Federal judge stops Idaho from enforcing Medicare Advantage commission rules against …

A federal judge has issued a preliminary injunction that prevents Idaho from proceeding against UnitedHealthcare over its Medicare Advantage broker compensation methods. UnitedHealthcare took legal action against Idaho’s Insurance Director, Dean Cameron, after the state declared its ability to regulate MA plan marketing and broker commissions under state consumer protection regulations. Following this announcement, Cameron issued emergency orders to UnitedHealthcare and PacificSource, claiming that the insurers were impeding access to MA plans by restricting online applications and rescinding broker commissions.

Federal District Judge David Nye ruled in favor of UnitedHealthcare on December 22, indicating that the insurer is likely to succeed in its lawsuit. The lawsuit contends that federal Medicare laws preempt Idaho’s regulatory actions in this domain.

UnitedHealthcare revealed that it had submitted anticipated commissions with CMS in a range of $0 to the maximum permitted, stating that adjustments to broker compensation were essential to remaining competitive in Idaho’s MA market amid rising costs that have forced other plans to exit the state. The lawsuit asserts that the federal government holds exclusive regulatory authority over MA plans, with only a few exceptions for state licensing and solvency stipulations.

In December, CMS reiterated that federal law governs MA broker compensation and marketing methods. Insurance companies have been modifying their broker commission structures this year due to escalating costs and increased regulatory challenges, with many seeking to downsize their MA presence. As a result, at least 10 states have taken regulatory or public actions regarding MA plan access, reduced broker commissions, or other alleged market manipulation strategies that could adversely impact beneficiaries’ coverage selection.

The ongoing UnitedHealthcare lawsuit is closely monitored nationwide, with a court filing from Idaho’s deputy attorney general stating that the state’s actions were a key topic at a recent National Association of Insurance Commissioners conference, where multiple states were observing the legal proceedings.