Biden Administration Backs Off From Medicare Agent Pay Fight
Two separate coalitions formed by distributors and agents sued over the regulation in the U.S. District Court for the Northern District of Texas.
O’Connor, the judge in charge of the cases, issued an order staying implementation of the regulation July 3.
Why the stay matters: The two coalitions, led by Americans for Beneficiary Choice and the Council for Medicare Choice, predicted that uncertainty about how to implement the agent pay regulation would disrupt information systems, agent training programs, marketing arrangements and other arrangements that have to be locked in by July, at the latest, to make the annual enrollment period go smoothly.
CMS and its parent, the U.S. Department of Health and Human Services, argued that the coalitions were exaggerating the extent of the disruption.
The judge sided with the coalitions.
If the coalitions were correct, and quick implementation of the changes had led to major Medicare plan enrollment period disruptions, the turmoil would have become apparent Oct. 15, as early general election voting was under way in many states.
By agreeing to accept the Texas court stay, CMS has pushed the impact from any efforts to implement the regulation back until 2025, at the earliest, months after the Nov. 5 Election Day.
Remaining hurdles: Insurers have submitted their 2025 Medicare plan rate proposals to CMS, which is still reviewing them.
Executives at UnitedHealth and Elevance Health have said this week during conference calls with securities analysts that they took a cautious approach to pricing but were not sure about what competitors might have done.
Although the threat from the agent pay change regulation appears to be gone, insurers’ cautious approach to pricing could lead to fewer Medicare plan options in 2025 and higher prices for the plans that are still on the menu.
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