News Summary

The U.S. Department of Justice has filed a legal complaint against major health insurers, including Aetna and Humana, for allegedly paying kickbacks to brokers to increase Medicare Advantage plan enrollments. The complaint claims that brokers prioritized kickback amounts over the welfare of Medicare beneficiaries, potentially leading to discriminatory practices against those with disabilities. The case raises ethical concerns about the conduct of these companies in the Medicare market. The defendants have varied responses, and the situation underscores the need for accountability in health insurance practices.

Boston, MA — The U.S. Department of Justice (DOJ) has filed a significant legal complaint against several major health insurers and brokers including Aetna, Elevance Health, Humana, eHealth, GoHealth, and SelectQuote. The complaint, lodged in the U.S. District Court for the District of Massachusetts, alleges that these companies engaged in illegal activities by paying kickbacks to brokers to increase enrollment in Medicare Advantage plans.

The DOJ claims that these illegal kickbacks, which reportedly totaled hundreds of millions of dollars, took place between 2016 and at least 2021. This practice raises significant ethical concerns as the brokers involved were allegedly incentivized based on the size of the kickbacks rather than focusing on the actual needs of Medicare beneficiaries.

Furthermore, the complaint details that some brokers opted not to sell Medicare Advantage plans from insurers who did not offer adequate kickbacks, ultimately affecting choices available to beneficiaries. Notably, the DOJ’s claims include allegations that Aetna and Humana collaborated with brokers to discriminate against Medicare recipients with disabilities, considering them less profitable. The complaint states that brokers had been pressured with threats of withheld kickbacks to encourage them to enroll fewer beneficiaries with disabilities.

U.S. Attorney Leah B. Foley has highlighted the concerns surrounding this issue, indicating that Medicare beneficiaries were being directed to options that did not necessarily serve their best interests, but rather, benefited the insurance companies involved. According to Deputy Assistant Attorney General Michael Granston, health care companies profiting from such illegal kickbacks will face accountability.

The defendants in the case have responded to the allegations with varying statements. Elevance Health has indicated its compliance with regulations and plans to contest the allegations vigorously. Similarly, Aetna has pledged to defend its commitment to quality insurance against these claims. Humana has expressed disagreement with the allegations and intends to fight back in court. SelectQuote described the claims as without merit and stressed its integrity in operations. eHealth has cooperated with the DOJ, asserting that the allegations are baseless, while GoHealth has not provided any comments regarding the situation.

This legal action follows an original lawsuit brought to light by a private individual under the whistleblower provisions of the False Claims Act, suggesting that improper conduct had been occurring within these companies. The DOJ is pursuing a jury trial in this case, and if the defendants are found liable, they could face penalties amounting to three times the losses incurred, along with additional fines.

This ongoing situation underscores substantial concerns regarding the ethical conduct of major insurers and their relationships with brokers in the Medicare Advantage market. As the case progresses, it will likely bring increased scrutiny on the practices of these companies and their adherence to regulations designed to protect Medicare beneficiaries.