By Stacey Pogue, Justin Giovannelli, and Sabrina Corlette
In March 2025, the Facilities for Medicare and Medicaid Providers (CMS) proposed quite a few modifications that will make it tougher for folks, significantly these with decrease incomes and immigrants, to enroll in and renew Market protection. CMS justified the proposal as a way to cut back fraudulent and improper enrollments and improve program integrity, but the precise modifications within the proposal belie the acknowledged premise. The proposed rule references a critical Market subject–unscrupulous brokers enrolling folks in Market protection or switching their plans with out their permission within the pursuit of commissions from well being plans. This dealer misconduct has been well-documented via media protection, a federal lawsuit, and a spike in client complaints. Regardless of its premise, the rule fails to extend oversight or accountability for unethical brokers and ignores easy measures to handle dealer fraud.
Attempting to discourage unauthorized enrollments by making it tougher for people to join protection is like attempting to “stop automobile theft by making it tougher for folks to purchase automobiles.” But Congress might nonetheless double down on this method because it seeks methods to slash federal spending. The Home-passed finances invoice codifies CMS’ Market integrity rule. In a telling transfer, the invoice enshrines into legislation each rule provision that makes it tougher for folks to enroll in or renew Market protection, but leaves out the one rule provision that touches on dealer oversight.
Brokers, brokers, and web-brokers (collectively referred to right here as “brokers”) present precious help to customers who need assistance enrolling within the Market. Given the clear hurt dangerous actors pose to each Market customers and law-abiding brokers, there’s worth in figuring out common sense but missed safeguards that will improve oversight and immediately deal with system vulnerabilities that lie on the root of the issue, with out making it tougher for customers to enroll in or renew protection. This weblog put up explains the only coverage clarification associated to dealer accountability in CMS’ Market integrity proposal and identifies different easy, but thus-far-ignored, methods to curtail dealer misconduct.
Obvious position of enhanced direct enrollment platforms
In feedback to CMS in regards to the rule proposal, states that function their very own Market extensively reported that they don’t have points with dealer fraud and improper enrollment; quite, this subject seems restricted to states that use the federally facilitated Market, HealthCare.gov. This completely different end result seems to be defined partly by means of enhanced direct enrollment (EDE) within the federal Market. EDE allows authorised insurers and web-brokers to enroll customers in Market protection utilizing non-public web sites that trade info with the back-end of HealthCare.gov. The federal Market has allowed EDE since 2019, however it was not utilized in any state-run marketplaces earlier than Georgia deployed it for 2025 protection. Brokers ceaselessly use EDE to enroll customers as a result of it will possibly supply a streamlined expertise and built-in customer support instruments. Whereas brokers enroll tens of millions of customers within the Market via EDE with no incident, it seems that weaknesses within the interface between EDE platforms and the federal Market allowed unscrupulous brokers to enroll customers or change protection with out consent. For instance, earlier than CMS added safeguards in mid-2024, an unscrupulous dealer utilizing an EDE platform may entry and make modifications to a client’s HealthCare.gov protection utilizing solely the patron’s title, date of beginning, and state of residence. As well as, a lawsuit filed final 12 months alleges that an organization that runs two EDE platforms was a part of a broad scheme at the side of upstream advertising and marketing corporations that generate gross sales leads (known as “lead mills”) and dealer name facilities that used deceptive adverts and call-center scripts to enroll customers with out knowledgeable consent at excessive volumes.
CMS’ preliminary response
Beginning in 2024, CMS below the Biden administration carried out a number of modifications to stop dealer misconduct and defend customers. These modifications fall into three classes:
- programs modifications to extend safety,
- elevated oversight of brokers, and
- client training and help.
As of July 2024, the Market requires a three-way name with the patron earlier than a brand new dealer could make protection modifications via enrollment web sites. This safeguard, which establishes client consent earlier than permitting a dealer to take commission-generating actions, brings federal Market safeguards extra according to these in state-run Marketplaces. Following this motion, broker-initiated plan modifications dropped almost 70 p.c and the redirection of commissions from a client’s unique dealer to a brand new one (an indicator of potential misconduct) fell virtually 90 p.c. Further system safety upgrades have helped defend in opposition to misuse of dealer login credentials and require that brokers enter a client’s Social Safety Quantity, which is verified in real-time, earlier than finishing an internet enrollment.
CMS additionally ramped up oversight of brokers. Between June and October 2024, CMS suspended lots of of brokers suspected of misconduct and revoked the authorizations of two EDE platforms. As well as, CMS deployed IT programs to detect suspicious dealer exercise, prolonged its enforcement authority over dealer businesses that facilitate misconduct, inspired insurers to observe dealer exercise for purple flags, and developed a system to share complaints about dealer exercise with state departments of insurance coverage that license brokers and may examine them. CMS additionally up to date its mannequin client consent discover and developed a mannequin script to assist brokers guarantee their purchasers are absolutely knowledgeable and that consent is satisfactorily documented.
Lastly, in 2024, CMS elevated outreach to customers and re-allocated workers to evaluate and resolve client complaints about dealer misconduct extra rapidly.
Shift in CMS’ method
To date below the Trump administration, CMS has reoriented its focus with respect to unauthorized enrollment. As illustrated by the proposed Market integrity rule, CMS’ present method prioritizes growing paperwork verifications that customers should undergo enroll or renew over stopping dealer misconduct or holding dangerous actors accountable.
The rule proposal doesn’t truly set up any new oversight or safeguards to carry brokers to account for misconduct and unauthorized enrollments. Current guidelines already spell out CMS’ authority and course of when a dealer fails to adjust to the legislation or the phrases of their settlement with the Market. The proposed rule tweaks simply the transparency of that course of. It clarifies that CMS will use a “preponderance of the proof” customary of proof when assessing potential misconduct by brokers. Past this nominal clarification, CMS notes that it could later replace steerage to brokers or interact in future rulemaking.
