DOJ Sues Medicare Advantage Insurers for Kickback and Discriminatory Practices
The U.S. Department of Justice has filed a federal lawsuit against three major health insurance companies—Aetna, Humana, and Elevance (formerly Anthem)—alleging an illegal kickback scheme involving Medicare Advantage insurance brokers eHealth, GoHealth, and SelectQuote. The suit claims that from 2016 to at least 2021, these insurers paid brokers hundreds of millions of dollars in exchange for enrolling beneficiaries into their Medicare Advantage plans. Additionally, the lawsuit alleges discriminatory practices where Aetna and Humana pressured brokers to enroll fewer Medicare beneficiaries with disabilities, considering them more costly to insure.
Medicare Advantage, or Medicare Part C, is a private alternative to traditional Medicare that bundles inpatient and outpatient care through private insurers. Approximately half of Medicare enrollees choose Medicare Advantage, leading to about $462 billion paid to these insurers in 2024, representing over half of Medicare's total spending. The lawsuit highlights the significant influence that insurance brokers hold over beneficiaries' plan selections, emphasizing the importance of impartiality given the potential health and financial outcomes of these decisions.
This case underscores ongoing concerns about the intersection of profit motives and beneficiary interests within Medicare Advantage. It raises important regulatory and compliance issues around insurer-broker relationships, potential kickbacks, and discriminatory enrollment practices that may affect vulnerable populations. The allegations put a spotlight on the need for robust oversight mechanisms to ensure ethical conduct in Medicare Advantage marketing and enrollment processes.
The lawsuit serves as a critical reminder of the complexities and challenges faced in balancing public program goals with private market participation. It signals potential ramifications for insurers and brokers operating in this sector as regulators intensify scrutiny. The case may influence future policy discussions on Medicare Advantage's role, market conduct standards, and the protection of beneficiaries, particularly those with disabilities, from exclusionary practices.