By Stacey Pogue, Justin Giovannelli, and Sabrina Corlette
In March 2025, the Centers for Medicare and Medicaid Services (CMS) proposed numerous changes that would make it harder for people, particularly those with lower incomes and immigrants, to enroll in and renew Marketplace coverage. CMS justified the proposal as a means to reduce fraudulent and improper enrollments and increase program integrity, yet the actual changes in the proposal belie the stated premise. The proposed rule references a serious Marketplace issue–unscrupulous brokers enrolling people in Marketplace coverage or switching their plans without their permission in the pursuit of commissions from health plans. This broker misconduct has been well-documented through media coverage, a federal lawsuit, and a spike in consumer complaints. Despite its premise, the rule fails to increase oversight or accountability for unethical brokers and ignores straightforward measures to address broker fraud.
Trying to deter unauthorized enrollments by making it harder for individuals to sign up for coverage is like trying to “prevent car theft by making it harder for people to buy cars.” Yet Congress may nonetheless double down on this approach as it seeks ways to slash federal spending. The House-passed budget bill codifies CMS’ Marketplace integrity rule. In a telling move, the bill enshrines into law every rule provision that makes it harder for people to enroll in or renew Marketplace coverage, yet leaves out the one rule provision that touches on broker oversight.
Agents, brokers, and web-brokers (collectively referred to here as “brokers”) provide valuable assistance to consumers who need help enrolling in the Marketplace. Given the clear harm bad actors pose to both Marketplace consumers and law-abiding brokers, there is value in identifying common-sense yet overlooked safeguards that would increase oversight and directly address system vulnerabilities that lie at the root of the problem, without making it harder for consumers to enroll in or renew coverage. This blog post explains the single policy clarification related to broker accountability in CMS’ Marketplace integrity proposal and identifies other straightforward, yet thus-far-ignored, ways to curtail broker misconduct.
Apparent role of enhanced direct enrollment platforms
In comments to CMS about the rule proposal, states that operate their own Marketplace widely reported that they do not have issues with broker fraud and improper enrollment; rather, this issue appears limited to states that use the federally facilitated Marketplace, HealthCare.gov. This different outcome appears to be explained in part by the use of enhanced direct enrollment (EDE) in the federal Marketplace. EDE enables approved insurers and web-brokers to enroll consumers in Marketplace coverage using private websites that exchange information with the back-end of HealthCare.gov. The federal Marketplace has allowed EDE since 2019, but it was not used in any state-run marketplaces before Georgia deployed it for 2025 coverage. Agents frequently use EDE to enroll consumers because it can offer a streamlined experience and integrated customer service tools. While brokers enroll millions of consumers in the Marketplace through EDE with no incident, it appears that weaknesses in the interface between EDE platforms and the federal Marketplace allowed unscrupulous brokers to enroll consumers or change coverage without consent. For example, before CMS added safeguards in mid-2024, an unscrupulous broker using an EDE platform could access and make changes to a consumer’s HealthCare.gov coverage using only the consumer’s name, date of birth, and state of residence. In addition, a lawsuit filed last year alleges that a company that runs two EDE platforms was part of a broad scheme in conjunction with upstream marketing companies that generate sales leads (called “lead generators”) and broker call centers that used misleading ads and call-center scripts to enroll consumers without informed consent at high volumes.
CMS’ initial response
Starting in 2024, CMS under the Biden administration implemented several changes to prevent broker misconduct and protect consumers. These changes fall into three categories:
- systems changes to increase security,
- increased oversight of brokers, and
- consumer education and assistance.
As of July 2024, the Marketplace requires a three-way call with the consumer before a new broker can make coverage changes through enrollment websites. This safeguard, which establishes consumer consent before allowing a broker to take commission-generating actions, brings federal Marketplace safeguards more in line with those in state-run Marketplaces. Following this action, broker-initiated plan changes dropped nearly 70 percent and the redirection of commissions from a consumer’s original broker to a new one (an indicator of potential misconduct) fell almost 90 percent. Additional system security upgrades have helped protect against misuse of broker login credentials and require that brokers enter a consumer’s Social Security Number, which is verified in real-time, before completing an online enrollment.
CMS also ramped up oversight of brokers. Between June and October 2024, CMS suspended hundreds of brokers suspected of misconduct and revoked the authorizations of two EDE platforms. In addition, CMS deployed IT systems to detect suspicious broker activity, extended its enforcement authority over broker agencies that facilitate misconduct, encouraged insurers to monitor broker activity for red flags, and developed a system to share complaints about broker activity with state departments of insurance that license brokers and can investigate them. CMS also updated its model consumer consent notice and developed a model script to help brokers ensure their clients are fully informed and that consent is adequately documented.
Finally, in 2024, CMS increased outreach to consumers and re-allocated staff to review and resolve consumer complaints about broker misconduct more quickly.
Shift in CMS’ approach
Thus far under the Trump administration, CMS has reoriented its focus with respect to unauthorized enrollment. As illustrated by the proposed Marketplace integrity rule, CMS’ current approach prioritizes increasing paperwork verifications that consumers must submit to enroll or renew over preventing broker misconduct or holding bad actors accountable.
The rule proposal does not actually establish any new oversight or safeguards to hold brokers to account for misconduct and unauthorized enrollments. Existing rules already spell out CMS’ authority and process when a broker fails to comply with the law or the terms of their agreement with the Marketplace. The proposed rule tweaks just the transparency of that process. It clarifies that CMS will use a “preponderance of the evidence” standard of proof when assessing potential misconduct by brokers. Beyond this nominal clarification, CMS notes that it may later update guidance to brokers or engage in future rulemaking.
