The Idaho Department of Insurance has ordered three health insurers to immediately stop actions that limited access to Medicare Advantage plans during open enrollment, accusing them of intentionally suppressing sales to control enrollment numbers.
Cease-and-desist orders were issued to PacificSource Community Health Plans, UnitedHealthcare of the Rockies, and Care Improvement Plus South-Central Insurance Co., a UnitedHealthcare affiliate.
Regulators said they began investigating in September after receiving reports that the companies restricted online applications and provided too few paper forms.
Dozens of Idaho agents also reported the carriers planned to stop paying commissions on new Medicare Advantage policies – despite those commissions being built into state-approved rates.
Company representatives admitted the decision wasn’t about saving money but rather avoiding higher enrollment.
Regulators said they also heard directly from agents that insurers had told them not to market or sell any Medicare Advantage products at all.
By October, UnitedHealthcare executives allegedly told the department they were deliberately discouraging new enrollment “by any means possible.”
PacificSource, regulators said, went further – pressuring agents to sign new zero-commission contracts by Nov. 1 or risk losing their ability to sell any of its products.
Two producer bulletins later reinforced the push for paper-only applications and said commissions were being cut in parts of Idaho due to “market disruptions.”
With Medicare open enrollment ending Dec. 7, the insurance department said swift intervention was necessary to protect consumers and agents.
Under the cease-and-desist orders, all three insurers must stop any practice that hides, restricts, or delays access to Medicare Advantage applications, whether online or on paper. They must also restore commissions and halt efforts to disincentivize agents from selling the plans.
PacificSource was separately ordered to stop altering agent contracts in ways that regulators said were intended to “manipulate the market.”
UnitedHealthcare said in a statement that its commission changes only apply to new enrollments and won’t affect existing members.
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.
We think this marks a sharp warning from state regulators – cutting corners on access or agent pay to manage enrollment risk won’t fly, not with open enrollment in full swing and consumer options on the line.