CMS might already be utilizing the proposed evidentiary customary, though it’s not spelled out in rule at this time. The preamble notes that the proposal just isn’t anticipated to have any influence or create any burdens for brokers. Customers, however, a few of whom have fallen sufferer to dealer misconduct, can be impacted by the rule. CMS anticipates that the proposal will trigger 2 million folks to lose Market protection (and that’s with out accounting for protection losses that may be fairly anticipated from modifications that can make it tougher for eligible people to enroll and renew).
Whereas proof from CMS signifies safety measures adopted in 2024 have helped curtail misconduct, current large modifications on the company name into query whether or not it will possibly keep that progress. Sweeping layoffs in federal well being businesses, together with workers that immediately deal with dealer fraud will influence the flexibility of CMS to conduct wanted oversight of brokers and help affected customers.
Missed steps that immediately deal with dealer fraud
In its rule proposal, CMS acknowledges that dealer fraud has receded, however argues that additional motion is warranted. But, this very proposal and the Home-passed invoice to codify it lack any precise steps to stop and root out dealer misconduct. The numerous common sense, but missed, coverage choices to handle dealer misconduct whereas defending customers embrace:
- Surveying state-run Marketplaces and adopting greatest practices. On condition that state-run Marketplaces don’t expertise the enrollment-related fraud and misconduct seen within the federal Market, CMS may survey state Marketplaces to study extra about their use of efficient safeguards and oversight and combine greatest practices into the federal Market.
- Making certain federal workers capability to resolve client complaints and conduct dealer oversight. Sweeping layoffs at federal well being businesses included 200 workers who performed handbook casework to resolve client complaints about unauthorized dealer enrollments and be certain that customers are held innocent for any subsidies paid in direction of a plan they didn’t choose. In October, nicely earlier than present upheavals for federal workers, it took CMS about 52 days to resolve a grievance about unauthorized enrollment. Staffing cuts name into query whether or not CMS can keep, a lot much less enhance, that timeline and guarantee customers who’re victims of fraud or abuse are held innocent.
- Growing accountability for client consent. The Market requires that brokers 1) acquire a client’s consent to assist them enroll and a pair of) guarantee customers have reviewed and verified the accuracy of knowledge on their utility earlier than it’s submitted. Brokers should doc client evaluate and consent, however do not need to routinely submit proof of it. CMS permits documentation via any format, together with a recorded cellphone name, textual content message, e mail, or signed kind and makes a voluntary mannequin consent kind and script obtainable. CMS may conduct client testing on its mannequin consent kind and script and, as soon as examined, require their use by brokers. CMS may additionally require that documentation of client consent be submitted and verified by an issuer earlier than a dealer receives a fee.
- Growing accountability for deceptive or fraudulent actions upstream within the enrollment course of. As detailed in a federal class motion lawsuit, deceptive adverts and name middle scripts deployed upstream from brokers and web-brokers are allegedly driving some unauthorized Market enrollments. Whereas CMS doesn’t have direct oversight of sure third-party entities, like lead mills or discipline advertising and marketing organizations that accumulate and promote customers’ info or “leads” to brokers, CMS can leverage its laws and agreements with issuers, brokers, and web-brokers to assist drive upstream accountability. The place CMS wants extra authority to crack down on deceptive advertising and marketing, because it has, for instance, in Medicare Benefit, Congress may step in to require entrepreneurs to register with {the marketplace} and meet requirements.
- Enhancing oversight of EDE. Whereas CMS patched recognized weaknesses in EDE that seem to have offered the platform for unauthorized enrollments and plan switching at scale, extra oversight could also be warranted. The 2 EDE platforms CMS suspended in 2024 share a dad or mum firm that has a lengthy historical past of noncompliance. It was topic to 4 suspensions between 2018 and 2024 as a result of considerations about submitting false Social Safety Numbers, failing to confirm client identification, and sending or permitting entry to delicate client info from exterior of the U.S. CMS raised considerations about varied types of noncompliance on a “close to month-to-month foundation” main as much as the platforms’ 2024 suspension. This historical past raises questions on whether or not CMS has ample authority and workers capability to rapidly deal with EDE noncompliance points that would hurt customers or jeopardize Market integrity.
- Partnering with state departments of insurance coverage. CMS may extra readily share details about troubling patterns of dealer habits with state insurance coverage regulators previous to the ultimate adjudication of a case. State insurance coverage regulators are accountable for the licensure of brokers inside their states and may be essential companions with CMS in defending customers from dealer misconduct.
- Establishing an obligation to behave within the client’s greatest curiosity. Congress may require brokers who supply market protection to abide by a federal customary of conduct that obligates them to behave in one of the best curiosity of the patron and be held liable if they don’t.
- Making certain victims get the protection they want. CMS ought to be certain that victims of fraud or abuse are eligible for an “distinctive circumstances” particular enrollment interval, starting when a client learns that she or he has been improperly switched to a brand new plan, to retroactively enroll within the plan of their alternative.
Conclusion
Nicely-documented dealer fraud is a big program integrity subject for the Market, but CMS’ proposed Market integrity rule takes no significant steps to mitigate it, nor does the Home-passed finances invoice that will codify the rule. As a substitute, these insurance policies would roll again current efforts to streamline enrollment and renewal for customers and create a thicket of purple tape that can make it laborious or unattainable for tens of millions of individuals to entry Market protection. Regardless of elevating considerations about ongoing dealer misconduct in its proposal, CMS tipped its hand. By its personal telling, the rule would trigger as much as 2 million customers to lose Market protection, whereas it could not have “any influence or burdens” for brokers, even the dangerous apples.