CMS may already be using the proposed evidentiary standard, even though it is not spelled out in rule today. The preamble notes that the proposal is not expected to have any impact or create any burdens for brokers. Consumers, on the other hand, some of whom have fallen victim to broker misconduct, will be impacted by the rule. CMS anticipates that the proposal will cause 2 million people to lose Marketplace coverage (and that is without accounting for coverage losses that can be reasonably expected from changes that will make it harder for eligible individuals to enroll and renew).
While evidence from CMS indicates security measures adopted in 2024 have helped curtail misconduct, recent massive changes at the agency call into question whether it can maintain that progress. Sweeping layoffs in federal health agencies, including staff that directly address broker fraud will impact the ability of CMS to conduct needed oversight of brokers and assist affected consumers.
Overlooked steps that directly address broker fraud
In its rule proposal, CMS acknowledges that broker fraud has receded, but argues that further action is warranted. Yet, this very proposal and the House-passed bill to codify it lack any actual steps to prevent and root out broker misconduct. The many common-sense, yet overlooked, policy options to address broker misconduct while protecting consumers include:
- Surveying state-run Marketplaces and adopting best practices. Given that state-run Marketplaces do not experience the enrollment-related fraud and misconduct seen in the federal Marketplace, CMS could survey state Marketplaces to learn more about their use of effective safeguards and oversight and integrate best practices into the federal Marketplace.
- Ensuring federal staff capacity to resolve consumer complaints and conduct broker oversight. Sweeping layoffs at federal health agencies included 200 staff who conducted manual casework to resolve consumer complaints about unauthorized broker enrollments and ensure that consumers are held harmless for any subsidies paid towards a plan they did not select. In October, well before current upheavals for federal employees, it took CMS about 52 days to resolve a complaint about unauthorized enrollment. Staffing cuts call into question whether CMS can maintain, much less improve, that timeline and ensure consumers who are victims of fraud or abuse are held harmless.
- Increasing accountability for consumer consent. The Marketplace requires that brokers 1) obtain a consumer’s consent to help them enroll and 2) ensure consumers have reviewed and verified the accuracy of information on their application before it is submitted. Brokers must document consumer review and consent, but do not have to routinely submit proof of it. CMS allows documentation through any format, including a recorded phone call, text message, email, or signed form and makes a voluntary model consent form and script available. CMS could conduct consumer testing on its model consent form and script and, once tested, require their use by brokers. CMS could also require that documentation of consumer consent be submitted and verified by an issuer before a broker receives a commission.
- Increasing accountability for misleading or fraudulent actions upstream in the enrollment process. As detailed in a federal class action lawsuit, misleading ads and call center scripts deployed upstream from brokers and web-brokers are allegedly driving some unauthorized Marketplace enrollments. While CMS does not have direct oversight of certain third-party entities, like lead generators or field marketing organizations that collect and sell consumers’ information or “leads” to brokers, CMS can leverage its regulations and agreements with issuers, brokers, and web-brokers to help drive upstream accountability. Where CMS needs additional authority to crack down on misleading marketing, as it has, for example, in Medicare Advantage, Congress could step in to require marketers to register with the marketplace and meet standards.
- Improving oversight of EDE. While CMS patched known weaknesses in EDE that appear to have provided the platform for unauthorized enrollments and plan switching at scale, additional oversight may be warranted. The two EDE platforms CMS suspended in 2024 share a parent company that has a long history of noncompliance. It was subject to four suspensions between 2018 and 2024 due to concerns about submitting false Social Security Numbers, failing to verify consumer identity, and sending or allowing access to sensitive consumer information from outside of the U.S. CMS raised concerns about various forms of noncompliance on a “near monthly basis” leading up to the platforms’ 2024 suspension. This history raises questions about whether CMS has sufficient authority and staff capacity to quickly address EDE noncompliance issues that could harm consumers or jeopardize Marketplace integrity.
- Partnering with state departments of insurance. CMS could more readily share information about troubling patterns of broker behavior with state insurance regulators prior to the final adjudication of a case. State insurance regulators are responsible for the licensure of brokers within their states and can be important partners with CMS in protecting consumers from broker misconduct.
- Establishing a duty to act in the consumer’s best interest. Congress could require brokers who offer marketplace coverage to abide by a federal standard of conduct that obligates them to act in the best interest of the consumer and be held liable if they do not.
- Ensuring victims get the coverage they need. CMS should ensure that victims of fraud or abuse are eligible for an “exceptional circumstances” special enrollment period, beginning when a consumer learns that he or she has been improperly switched to a new plan, to retroactively enroll in the plan of their choice.
Conclusion
Well-documented broker fraud is a significant program integrity issue for the Marketplace, yet CMS’ proposed Marketplace integrity rule takes no meaningful steps to mitigate it, nor does the House-passed budget bill that would codify the rule. Instead, these policies would roll back recent efforts to streamline enrollment and renewal for consumers and create a thicket of red tape that will make it hard or impossible for millions of people to access Marketplace coverage. Despite raising concerns about ongoing broker misconduct in its proposal, CMS tipped its hand. By its own telling, the rule would cause up to 2 million consumers to lose Marketplace coverage, while it would not have “any impact or burdens” for brokers, even the bad apples.
