Medicare Marketing Regulatory Roundup: What’s Ahead for Agents and Brokers?
By Lauren Flynn Kelly
As the Oct. 1 start of marketing for the Medicare Annual Election Period (AEP) approaches, a recent court ruling gives sellers of Medicare Advantage plans some long-awaited certainty regarding compensation. At the same time, a bill introduced in the Senate offers hope in terms of differentiating independent agents and brokers from the “bad actors” that have plagued the industry and flummoxed CMS for years.
In August, a federal judge sided with plaintiffs that CMS was “arbitrary and capricious” when it issued rulemaking seeking to place a $100 limit on Medicare Advantage plans’ payments to agents and brokers for administrative services. The U.S. District Court for the Northern District of Texas agreed with the Council for Medicare Choice, which filed one of two lawsuits in the Texas court challenging CMS’s 2024 final rule, that Congress did not authorize CMS to set such rates and that CMS “may only regulate how compensation is used, not engage in ratemaking.”
Moreover, administrative payments relate to services other than enrollment and therefore do not fall within the plain meaning of “compensation,” (i.e., “payment or remuneration for a service”), according to the final order issued by Justice Reed O’Connor on Aug. 18. The order was the court’s consolidated response to separate challenges from CMS and Americans for Beneficiary Choice.
This marketing decision was “really top of mind” for plans and the agents and brokers that sell their products, remarks Helaine Fingold, who is a member of the law firm Epstein Becker & Green. It addressed challenges to marketing rules that were finalized for 2025 but never took effect, and the court “took a pretty broad brush” in suggesting that CMS “doesn’t even have the authority to set compensation at all.” That of course, raises questions about how CMS will regulate agent and broker pay in the future and whether the agency will appeal the ruling.
Industry Awaits Alternate 2026 MA Rule
While the court’s decision offers one level of certainty, another point of uncertainty is what’s in a second version of the 2026 MA and Part D rule that was submitted by the Trump administration to the Office of Management and Budget in July. As of Aug. 28, CMS-4208 was still marked as “pending review” at OMB.
Whether changes contained in that rule have to do with marketing is anyone’s guess. Keep in mind that CMS under the Trump administration punted on several items when it finalized the Biden administration’s proposed rule for plan year 2026. Beyond that, the Trump administration has yet to release its proposed policy and technical changes for 2027, which could very well spell out the agency’s intentions for marketing under the leadership of Mehmet Oz, M.D.
And let’s not forget that during his Senate confirmation hearing, Oz identified too many brokers as a top issue facing MA.
Meanwhile, independent brokers and agents recently welcomed the introduction of a bipartisan bill aimed at misleading marketing by third-party entities such as offshore call centers, which may have been what Oz was really referring to.
Introduced in the Senate on July 31, the bipartisan Independent BROKERS TIME Act of 2025 directs the HHS Secretary to establish a rule that would clarify the definition of third-party marketing organizations (TPMOs) and differentiate them from independent agents and brokers. The National Association of Benefits and Insurance Professionals (NABIP), in a press release praising the bill’s introduction, said the provision would “ensure independent agents and brokers are properly distinguished from large, unregulated marketing entities such as offshore call centers and private equity-financed lead generators.”
And as Rebellis Group President John Selby pointed out in a recent LinkedIn post, this would be very good news for agents selling MA plans as it would “correct the broad brush CMS applied when it first conceived of the definition and lumped together independent agents along with call centers and other marketers.”
BROKERS TIME Act Addresses Offshore Call Centers
At the same time, the bill seeks oversight of “predatory call centers” by ordering the Secretary to offer monetary rewards to individuals providing information on call centers engaging in marketing misconduct, and it would establish a standard registration process for independent agents and brokers.
Offshore TPMOs were frequently discussed in a Senate Finance Committee report, Pushing Medicare Advantage on Seniors: Unraveling the Complex Network of Marketing Middlemen, released earlier this year. Based on corporate presentations and feedback from industry experts obtained by the committee, the report observed that lead generation often begins with an offshore call center, resulting in a beneficiary’s data being sold numerous times, likely without their consent. Moreover, it noted that insurers’ contracts with TPMOs did not regularly address offshore call centers and TPMOs did not routinely monitor their lead generators’ use of “offshore involvement.”
That report was the culmination of an investigation led by Senate Finance Committee Ranking Member Ron Wyden (D-Ore.), who focused on misleading Medicare marketing when he chaired the committee under former President Joe Biden.
Even with Republicans in control of Congress, Fingold says she doesn’t envision less focus on his area, especially as the new administration eyes opportunities for cost savings.
In the meantime, sources wonder whether additional administrative payments will stem from the new ruling.
Bringing the court decision to the attention of investors, a recent MarketWatch article suggested the ruling means brokers “may be more focused on making money” than on consumers’ best interests and that if the court were to have upheld CMS’s compensation provisions, plans would be spending more on health care services and less on broker fees. The article noted that CMS has until Oct. 17 to file an appeal.
But to industry insiders, the ruling may present an opportunity to incentivize brokers to improve outcomes. “Rewarding carriers for true member satisfaction, plan longevity, and benefit activation that impacts the underlying cost of care seems especially ripe for some interesting incentives,” observed NCD CEO Sam Melamed in a recent LinkedIn post.
As the start of AEP nears, another major question is whether we’ll see a repeat of last year, when several insurers started pulling back on compensation for certain products in the middle of open enrollment. And as Fingold points out, that’s not technically a program violation because there’s nothing in the regulations that compels plans to proactively market every single plan offering or pay brokers to do so, for that matter.
Nonetheless, there’s a disconnect between that and the fact that brokers are less likely to promote a plan without compensation. “These are all issues that are going to be hanging out there and just waiting for Ron Wyden, who’s not going away. He has a platform and he’s going to use it.”
Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. Serving as the in-house Medicare Advantage subject matter expert for AIS Health, a division of MMIT, she wrote the biweekly trade publication Radar on Medicare Advantage from 2016 through 2025, and managed AIS Health’s other publications until they were sunset in August 2025. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. She is frequently called on as a panel moderator covering topics such as aging in place, supplemental benefits, Medicare marketing and product design. She graduated from Vassar College with a B.A. in English.