The Idaho Department of Insurance has ordered UnitedHealthcare and PacificSource Health Plans to immediately cease and desist practices that the state says intentionally limited access to Medicare Advantage plans and cut broker commissions during the ongoing open enrollment period.
The emergency orders, issued in late October, accuse both insurers of unfair and deceptive acts in violation of Idaho’s Trade Practices Law.
Over the last year, many insurers have cut commissions for some of their MA or Part D plans as the sector faces rising cost pressures. UnitedHealthcare previously said it stopped paying broker commissions for new enrollments for what it called a “small percentage” of its MA plans, beginning in July.
The Idaho insurance department is alleging that both insurers curtailed online and paper applications for MA plans, discouraged brokers from selling the plans, and rescinded commissions despite those commissions being built into the premiums Idaho consumers are charged. The department said it first became aware of these actions in September.
According to the orders, the insurers allegedly informed agents that MA commissions would be eliminated (UnitedHealthcare on Oct. 1 and PacificSource on Nov. 1) and that new zero-commission contracts would be required to continue doing business. Brokers told the insurance department they were warned that refusing to sign would result in loss of their contracts and ability to service other clients.
Both cease and desist orders require the insurers and their employees and brokers to stop concealing available MA products, creating disincentives for sales, or withholding commissions in a way that allegedly manipulates the market. The orders also provide the insurers the opportunity to request a hearing or appeal.
“We are aware of the outreach from the Idaho Department of Insurance regarding our decision to no longer pay agent commissions for new member enrollment into some UnitedHealthcare Medicare Advantage (MA) plans in Idaho,” a spokesperson for UnitedHealthcare told Becker’s. “This change has no impact on current members, and these plans will continue to be available to all Idahoans through https://www.medicare.gov, https://www.uhc.com/medicare, and UnitedHealthcare’s direct channels. This change is intended to help preserve the benefits that matter most to current members while supporting the long-term sustainability of these plans in a landscape of increasing regulatory and market pressure.”
Delaware’s Department of Insurance also issued a bulletin on Oct. 31, noting that actions such as withholding broker commissions and discouraging the sale of approved MA plans violate state and federal laws.
