Federal Lawsuit Alleges Health Insurers and Brokers Steered Seniors Into Unsuitable Medicare Advantage Plans for Profit
In a major legal development, federal prosecutors have accused several of the largest U.S. health insurers and insurance brokers of engaging in a widespread scheme to manipulate Medicare Advantage (MA) plan enrollments, allegedly prioritizing profits over the well-being of older adults.
According to a 217-page civil complaint filed under the False Claims Act on Thursday, the government claims that Aetna (a CVS Health subsidiary), Elevance Health (formerly Anthem), and Humana paid substantial kickbacks to three prominent insurance brokerages—eHealth, GoHealth, and SelectQuote—in return for pushing seniors toward specific MA plans between 2016 and 2021.
While no findings of liability have been made yet, the allegations present a serious challenge to the integrity of the Medicare Advantage system, which currently serves more than half of all Medicare beneficiaries.
The Alleged Scheme
The lawsuit, officially titled United States ex rel. Shea v. eHealth, et al., claims that the insurers knowingly engaged in a multi-year kickback arrangement with the brokers. In return for financial incentives, the brokers are accused of steering Medicare-eligible individuals toward insurance plans that maximized broker commissions rather than best matching the beneficiaries’ healthcare needs.
The government also alleges that Aetna and Humana conspired with brokers to minimize enrollment of disabled individuals, whom they considered less profitable. In some cases, the insurers allegedly threatened to cut off payments to brokers who enrolled too many disabled beneficiaries into their MA plans.
Potential Violations and Discriminatory Practices
Federal law prohibits insurers from discriminating against Medicare-eligible individuals with disabilities, as Medicare Advantage is a guaranteed-issue program—all qualifying beneficiaries must be offered coverage, regardless of health status.
The complaint alleges that brokers were pressured to focus on healthier applicants, a practice the government says undermines the purpose of Medicare Advantage and potentially violates anti-discrimination provisions.
“This case raises disturbing concerns,” said Leah B. Foley, U.S. Attorney for the District of Massachusetts. “If true, these practices represent a blatant disregard for the rights and needs of seniors and disabled individuals, who may have been funneled into plans not in their best interest, solely to maximize profits for insurers.”
CVS Health Under Legal Scrutiny
The lawsuit directly names CVS Health as a defendant, due to its ownership of Aetna. This filing comes in the same week that another CVS Health subsidiary, Omnicare, was hit with one of the largest False Claims Act jury verdicts to date—a $136 million judgment, which could escalate to over $400 million in total penalties. CVS has indicated it intends to appeal the Omnicare verdict.
Filed Under the False Claims Act
The Medicare Advantage complaint was originally brought forward by a whistleblower under the False Claims Act’s qui tam provisions, which allow private individuals to file lawsuits on behalf of the government. The Department of Justice chose to intervene and take over the case—a signal that it considers the claims credible and potentially significant.
Should the court find the defendants liable, they could face triple damages plus statutory penalties for any funds improperly obtained from the government.
The Department of Justice has requested a jury trial, indicating it intends to pursue the matter aggressively.
Industry-Wide Implications
This case adds to a growing chorus of concerns about the marketing and sales practices surrounding Medicare Advantage plans. Consumer advocates have long argued that seniors are too often misled by high-pressure tactics and misleading information, which can lead to enrollment in plans that don’t align with their health needs or preferred providers.
If the government’s allegations are substantiated, this case could trigger wider investigations across the Medicare Advantage space and reshape how MA plans are marketed and sold, especially through third-party brokers and digital platforms.Key Takeaways
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The federal government alleges that Aetna, Elevance Health, and Humana paid kickbacks to brokers to influence MA plan enrollments.
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Brokers are accused of steering seniors to plans that offered the highest commissions, regardless of suitability.
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Aetna and Humana allegedly worked to reduce enrollments of disabled individuals.
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The case was brought under the False Claims Act and seeks damages and penalties.
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CVS Health, which owns Aetna and Omnicare, faces scrutiny from two major lawsuits in the same week.