North Dakota Seniors Could Feel the Impact of Unfair Medicare Sales Practices, Department Warns

BISMARCK, N.D. - As concerns grow nationwide over unfair trade practices in the Medicare marketplace, the North Dakota Insurance Department is calling attention to tactics that could limit seniors' access to unbiased advice and fair coverage options.

The Department has issued a bulletin warning all health insurance companies and licensed producers offering Medicare products in North Dakota against practices that restrict consumer access or unfairly manipulate compensation structures. The bulletin applies to all insurers and producers offering Medicare Advantage, Medicare Supplement, Cost Plans, and Prescription Drug Plans to North Dakota consumers eligible for Medicare.

In some states, insurance companies have attempted to restrict access to certain Medicare products by removing enrollment applications from carrier websites, discouraging producers from selling specific plans, or altering or discontinuing producer compensation mid-year. Such actions, the Department cautions, are considered unfair trade practices, unfair methods of competition, or deceptive acts under North Dakota Century Code §§ 26.1-04-02 and 26.1-04-03.

"North Dakota's seniors deserve clear, honest, and accessible information when choosing Medicare coverage," said Insurance Commissioner Jon Godfread. "When insurers manipulate the marketplace or penalize producers for helping consumers make the best choice, it undermines both competition and trust. We expect all companies and agents operating in North Dakota to follow the law and act in good faith."

Protecting Consumers and Upholding Fair Competition

The Department's bulletin clarifies that North Dakota's unfair trade practice statutes apply to both insurance producers and insurance companies. It is a violation of law to enroll a consumer in a product solely for the purpose of receiving higher compensation.

All licensed producers have an ethical and legal duty to ensure that insurance products are suitable and in the best interest of the consumer, taking into account factors such as prescription drug coverage, provider networks, overall cost, and affordability.

To maintain fair competition and protect consumers, the Department directs all insurers and producers to:

• Make enrollment applications easily accessible - in print, online, and through appointed producers.
• Not discourage enrollment in any product for compensation reasons.
• Not change commissions or compensation mid-year.
• Provide compensation only as approved in Department filings.

"Fair markets depend on fair play," Godfread said. "Artificially limiting options or changing compensation after filings have been approved harms consumers and the professionals who serve them. North Dakota will not tolerate these tactics."

Federal and Market Context

The Department's bulletin follows a national call to action from the National Association of Insurance and Financial Advisors (NAIFA) and other state regulators, including the Idaho Department of Insurance, which have raised similar concerns.

Federal rules already limit the number of insurers offering certain types of Medicare coverage - such as Cost Plans - based on enrollment thresholds set by the Centers for Medicare & Medicaid Services (CMS). In many smaller or rural North Dakota counties, only a few insurers are approved to offer Medicare Advantage or Cost Plans. Any additional restrictions or manipulations by carriers could further reduce consumer choice and access to trusted guidance.

Monitoring and Enforcement

The Department will closely monitor compliance and take enforcement action under North Dakota law against any insurance company or producer found to be manipulating the market or engaging in conduct that harms consumers.

Consumers who believe they have experienced misleading or restrictive sales practices related to Medicare products are encouraged to contact NDSHIP at (888) 575-6611 or visit insurance.nd.gov.