The Idaho Department of Insurance has taken action against three health insurers over claims they limited access to Medicare Advantage applications. PacificSource Community Health Plans, UnitedHealthcare of the Rockies, and Care Improvement Plus South-Central Insurance Co. received cease-and-desist orders after an investigation found they were restricting both online and paper applications for these plans.
The inquiry started in September following reports from agents who said paper applications were being blocked. They also mentioned that the companies planned to stop paying commissions on Medicare Advantage plans, despite those costs being part of approved rates. Insurers told the department that cutting commissions was meant to discourage new enrollments, not to save money. According to the department’s order, agents were directly told that the companies did not want to sell these plans due to worries about the number of new enrollees.
In October, UnitedHealthcare representatives admitted to the department that the companies aimed to reduce enrollments by "any means possible." Agents also reported that PacificSource required them to sign new contracts that removed commissions by November 1, risking their contracts and ability to sell other PacificSource products if they refused. PacificSource also issued bulletins showing a preference for paper applications while removing commissions in certain Idaho areas, citing "market disruptions."
With Medicare open enrollment ending on December 7, the Idaho Department of Insurance said urgent steps were needed. The orders demand that the insurers stop all actions that block or hide access to Medicare Advantage plans and applications, whether online or on paper. They also must stop discouraging agents from selling these plans. PacificSource was specifically ordered to stop changing contracts to withhold commissions as a way to manipulate the market.
UnitedHealthcare said its decision to cut commissions affected only new member sign-ups, leaving current members untouched. A spokesperson said the move aims to protect benefits for existing members while supporting the plan’s long-term stability amid growing regulatory and market challenges.
These developments in Idaho come as the Medicare Advantage industry faces problems across the country. For example, Humana recently lost a court case over a government downgrade of its Medicare Advantage star ratings, which could mean billions lost in federal bonus payments. The star ratings affect how much federal funding these private Medicare plans receive.
Other states see changes too. In Vermont and New Hampshire, big insurance companies are pulling back on Medicare Advantage plans for 2026, affecting thousands. Regulators blame smaller federal payments and stricter rules. Last month, UnitedHealthcare announced it would exit Medicare Advantage plans entirely in 16 markets, mainly targeting preferred provider organization plans. This is part of their plan to shrink Medicare Advantage membership by 600,000.
The Idaho Department of Insurance’s orders highlight the pressure on insurers to keep Medicare Advantage plans accessible, especially during the critical enrollment period. The actions also reflect larger shifts in the Medicare Advantage market nationwide, as companies adjust to financial and regulatory hurdles.