DOJ Accuses Major Health Insurers of Medicare Advantage Kickback Scheme

The U.S. Department of Justice has filed a lawsuit against three of the largest U.S. health insurers—Aetna (owned by CVS Health), Humana, and Elevance Health—alleging they paid hundreds of millions in illegal kickbacks to insurance brokers from 2016 to 2021 to steer seniors into their Medicare Advantage plans.

Filed in federal court in Boston, the complaint claims the companies violated the False Claims Act by disguising the payments as “marketing,” “co-op,” or “sponsorship” fees. These alleged kickbacks were paid to brokers including eHealth, GoHealth, and SelectQuote to secure more enrollments, regardless of whether the plans met patients’ healthcare needs.

The DOJ argues that the brokers, motivated by financial incentives, pushed Medicare beneficiaries toward higher-paying plans instead of offering unbiased advice. Some brokers even refused to sell plans from insurers offering lower commissions. The government further alleges that Aetna and Humana sought to reduce enrollments by people with disabilities, who were considered less profitable, by threatening to withhold payments.

All the accused parties have denied wrongdoing. CVS Health and Humana vowed to defend themselves, while Elevance Health stated it complies with federal regulations. GoHealth criticized the DOJ’s complaint as inaccurate, and eHealth dismissed it as meritless.

The case stems from a 2021 whistleblower complaint filed under the False Claims Act, which allows private individuals to sue on behalf of the government to recover funds lost through fraud. The DOJ’s decision to intervene this week marks a major escalation in the case.

Medicare Advantage, a growing market worth billions, allows private insurers to receive government payments for managing senior healthcare. This lawsuit could reshape how these plans are marketed and raise questions about oversight and ethical conduct in the industry.