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Federal Lawsuit Alleges Major Health Insurers Paid Kickbacks in Medicare Advantage Scheme
The U.S. Department of Justice has filed a sweeping civil lawsuit against three of America’s largest health insurers, accusing them of orchestrating a massive kickback scheme that corrupted the Medicare Advantage marketplace and discriminated against disabled beneficiaries.
In a 217-page complaint filed May 1, 2025, prosecutors allege that Aetna, Elevance Health (formerly known as Anthem), and Humana paid hundreds of millions in disguised kickbacks to major insurance brokers to steer seniors and disabled Americans into their Medicare Advantage plans, regardless of whether those plans best served patients’ needs.
The DOJ claims the insurers concealed these payments as “marketing,” “co-op,” or “sponsorship” fees while brokers—including eHealth, GoHealth, and SelectQuote—falsely marketed themselves to consumers as “unbiased” and “carrier-agnostic” advisors working in beneficiaries’ best interests.
Medicare Advantage, now a $450 billion program where private insurers deliver federal health benefits to vulnerable populations, has become a critical revenue driver for these companies. The program serves millions of seniors and people with disabilities nationwide.
The case originated with whistleblower Andrew Shea, former senior vice president of marketing at eHealth, who filed a complaint in November 2021. The Justice Department has since intervened, bringing seven causes of action under the False Claims Act on behalf of the United States.
Internal communications uncovered during the investigation reveal executives were aware of the arrangements’ illegality. One eHealth executive joked that Humana was paying “$15 [million]/year for a [web]site that drives 15 enrollments per year,” adding cynically, “Luckily the govt [sic] are generally morons.” Another acknowledged Aetna’s payment model was “not even a little compliant” and would trigger regulatory trouble if audited.
Beyond the kickback allegations, the complaint levels a more troubling charge: Aetna and Humana allegedly used their financial leverage to pressure brokers into enrolling fewer Medicare beneficiaries with disabilities, whom the insurers viewed as less profitable to cover.
“Insurers received money from Medicare based on the presentation of false claims tainted by kickbacks or rendered false by illegal discrimination against persons with disabilities,” states the DOJ complaint, alleging violations of federal anti-discrimination laws that mandate equal treatment for all eligible enrollees.
The lawsuit describes how brokers allegedly rejected referrals, screened calls, and actively steered disabled individuals away from these insurers’ plans to maintain their lucrative relationships.
The False Claims Act, under which the case is brought, imposes liability on entities that knowingly submit false claims to the federal government or engage in fraudulent conduct related to government payments.
This enforcement action comes as Medicare Advantage faces increasing scrutiny from regulators and policymakers. The program has grown rapidly over the past decade, with more than half of all Medicare-eligible Americans now enrolled in private Medicare Advantage plans rather than traditional Medicare.
Industry analysts suggest the case could have far-reaching implications for how insurers structure their broker relationships and marketing practices. The DOJ is seeking damages and civil penalties that could potentially reach into the billions of dollars if the government prevails.
The case also signals continued aggressive enforcement of healthcare fraud under the current administration. During his Senate confirmation hearing in March, Mehmet Oz, the recently appointed administrator of the Centers for Medicare & Medicaid Services, specifically pledged to prioritize cracking down on Medicare Advantage fraud, noting such abuse diverts resources from providers caring for patients with serious medical needs.
For the millions of Americans who rely on Medicare Advantage for their healthcare coverage, the case raises serious questions about whether the advice they received when selecting plans was truly in their best interest or was instead influenced by hidden financial incentives.
The defendant companies have not yet filed their formal responses to the allegations in court.
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8 Comments
This is an alarming case of alleged fraud and kickbacks in the Medicare Advantage program. If true, these practices put vulnerable seniors and disabled individuals at risk of not receiving the care they need. I’m curious to see how the investigation unfolds and what reforms may result to better protect beneficiaries.
Agreed, the scale of the alleged misconduct is troubling. Proper oversight and accountability are critical to ensure Medicare Advantage serves its intended purpose of providing quality, affordable healthcare for those who need it most.
The DOJ’s civil complaint paints a troubling picture of how profit motives may be undermining the core purpose of Medicare Advantage. I hope this case prompts a broader reckoning around the program’s design and implementation to better safeguard against abuse.
This case underscores the complex dynamics at play in the Medicare Advantage market. On one hand, the program aims to provide more choice and flexibility for beneficiaries. On the other, these allegations suggest financial incentives may be distorting the system in ways that harm consumers. Careful policy reform will be crucial.
Absolutely. Striking the right balance between choice, affordability, and consumer protection will require nuanced policymaking. Ensuring Medicare Advantage works as intended for beneficiaries should be the top priority.
While the details in the complaint are disturbing, I’m glad the Department of Justice is taking action to address these alleged violations. Maintaining the integrity of government healthcare programs like Medicare Advantage is essential for ensuring vulnerable populations receive the care they need.
The Medicare Advantage program has grown rapidly in recent years, and with that growth comes increased risk of abuse and misaligned incentives. This lawsuit shines a light on the need for stronger safeguards and transparency around marketing, enrollment, and broker compensation practices.
You raise an important point. As Medicare Advantage becomes an ever-larger share of the healthcare landscape, it’s crucial that the program’s expansion is accompanied by robust oversight to protect beneficiaries.