Key Trends in Dual-Eligible Health Insurance: Takeaways from the Medicarians Conference

Attorneys from Ropes & Gray attended the Medicarians Conference from March 31 to April 2, a premier event for Medicare Advantage (MA) and other health insurance brokers, agents, and distribution arms, as well as regional and large-market health insurers. The conference provided critical insights into regulatory challenges, enforcement trends, and investment opportunities shaping the health insurance space.

Key Takeaways

• Sector outlook: Medicare Advantage and other dual-eligible plans remain a highly attractive space for brokers, carriers, and those investors who can wrap their arms around the space.
• Broker and agent compensation: The Trump administration appears committed to supporting the Centers for Medicare & Medicaid Services’ (CMS) Final Rule on independent agent and broker compensation, which is likely to have far-reaching ramifications across the market.
• Regulatory questions: 2026 payment rate increases were announced on April 7, 2025, and should promote industry-wide growth. While other Trump administration priorities are still up in the air, it is clear that an enforcement focus on fraud, waste, and abuse continues.
• Market trends: Further consolidation in the dual-eligible brokerage and distribution sector is expected, but new participants continue to join the market.
• Generative AI: AI is making broker and agent operations more efficient, while carriers face heightened regulatory scrutiny over AI use.

Outlook: A Promising Yet Complex Landscape

Despite a regulatory overlay that imposes some barrier to entry on investors, the Medicare Advantage sector remains a highly attractive space for brokers, carriers, and investors. Strong enrollment growth, continued private equity interest, and AI-driven operational efficiencies position the industry for expansion. However, stakeholders must remain vigilant in adapting to evolving federal policies, enforcement priorities, and compensation structures.

The CMS Final Rule and Beyond

A key topic of discussion was CMS’s Final Rule on independent broker and agent compensation, issued in April 2024, which would introduce significant structural changes to the way brokers and agents are compensated if it goes into effect in its current form. The rule would:

• Increase the Fair Market Value (FMV) commissions brokers and agents are allowed to receive.
• Mandate that all such payments be made directly by health plans to brokers, rather than through Third-Party Marketing Organizations (TPMOs) or Field Marketing Organizations (FMOs).

While the Trump administration has stated that it will continue to defend the rule, despite significant staffing shortages across federal agencies that may slow enforcement efforts, the rule continues to be stayed by order of a Texas federal court.

Payment Rates and Policy Direction

The industry is also closely watching Medicare Advantage and Part D payment rates for 2026, which were announced on April 7, 2025, and increase CMS’s reimbursement to MA plans by 5.06%. While the announcement seems encouraging, MA plans will likely need to consider operational changes (including bid updates and planning for annual enrollment periods). There is also optimism that the Trump administration will take a lighter regulatory approach than its predecessor, but key officials, such as U.S. Secretary of Health and Human Services Robert F. Kennedy Jr. and CMS Administrator Dr. Mehmet Oz, have yet to clarify their positions on MA oversight.

At the same time, the administration is signaling a strong stance on fraud, waste, and abuse in Medicare Advantage. Recent settlements and ongoing investigations, including the UnitedHealth Group probe, suggest that enforcement will remain a priority. However, it remains unclear whether the administration’s focus will center on bipartisan fraud issues—such as service denials and upcoding—or extend to consumer protection initiatives, such as the Final Rule’s broker compensation regulations.

Market Consolidation and Competitive Pressures

The regulatory overlay (and related compliance infrastructure) is expected to drive further consolidation among the largest players in the dual-eligible insurance distribution sector, which is already more concentrated than other insurance distribution markets, such as property and casualty insurance. However, low barriers to entry continue to attract new participants.

Despite regulatory overhang, the long-term growth trajectory of Medicare Advantage and other dual-eligible health insurance remains strong. Persistent enrollment growth has encouraged carriers and brokers to maintain expansion strategies, particularly as the administration appears to be more focused on Medicare than Medicaid (for example, Dr. Oz has indicated that he supports expanding Medicare Advantage). Private equity interest in the space also remains robust, as investors who are willing to navigate the regulatory complexities seek to capitalize on sustained enrollment growth.

Technological Innovation

One of the most prominent trends discussed at the conference was the adoption of generative AI, which is transforming broker and agent operations by enhancing:

• Call script generation for sales teams
• Agent compliance monitoring to ensure regulatory adherence
• Administrative automation to reduce overhead costs
• Other support services, including sales plan development

While carriers face heightened regulatory scrutiny over AI use—including regarding algorithmic discrimination in underwriting and claims processing—brokers and agents are generally subject to a lesser degree of insurance regulation and stand to benefit significantly from AI-driven efficiencies.

However, AI’s growing role in agent oversight and compliance raises critical regulatory and business model questions. TPMOs and FMOs are required to record calls and ensure beneficiary protections, which may necessitate new investments in AI-driven compliance tools. The Final Rule’s prohibition on TPMOs and FMOs providing free services to independent brokers could disrupt traditional support structures, potentially requiring brokers and agents to purchase monitoring tools independently.

If you have any questions concerning this article or other matters in the evolving Medicare and dual-eligible health insurance landscape, please do not hesitate to contact one of the authors or your regular Ropes & Gray advisor.