I suppose you can disregard updates 1-3, read on. . .
This started with Rep Pete Stark’s letter to Kerry Weems. Here is the article:
“Rep. Pete Stark (D-CA), chairman of the House Ways and Means Health Subcommittee, called on the” Centers for Medicare & Medicaid Services (CMS) “to cap Medicare Advantage sales commissions after reports that some health plans are paying higher broker commissions in a move he said runs counter to new federal regulations.” As of September, commissions are required to “stay the same over five years.” Rep. Stark contended, however, that “some health plans are offering commissions four times higher than they have in previous years” in a letter to acting CMS Administrator Kerry Weems. By “paying a higher amount in upfront commissions,” he added, a broker “stands to make much more over five years.”
Last night, United HealthCare issued a press release supporting further regulation of broker commissions. Here is the quote from United HealthCare:
“We welcome further action by CMS to regulate broker commissions. Earlier this year we voiced support before the Senate Finance Committee in favor of regulation to levelize broker commissions. We would also welcome regulation that establishes reasonable industry-wide broker commission norms.”
Also, last night Humana weighed in to support capping commissions paid to independent agents:
“Nine months ago, we called for capping commissions and total compensation paid to contracted agents and brokers. Consistent with our position, we support Chairman Stark’s proposal,” said Humana spokesman Tom Noland. “We believe this payment method ensures that agents and brokers are rewarded only when seniors are satisfied with their choices, and penalizes agents and brokers who use marketing tactics that result in beneficiaries signing up for a product they do not fully understand.”
A notice came out later last night from from Abby Block, Director, Center for Drug and Health Plan Choice (CPC) which rescinds the October 8th guidance (which changed the October 1st, guidance).
CMS is aware that there is significant concern about agent/broker commissions for benefit year 2009. As a result, we are rescinding our October 8, 2008 guidance document. We are working on ways to address the concern and expect to take regulatory action next week. We strongly suggest that you keep this in mind as you contemplate making any final arrangements regarding commission structures.
Note from Craig:
Why should CMS stop at regulating broker commissions? I think they should put a CAP on Direct-to-Consumer Ad Spending as well? What if a company spends too much on Advertising directly to the consumer? I think the Federal Government needs to help them out with this decision, too. Apparently, insurance companies aren’t capable of making a business decision on spending to acquire new business from independent agents, what’s to say they know how much money to spend on Advertising to acquire new business directly? I’m tired of those 30 minute infomercials on CNBC, anyway! I could go on. . .
I also sent a letter to Rep. Stark via his website. It’s a little lengthy so I’m not copying it all here.
I have the basic context of the letter posted to the web here:
http://medicareadvantageplan.blogspot.com/
I made a few modifications in pronoun use, and other minor changes from the letter to the posting but it essentially the same.
I’m not promoting anything and feedback can be sent via the posting.
I cannot believe that the few bad agents can so effect what the majority of the agent community have been able to do….Help Support Our Seniors In Our Community. I have never sold a product that I have to spend so much time on for such little money and now you want to take that away. What will the Seniors do without our expertise and guidance to help them through this enrollment process……
I am all for protection of our senior citizens rights….and I am a medicare receipent..have been
in the insurance industry for over 30 years ,..not one complaint…the med advantage programs are of
tremendous value to us seniors.. most of our clients would never have taken action to help themselves to get necessary medical care .. if not for good honest agents to help them …this CMS crap is going to drive many lifelong career agents out of this business..but most of all ..it HURT THOSE SENIORS WHO NEED OUR EXPERTISE AND GUIDANCE..
My number one complaint with CMS is that they do not know how the insurance business works. Quite often they set rules only later do they have to change them because, “we didn’t realize (insert topic here) was so common”. It would be SO helpful if they consulted with a small number of agents (not just health plans) nationwide before coming out with new rules. The agent community can provide a wealth of knowledge and help CMS avoid some potential roadblocks.
Lastly, I hate rules that penalize the majority for the acts of the minority. If there are health plans and/or agents out there doing bad things, come down on them…hard.
The fact is CMS has the power to control what we make and how much! As an owner of a decent size firm with 30 agents we are now swithing the way we run our business. We believe that the MA business will be non-existent in the next few years and yes ride the wave while its hot but it is most important to be building a future outside of the MA’s. Life Insurance, Reverse’s etc.
