By Stacey Pogue, Justin Giovannelli, and Sabrina Corlette
In March 2025, the Facilities for Medicare and Medicaid Companies (CMS) proposed quite a few adjustments that may make it more durable for individuals, significantly these with decrease incomes and immigrants, to enroll in and renew Market protection. CMS justified the proposal as a method to cut back fraudulent and improper enrollments and improve program integrity, but the precise adjustments within the proposal belie the said premise. The proposed rule references a severe Market subject–unscrupulous brokers enrolling individuals 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 shopper complaints. Regardless of its premise, the rule fails to extend oversight or accountability for unethical brokers and ignores simple measures to deal with dealer fraud.
Making an attempt to discourage unauthorized enrollments by making it more durable for people to join protection is like making an attempt to “stop automotive theft by making it more durable for individuals to purchase automobiles.” But Congress might nonetheless double down on this strategy because it seeks methods to slash federal spending. The Home-passed price range invoice codifies CMS’ Market integrity rule. In a telling transfer, the invoice enshrines into regulation each rule provision that makes it more durable for individuals 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 helpful help to customers who need assistance enrolling within the Market. Given the clear hurt unhealthy actors pose to each Market customers and law-abiding brokers, there may be worth in figuring out common sense but neglected safeguards that may improve oversight and instantly handle system vulnerabilities that lie on the root of the issue, with out making it more durable for customers to enroll in or renew protection. This weblog publish explains the one coverage clarification associated to dealer accountability in CMS’ Market integrity proposal and identifies different simple, but thus-far-ignored, methods to curtail dealer misconduct.
Obvious position of enhanced direct enrollment platforms
In feedback to CMS concerning 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 partially by way of enhanced direct enrollment (EDE) within the federal Market. EDE allows accepted insurers and web-brokers to enroll customers in Market protection utilizing personal web sites that alternate data 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 continuously 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 hundreds of thousands 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 might entry and make adjustments to a shopper’s HealthCare.gov protection utilizing solely the buyer’s identify, date of start, 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 along side upstream advertising and marketing corporations that generate gross sales leads (referred to 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 applied a number of adjustments to stop dealer misconduct and shield customers. These adjustments fall into three classes:
- techniques adjustments to extend safety,
- elevated oversight of brokers, and
- shopper schooling and help.
As of July 2024, the Market requires a three-way name with the buyer earlier than a brand new dealer could make protection adjustments via enrollment web sites. This safeguard, which establishes shopper consent earlier than permitting a dealer to take commission-generating actions, brings federal Market safeguards extra in step with these in state-run Marketplaces. Following this motion, broker-initiated plan adjustments dropped almost 70 % and the redirection of commissions from a shopper’s unique dealer to a brand new one (an indicator of potential misconduct) fell virtually 90 %. Further system safety upgrades have helped shield towards misuse of dealer login credentials and require that brokers enter a shopper’s Social Safety Quantity, which is verified in real-time, earlier than finishing a web-based enrollment.
CMS additionally ramped up oversight of brokers. Between June and October 2024, CMS suspended a whole lot of brokers suspected of misconduct and revoked the authorizations of two EDE platforms. As well as, CMS deployed IT techniques to detect suspicious dealer exercise, prolonged its enforcement authority over dealer businesses that facilitate misconduct, inspired insurers to observe dealer exercise for pink 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 shopper consent discover and developed a mannequin script to assist brokers guarantee their purchasers are absolutely knowledgeable and that consent is sufficiently documented.
Lastly, in 2024, CMS elevated outreach to customers and re-allocated employees to evaluate and resolve shopper complaints about dealer misconduct extra shortly.
Shift in CMS’ strategy
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 strategy prioritizes rising paperwork verifications that customers should undergo enroll or renew over stopping dealer misconduct or holding unhealthy actors accountable.
The rule proposal doesn’t really set up any new oversight or safeguards to carry brokers to account for misconduct and unauthorized enrollments. Present guidelines already spell out CMS’ authority and course of when a dealer fails to adjust to the regulation 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” commonplace of proof when assessing potential misconduct by brokers. Past this nominal clarification, CMS notes that it might later replace steering to brokers or interact in future rulemaking.
