By Laura Skopec and Carrie Graham
As Medicare Advantage (MA) enrollment has surged over the past decade, so has spending on marketing and sales activities. The public funds paid to MA plans now support a complex—and lucrative—network of third parties such as call centers, online sites, lead generators, and independent insurance agents and brokers. One report found that $6.9 billion was spent on agent and broker commissions in 2023, up from $2.4 billion in 2018.
Policymakers on both sides of the aisle have expressed concerns about unscrupulous marketing practices that threaten Medicare beneficiaries’ ability to make informed enrollment decisions. As MA has become increasingly dominated by a few large national plans, smaller local and regional MA plans argue that today’s marketing rules favor large, national insurers with the financial resources to dominate the marketing sector.
The Centers for Medicare and Medicaid Services (CMS) has recognized the importance of “leveling the playing field” for smaller MA plans in an increasingly consolidated market. Most recently, the Calendar Year 2027 MA and Part D proposed rule includes a Request for Information (RFI) seeking input on how to improve competition in MA.
This blog reports themes from a 2025 closed-door roundtable with 12 local and regional MA plans to highlight how current marketing rules may disadvantage smaller plans and why many of them support reforms that differ from those favored by large national insurers.
A small number of large national MA plans now dominate the MA market.
Of the over 34 million Medicare Advantage enrollees in 2025, 77% were enrolled in one of 8 large national plans (defined as having over 500,000 enrollees across multiple states and regions). In contrast, less than a quarter were enrolled in one of 150 local and regional MA plans. These smaller, non-national plans typically have different business models, methods of operation, smaller service areas, and fewer financial resources than the larger, national plans.
Local and regional MA plans play an important role in the MA marketplace
Roundtable participants reported that smaller MA plans are better able to innovate to meet the needs of Medicare beneficiaries in their regions because they are more connected to their communities, have established local relationships, and have more local market expertise than larger plans. Their smaller scope also enables quicker decision-making and more efficient implementation of new care models with less bureaucracy than larger plans that must coordinate across numerous markets.
Unscrupulous marketing of MA is a common complaint
During the annual open enrollment period, Medicare beneficiaries are inundated with advertisements, emails, phone calls, direct mailers, and television ads promoting MA plans. And each year, there are beneficiary complaints and reports about the use of unscrupulous marketing practices such as providing misleading or incomplete information to beneficiaries, cold calling beneficiaries, and even enrolling beneficiaries in an MA plan without their consent. Some MA plans have also been accused of discouraging enrollment in less profitable plans by reducing or eliminating agent and broker commissions for those plans. The Department of Justice filed a whistleblower-instigated False Claims Act suit against some large national plans for allegedly providing illegal kickbacks to agents and brokers in exchange for selling their plans. Another recent study found that smaller MA plans are sometimes left out of independent agents and brokers’ books of business entirely.
In 2023, CMS took steps to rein in MA marketing by finalizing a suite of MA marketing regulations aimed at protecting beneficiaries from misleading or aggressive sales practices, including limiting agent and broker compensation, more required disclosures and disclaimers, and more oversight of marketing communications and sales calls. Since then, some of these have been rolled back by CMS or the courts.
What marketing reforms could level the playing field for local and regional MA plans?
Smaller MA plans compete with large national insurers that have far greater financial resources, allowing them to invest heavily in marketing, technology, and analytics. Smaller plans can struggle to keep up with the high advertising spend of large MA plans. Larger plans can also spread high care costs and administrative costs across a larger beneficiary base, keeping their premiums and supplemental benefits more stable.
In the 2025 MPI roundtable with smaller plans, one participant described agent and broker commissions and other marketing costs as, “high, wasteful, and variable.” Some attendees indicated that agent and broker commissions can add 3-8% to costs, a significant investment for small plans. To level the playing field, smaller plans suggested several reforms to marketing, including:
- Improve transparency in the third-party marketing industry. Some participants suggested CMS could collect data on the total amount paid to agents and brokers, including all fees, bonuses, and add-ons, to improve transparency into the MA sales market.
- Doing more to ensure that third party marketers are providing beneficiaries with complete information about all their plan options. Or at least informing beneficiaries if they are privileging one plan due to financial incentives. If this cannot be ensured, then CMS should consider limiting the presence of third-party marketers in MA.
- Consider more stringent caps on agent and broker compensation. Some roundtable participants echoed a recommendation from the Alliance of Community Health Plans (a trade organization that represents many local and regional plans) to cap spending on third-party marketing and strengthen CMS’s penalties for misleading marketing.
- Consider standardizing agent and broker payment, including all fees and add-ons, and/or standardizing the level of marketing spending per enrollee across MAOs. However, some roundtable participants were concerned that any cap on total payment could become the new minimum, pricing smaller plans out of the market.
- Improve and promote free consumer tools to help beneficiaries compare plans. Tools such as the online Medicare Plan Finder, the Medicare and You handbook, and federally funded State Health Insurance Assistance Programs are sources of free, unbiased information about plan choices. These resources should be continually improved to better help beneficiaries compare plans on factors such as star ratings, health outcomes, provider networks, prior authorization practices, denial rates, and supplemental benefits. Other studies and advocacy groups have indicated that the Medicare Plan Finder and other CMS tools are inadequate to meet beneficiaries’ needs for support, and that improvements could help reduce beneficiaries’ reliance on paid agents, brokers, and advertising.
Challenges to regulating MA marketing
While MA is a taxpayer-funded program that requires substantial government oversight to ensure fiscal responsibility and beneficiary safety, policymakers face many challenges to regulation and oversight of plan marketing, including:
- Industry pressure to reduce plan burden. Policymakers struggle to balance the need for MA transparency and oversight with a desire to reduce administrative burdens on plans.
- Courts have limited CMS’s ability to regulate MA marketing. In 2025, a Texas court ruled that CMS does not have the authority to comprehensively regulate fees and add-ons for agents and brokers under the current rules, so changes to commissions rules would require legislation passed by Congress.
- States have no jurisdiction to regulate MA marketing. While state Departments of Insurance have a responsibility to regulate marketing of other health insurance products, they have no authority over MA marketing. In 2025, when a few states tried to limit the practice of reducing or eliminating commissions for less profitable plans during open enrollment, some MAOs sued to block any enforcement action. CMS later clarified that states do not have the authority to regulate agent and broker commissions in MA.
- The complexity of the current marketing landscape can impede oversight. It can be hard to tease out the relationships and roles of independent agents and brokers versus third-party marketers versus overseas call centers, making it difficult to disentangle various entities and craft targeted policy solutions.
Next steps on MA marketing
Overall, it is not clear that spending more on marketing in MA successfully improves beneficiary decision-making or helps enroll beneficiaries in products that best suit their needs. At MPI’s roundtable, smaller plans argued that focusing on improving the quality of beneficiary care, rather than on aggressive marketing, would be a better use of taxpayer funds.
As with many other issues in MA, an important first step is increased transparency. CMS currently has the authority to collect and release more data to inform policy, such as more granular data on marketing spending, as well as total agent and broker payments (not just commission payments). CMS’s recent Request for Information on advancing competition and leveling the playing field through changes to risk adjustment and the Star Ratings system is an important first step, but CMS could also go further to collect information and ideas to help enhance competition through better oversight of marketing practices and stronger enrollment supports.
In areas where CMS authority is unclear, increased regulation of MA marketing would require Congress to pass targeted legislation. Additional policy proposals are available in the Compendium of Policy Proposals for Medicare Advantage and Part D.