filing over 200 pages in length, the DOJ methodically paints a picture of three insurers negotiating with the named brokers to deliver specific numbers of desirable new enrollees for additional administrative fees rather than reporting them to CMS for soliciting kickbacks.

The exact amount of money at risk will be determined at trial, but in 2024 the DOJ won more than $2.9 billion in settlements and judgments for violations of the False Claims Act. The amount of reputational damage to parties named in the complaint will be incalculable.