UnitedHealthcare has filed a lawsuit against the director of the Idaho Department of Insurance, arguing that the state’s recent efforts to regulate Medicare Advantage plan marketing and broker commissions are in violation of the U.S. Constitution.
The lawsuit, filed Nov. 21 in a federal Idaho court, comes after the state’s insurance department joined others in issuing warnings or emergency orders aimed at preventing insurers from limiting access to MA plans and restricting broker commissions during the ongoing open enrollment period.
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 a “small percentage” of its MA plans, beginning in July.
According to the complaint, Idaho issued a bulletin in October announcing its position that state consumer protection laws permit the agency to regulate the marketing activities and commissions offered by MA plans. The bulletin stated that carriers must make enrollment applications available in all forms, must not engage in activity discouraging enrollment, must not change compensation or commissions mid-year, and must provide commissions if built into rate development.
Two weeks later, the department issued a cease and desist order to UnitedHealthcare, along with PacificSource, that alleged the insurers were intentionally limiting access to MA plans by curtailing online access to applications, rescinding agent commissions, discontinuing commissions to discourage enrollment, and removing online applications while making paper applications difficult to obtain.
UnitedHealthcare claims in the lawsuit that its actions were fully compliant with federal Medicare law and regulations. The company said it filed its anticipated commissions with CMS in July in a range of $0 to the maximum amount allowed, preserving its ability to reduce or eliminate those commissions for 2026. The company said it made adjustments to broker commissions and marketing practices to remain viable in Idaho’s MA market amid rising costs that have forced other plans to exit the state entirely.
The complaint is arguing that the federal government has exclusive regulatory authority over MA plans, with only two narrow exceptions for state licensing and plan solvency requirements. The lawsuit also notes that the Idaho insurance director stated publicly that the department did not seek permission from CMS before issuing the bulletin and did not believe it needed to do so.
UnitedHealthcare is seeking a declaration that the state’s regulatory efforts are unlawful and violate the Supremacy Clause of the Constitution, as well as an order to vacate the department’s bulletin and cease and desist order. The company is also seeking to prevent the department from imposing civil penalties.