Personally,I think we need to impeach everyone in government because they have not done their job. Remember they supposedly work for us, if we had done what these yawhose have done we’d all been fired (but without pay or benefits).Americans have become so complacient and the idiots at the top know that we won’t do anything or remember who did what so they do whatever they want. Insurance is not something they need to be dealing with because, are they licensed, are they trained, they have no idea of the mechanics or even what they do, than the man on the moon,and yet they keep legislating garbage. Do you realize in the state of ok. this year we lost thousands of doctors who will accept medicare’s fees due to their leg. and paycuts, if they keep implementing all this garbage where will seniors go if they can’t even get private ins(ma) and no doc’s take medicare, where are these old guys going to go? Or for that matter where are any of us gonna go, Mexico. The only thing these idiots have managed to do is sell America out, better yet, let’s send them to Iraq to earn their paycheck maybe that would give them a reality check!
Toni
Hooray for Tony, Frank & Phil’s comments. I don’t have the 30 year experience some of you have, but I do have over 6 years and got into this business to help people. I love working with Seniors and have a lot of them in my family that I help. I was set to recertify this year for the upcoming MA plans and even have a major department store chain that I have partnered with to get the word out to Seniors about the plans available. I am re-thinking that now, especially since I can’t talk to them about any other products/concepts I help other clients with. Why is it fair that I can talk to someone 64 or younger about anything I want to relating to health, life, retirement, etc. at the same appointment BUT can’t do that with the seniors ?? It’s a slap in the face to the senior in my opinion! It makes it seem they aren’t capable of making any decisions & are confused, illiterate, stupid, etc. because we’ve got to come back to them at a later date to talk about any other products/services that may be in their best interest!
I think all of this regulation is a big slap in the face to the Seniors and the “good” agents who are trying to educate the American people about their choices and solutions. Many of the Seniors are very smart; they try & educate themselves about all the health & planning products/concepts going on in the world. Yes, some of them are misguided and don’t know or understand the benefits and concepts so it’s our job to help them. I so much agree — punish the bad apples and allow us “good” apples to help our clients, with whatever products and services they need. Quit regulating our commissions & our products!!!! These regulators have their own agenda’s ! Let us get on with the task at hand! People need us – our knowledge, expertise, our products , our services and the lasting relationships we can build!!!!!
I probably will not continue in the MA plans going forward. I will stick to the Med Supp’s but that still leaves an answer forthecoming about regulation of index annuities, which I sell & service a large book of business of. I may look at a new career. I had a 17 year banking career prior to this insurance/financial services career and found that industry getting too much regulation (I managed the collections departments – consumer credit & credit cards) so I may try my hand at something new – without heavy regulations! It’s a shame it’s come down to that. I have been building a great financial and insurance services practice and have spent a lot of money in building it & have developed many client frendships and lasting business relationships. We all lose.
As a career agent the Government is going one step too far. They should be forced to do their research in to the market and understand that most sales are done thru Independent Brokers not captive agents. The requirement of an Appintment Confirmation Form is ridiculous. An Independent Broker does not know which plan they will present to the client until they have done some fact finding in the home such as which providers the client uses. Most of the big plans are aproviding voice recording capabilities but if you don’t know which plan it would be awkward to retrieve the voice recording from a different company.
There is good reason I am voting for John McCain.
Personally, I thing Congressman Stark should not be paid while in sub-committee work, or at hearings, he should be required to undergo an increasing amount of E&O to maintain his position, he should have to give 48 hour notice everytime he wants to change the subject, and he should only be paid for every vote he casts – no vote, no pay. And then the rest of us should be able to write letters and try to change what the agreement is that he is paid per vote, and we should be able to do this every year – while at the same time he has to do more and more work that he gets no pay for.
Private Enterprise is supposed to work to make government programs more accessible and impove the benefits. But it sounds as though our government representatives want to make Private Enterprise run as in-effeciently as the government programs they operate. We should tell our representatives to do there job, which it is to protect our rights to pursue success. We don’t need the governments ill advice on how to operate as the government does.