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 may make it more durable 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 enhance 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 by 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 handle 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 “forestall automobile theft by making it more durable 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 price range invoice codifies CMS’ Market integrity rule. In a telling transfer, the invoice enshrines into legislation each rule provision that makes it more durable 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 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’s worth in figuring out commonsense but missed safeguards that may enhance oversight and straight tackle 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 put up explains the only 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 function of enhanced direct enrollment platforms
In feedback to CMS concerning the rule proposal, states that function their very own Market broadly reported that they don’t have points with dealer fraud and improper enrollment; somewhat, this subject seems restricted to states that use the federally facilitated Market, HealthCare.gov. This totally different final result seems to be defined partly by way of enhanced direct enrollment (EDE) within the federal Market. EDE allows authorised insurers and web-brokers to enroll customers in Market protection utilizing personal web sites that change 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 regularly use EDE to enroll customers as a result of it could supply a streamlined expertise and built-in customer support instruments. Whereas brokers enroll hundreds of thousands of customers within the Market by 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 shopper’s HealthCare.gov protection utilizing solely the patron’s title, date of beginning, and state of residence. As well as, a lawsuit filed final yr alleges that an organization that runs two EDE platforms was a part of a broad scheme along with upstream advertising and marketing firms 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 modifications to stop dealer misconduct and defend customers. These modifications fall into three classes:
- techniques modifications to extend safety,
- elevated oversight of brokers, and
- shopper 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 by 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 keeping with these in state-run Marketplaces. Following this motion, broker-initiated plan modifications dropped almost 70 % and the redirection of commissions from a shopper’s authentic dealer to a brand new one (an indicator of potential misconduct) fell nearly 90 %. Extra system safety upgrades have helped defend 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 watch 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 might examine them. CMS additionally up to date its mannequin shopper consent discover and developed a mannequin script to assist brokers guarantee their shoppers are totally knowledgeable and that consent is satisfactorily documented.
Lastly, in 2024, CMS elevated outreach to customers and re-allocated workers to assessment and resolve shopper 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 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 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 might later replace steerage to brokers or have interaction in future rulemaking.
CMS might already be utilizing the proposed evidentiary customary, though it isn’t spelled out in rule as we speak. The preamble notes that the proposal is just not anticipated to have any affect or create any burdens for brokers. Customers, then again, 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 moderately anticipated from modifications that can 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 modifications on the company name into query whether or not it could preserve that progress. Sweeping layoffs in federal well being businesses, together with workers that straight tackle dealer fraud will affect the flexibility of CMS to conduct wanted oversight of brokers and help affected customers.
Missed steps that straight tackle 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 commonsense, but missed, coverage choices to handle dealer misconduct whereas defending customers embody:
- 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 shopper complaints and conduct dealer oversight. Sweeping layoffs at federal well being businesses included 200 workers who carried out guide casework to resolve shopper complaints about unauthorized dealer enrollments and be certain that customers are held innocent for any subsidies paid in the direction of a plan they didn’t choose. In October, properly earlier than present upheavals for federal staff, it took CMS about 52 days to resolve a grievance 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.
- Growing accountability for shopper consent. The Market requires that brokers 1) acquire a shopper’s consent to assist them enroll and a couple of) guarantee customers have reviewed and verified the accuracy of data on their software earlier than it’s submitted. Brokers should doc shopper assessment and consent, however should not have to routinely submit proof of it. CMS permits documentation by 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 shopper 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 shopper 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 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 area advertising and marketing organizations that acquire 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 mum or dad firm that has a lengthy historical past of noncompliance. It was topic to 4 suspensions between 2018 and 2024 resulting from issues about submitting false Social Safety Numbers, failing to confirm shopper id, and sending or permitting entry to delicate shopper info from outdoors of the U.S. CMS raised issues about numerous 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 adequate authority and workers capability to rapidly tackle 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 conduct 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 will be essential companions with CMS in defending customers from dealer misconduct.
- Establishing an obligation to behave within the shopper’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 the perfect 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 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
Properly-documented dealer fraud is a major 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 purple tape that can make it laborious or unimaginable for hundreds of thousands of individuals to entry Market protection. Regardless of elevating issues 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.
