Federal Court Blocks Medicare Agent Pay Cap Regulations

A federal judge in Texas has blocked the Centers for Medicare and Medicaid Services from enforcing its new pay rules for Medicare agents.

If the stay survives court challenges, it will apply to all Medicare agents throughout the U.S.

U.S. District Judge Reed O’Connor issued the ruling in response to Americans for Beneficiary Choice et al. v. the U.S. Department of Health and Human Services et al. and the Council for Medicare Choice et al. v. HHS et al. The defendant list includes CMS, which is part of HHS, and the heads of HHS and CMS.

“Universal relief makes sense here,” O’Connor wrote in an opinion explaining his ruling.

CMS and HHS want to apply their pay rules to all agents, and the plaintiffs need stability for the entire Medicare plan distribution system, not just for themselves, O’Connor added.

O’Connor said he is issuing the stay because he believes CMS will lose in court, partly because it failed to explain clearly why the increase in agent pay is $100 rather than higher.

Representatives for CMS and the plaintiffs were not immediately available to comment.

What it means: The Medicare Advantage plan annual enrollment period for 2025 is set to start Oct. 15 and run through Dec. 7.