IMPACT: After HEALTH CARE un-covered’s Reporting, Medicare Profiteer Shuts Down
Joe Namath is out of a job and Medicare gains a lifeline.
In February, HEALTH CARE un-covered published a deep dive into Blue Lantern Health, which before that was Benefytt, and before that Health Insurance Innovations. The firm, owned by Madison Dearborn Partners, a Chicago-based private equity firm with close ties to former White House chief of staff and current ambassador to Japan Rahm Emanuel, exited bankruptcy in September to then run thousands of misleading ads.
The ads during Medicare Advantage open enrollment featured football Hall of Famer Joe Namath — and, unsurprisingly, none of them disclosed the prosecution of the company and its former executives by the Federal Trade Commission and the Securities and Exchange Commission.
Our reporting questioned why the Centers for Medicare and Medicaid Services did not bar the firm from acting as a major generator for unscrupulous Medicare Advantage brokers and their insurance company clients.
The firm’s advertising was so ubiquitous that it was noted by former President Donald Trump’s Secretary of Health and Human Services, Alex Azar, who said in 2019 that the Namath ads may not “look or sound like the future of health care,” but that they were indicative of the “real savings, real options” in Medicare Advantage, whicht costs taxpayers as much as $140 billion in excessive payments annually.
In April, the firm filed for a state-level bankruptcy equivalent in Delaware, called “assignment for the benefit of creditors.” Blue Lantern’s website is down, as is MedicareCoverageHelpline.com, and HealthInsurance.com, their signature assets. Nobody answers the 800 number Namath hocked for years.
Litigation during the bankruptcy indicated that 7 million people were in Blue Lantern’s database and that they had been dialed at least 17 million times. While it is impossible to ascertain how many seniors were lured into Medicare Advantage by Blue Lantern, its predecessor firms and Namath, it’s unlikely any firm was more aggressive at expanding the Medicare Advantage market.
HEALTH CARE un-covered was the only national media outlet that investigated Blue Lantern as its legal problems cascaded — and the first to investigate the company since 2021. A company insider reached out to this reporter and said that the company began winding down operations in February, immediately after HEALTH CARE un-covered contacted them and Madison Dearborn Partners for comment.
The Federal Trade Commission, under Lina Khan’s progressive leadership, forced Benefytt to pay $100 million to the people it had scammed by selling sham Obamacare plans, with checks distributed to victims in March. The Securities and Exchange Commission forced Health Insurance Innovations and the company’s co-founder Gavin Southwell to pay a $12 million settlement. Another close associate of the company, Steven Dorfman, was convicted of wire fraud in February.
In the Delaware court filing, Blue Lantern states that reforms to Medicare Advantage made by the Biden administration on April 5, 2023, in the 2024 Medicare rule — after relentless pressure by advocates including Be A Hero, Social Security Works, People’s Action, the Center for Medicare Advocacy and Physicians for a National Healthcare Program — were critical to the company’s downfall.
The new rules include a 48-hour “cooling-off period” between an appointment request with a broker and the actual meeting. “As a result of this cooling-off period, many of [Blue Lantern’s] potential customers were lured away by competitors or otherwise decided not to purchase insurance through [Blue Lantern],” the filing stated. Additionally, restrictions on marketing regional plans nationally in the April 5 rule “effectively prohibited nationwide advertising campaigns by insurance brokers unless the broker offered the products advertised in every market within the United States.”
Further rules imposed since then by the Biden administration are putting even more pressure on Medicare Advantage lead generators, also called “third-party marketing organizations,” or TPMOs. CMS will now require, on Oct. 1, 2024, that TPMOs get express consent from individuals before selling contact information to other marketers and brokers — a key loophole that enabled the growth of Blue Lantern and its predecessors.
But critically, one problem remains that provides enormous benefits to the Medicare Advantage industry: The Biden administration refused to act on advocates’ demands that CMS equalize commissions between Medicare Advantage and stand-alone Part D or Medigap plans. With this fee structure in place, brokers will still be strongly incentivized to direct seniors into Medicare Advantage plans where, in 46 states, they could be trapped for life.
EDITOR’S NOTE: But listen to this! Joe Namath is still on the small screen — but instead of pitching Medicare Advantage plans, he’s hawking hearing aids.
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History shows that the Biggest Health Care insurance companies have a track record of criminal activity ripping off policy holders and the American Taxpayers' in general. Why do we continue to do business with these corrupt and greedy corporations. Why is there little effort on the part of our duly elected politicians in both parties to make examples by shutting these providers down and stripping the executives of their illegal profiteering? Too big to fail. What a load of malarkey. Bring Medicare Advantage back into Traditional Medicare since these greedy businesses have NOT learned their lesson that they cannot exploit and make profit over patient care. These companies have demonstrated for years that they are only in the business for making money off of patient victims, and nothing else. If that is not the case, why have the providers already indicated that they will raise prices double-digit for 2025. Maybe they don't care that they violate the Medicare Trust Fund and those obligated to enforce policy at the CMS. If they are powerful enough to talk down to government officials and exploit paid policy holders, then they must be brazen enough to spend the rest of their lives in prison on involuntary murder charges. Something has to be done, and we have had enough cheap talk and lies and deception from the US Congress and Senate. Get off your posterior ends and shake up the System instead of supporting the illegitimate status quo that is helping no one except these obscenely deplorable private Health Insurance Companies. These companies are an embarrassment to our Nation, and the US Congress are not much better when they kowtow to the private industry.