New Medicare Advantage Rule Threatens Beneficiary Choice and Affordability

In the landscape of American healthcare, the Medicare Advantage program stands as a relative beacon of innovation and choice for more than 30 million seniors and individuals with chronic conditions. With satisfaction rates soaring to 94 percent, it’s clear that this program isn’t just functioning; it’s thriving in a way the rest of the Medicare program simply is not.

Despite this track record, the Centers for Medicare & Medicaid Services (CMS) has introduced a new marketing rule which threatens to undermine this success. Such a rule poses significant risks to the very seniors it claims to protect. Specifically, the rule fixes the compensation licensed insurance agents can receive for helping beneficiaries enroll in plans. It also targets the health insurance brokerage firms these agents work with by eliminating the administrative payments they can receive from Medicare Advantage plans for enrollment and support services. These highly regulated brokerage firms are a critical link between seniors and the array of Medicare Advantage plans available by providing them with plan comparison services, enrollment guidance, and ongoing support. 

By intervening in this way, CMS risks upending the system altogether. There is a network of licensed and trained agents, who specialize in navigating the complexities of Medicare Advantage plans and help seniors find the best choice for them. The CMS proposal would drive some of these agents out of business or hinder their ability to provide these services. This isn’t just about tightening regulations. It’s about restricting the flow of information and assistance that beneficiaries rely on to make informed decisions about their healthcare.

The proposed rule would lead to a significant reduction in the number of licensed brokers and agents able to participate in the Medicare Advantage marketplace. By setting compensation rates and eliminating the brokerage firms’ means to maintain their business operations, this rule would slowly drive agents, brokers, and firms out of business – especially independent agents and smaller firms. This misguided approach would then limit access to Medicare Advantage options by forcing many seniors to work with each individual carrier who will only offer them their own plans, instead of being able to assess plan options from multiple carriers at once.

This contraction not only diminishes choice but also risks escalating premiums and confusing seniors. Many will be left trying to match their healthcare needs with the most suitable plan with little to no guidance. In this way, CMS’s latest proposal is a stark example of regulatory overreach that could destabilize a well-functioning market, limit healthcare options, and ultimately drive up costs for taxpayers. It is a solution in search of a problem.

The bitter irony of CMS’s proposal is that it ostensibly aims to protect consumers, yet it stands to do the exact opposite. By impeding the operations of health insurance brokerage firms, the rule could inadvertently pave the way for a less competitive and more monopolized healthcare system. This shift would not only stifle innovation but also erode the quality of service that has created the environment for Medicare Advantage to have the sky-high approval ratings it currently enjoys.

Any effective regulation must be balanced, targeted, and sensitive to the ecosystem it governs. That is the only way to genuinely help consumers. CMS’s current approach lacks this balance and threatens to unravel the very fabric of a system that is already serving – and continues to serve – seniors exceptionally well.

It is imperative that taxpayer and consumer voices are heard in support of reconsideration of the proposed rule. The stakes are too high to remain silent. Legislators and policymakers need to engage with stakeholders, seek out alternative solutions, and ultimately chart a course that preserves the integrity, choice, and affordability of the Medicare Advantage program. Millions of seniors in America depend on such a course.

David Williams is the President of the Taxpayers Protection Alliance.