CMS might already be utilizing the proposed evidentiary commonplace, though it’s not spelled out in rule at present. The preamble notes that the proposal isn’t anticipated to have any affect or create any burdens for brokers. Customers, then again, a few of whom have fallen sufferer to dealer misconduct, might be impacted by the rule. CMS anticipates that the proposal will trigger 2 million individuals to lose Market protection (and that’s with out accounting for protection losses that may be moderately anticipated from adjustments that may make it more durable for eligible people to enroll and renew).
Whereas proof from CMS signifies safety measures adopted in 2024 have helped curtail misconduct, current huge adjustments on the company name into query whether or not it will possibly preserve that progress. Sweeping layoffs in federal well being businesses, together with employees that instantly handle dealer fraud will affect the power of CMS to conduct wanted oversight of brokers and help affected customers.
Missed steps that instantly handle 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 various common sense, but neglected, coverage choices to deal with dealer misconduct whereas defending customers embody:
- Surveying state-run Marketplaces and adopting finest practices. On condition that state-run Marketplaces don’t expertise the enrollment-related fraud and misconduct seen within the federal Market, CMS might survey state Marketplaces to study extra about their use of efficient safeguards and oversight and combine finest practices into the federal Market.
- Making certain federal employees capability to resolve shopper complaints and conduct dealer oversight. Sweeping layoffs at federal well being businesses included 200 employees who carried out handbook casework to resolve shopper complaints about unauthorized dealer enrollments and make sure that customers are held innocent for any subsidies paid in the direction of a plan they didn’t choose. In October, effectively earlier than present upheavals for federal staff, it took CMS about 52 days to resolve a criticism about unauthorized enrollment. Staffing cuts name into query whether or not CMS can preserve, a lot much less enhance, that timeline and guarantee customers who’re victims of fraud or abuse are held innocent.
- Rising accountability for shopper consent. The Market requires that brokers 1) acquire a shopper’s consent to assist them enroll and a pair of) guarantee customers have reviewed and verified the accuracy of data on their software earlier than it’s submitted. Brokers should doc shopper evaluate and consent, however would not have to routinely submit proof of it. CMS permits documentation via any format, together with a recorded telephone name, textual content message, e mail, or signed kind and makes a voluntary mannequin consent kind and script obtainable. CMS might conduct shopper testing on its mannequin consent kind and script and, as soon as examined, require their use by brokers. CMS might additionally require that documentation of shopper consent be submitted and verified by an issuer earlier than a dealer receives a fee.
- Rising accountability for deceptive or fraudulent actions upstream within the enrollment course of. As detailed in a federal class motion lawsuit, deceptive adverts and name heart 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 subject advertising and marketing organizations that acquire and promote customers’ data or “leads” to brokers, CMS can leverage its rules 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 might step in to require entrepreneurs to register with {the marketplace} and meet requirements.
- Enhancing oversight of EDE. Whereas CMS patched identified 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 father or mother firm that has a lengthy historical past of noncompliance. It was topic to 4 suspensions between 2018 and 2024 as a consequence of considerations about submitting false Social Safety Numbers, failing to confirm shopper identification, and sending or permitting entry to delicate shopper data from outdoors 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 enough authority and employees capability to shortly handle EDE noncompliance points that might hurt customers or jeopardize Market integrity.
- Partnering with state departments of insurance coverage. CMS might extra readily share details about troubling patterns of dealer conduct with state insurance coverage regulators previous to the ultimate adjudication of a case. State insurance coverage regulators are chargeable for the licensure of brokers inside their states and could be necessary companions with CMS in defending customers from dealer misconduct.
- Establishing an obligation to behave within the shopper’s finest curiosity. Congress might require brokers who supply market protection to abide by a federal commonplace of conduct that obligates them to behave in the perfect curiosity of the buyer and be held liable if they don’t.
- Making certain victims get the protection they want. CMS ought to make sure that victims of fraud or abuse are eligible for an “distinctive circumstances” particular enrollment interval, starting when a shopper learns that she or he has been improperly switched to a brand new plan, to retroactively enroll within the plan of their selection.
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 price range invoice that may codify the rule. As an alternative, these insurance policies would roll again current efforts to streamline enrollment and renewal for customers and create a thicket of pink tape that may make it onerous or inconceivable for hundreds of thousands 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 affect or burdens” for brokers, even the unhealthy apples.