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. . .
Allen, In reply to your comment. You may be right in a way in Medicare administrating the part D but what you are talking about is also socialized healthcare and not giving seniors a choice. I know drug companies make a good profit on their drugs but they also spend millions to develop them with strict government guidelines. As far as the part C plans that Insurance agents like you seem not to like and would rather sell them a supplement, the price of these are getting to expensive for them to afford. They would be on just original Medicare and a lot of these people would just not go to the Dr. unless it was an emergency. I have helped many a senior go through the maze of plans to find what would be best for them at this time. The way the new commission schedule is right now, I may not be able to afford to stay in business and help someone choose what would be best for them. Humana is trying to push the independents out of business in limiting commissions and saying a captive agent is better. Give me a break! They pay their agents a salary, benefits, office, supplies, marketing and also a commission to sell their plans. Humana agents are making about $500 a sale with all that included and they are this year getting paid a new commission to move their PFFS clients to PPO plans. This is the first year they have done this. In the past they only got the renewal since it was just a move to another plan. Is this churning? Not really because they made their PFFS a piece of crap so that clients almost have to get out of that plan. Smart business but not good for the clients. Now for in idependent agent they pay a whopping $160! WooHoo!
I am doing a service for my clients and the fact that you believe that I should not worry about my pay is ridiculous. I make sure that I am doing the best for my clients and spend on average almost 2 hours a clint to mae sure they get the right plan and understand it.
It seems like you think that the government knows best and should dictate our choices. Welcome Big Brother and I feel sorry for my children. Just look at how our government is running things at this time. Awesome!
I do worry about who I am doing a service for everyday!
It is pretty obvious that CMS does not want Medicare Advantage plans sold. Read between the lines. This year for those agents who abuse seniors you could loose your license, pay large fines and go to jail. Seems to me that CMS has a problem with these plans and how they are run. I for one do not care for these plans either. But you do what you want. CMS should administer part d, not private insurance companies. The extra money spent on Advantage plans could be used in a way that would really give Seniors better benifits. If CMS ran part d they could #1 Get better prices on the prescriptions. #2.Do away with the donut hole. #3. Lower the premium on part d.#4 Lower the copays for all drugs. CMS would not be in this for their profit, Private insurance companies are in this for the profit, no other reason. I believe what I just described is the way things will hopefully be real soon. So don’t worry about your commission. Worry about the people you are suppose to be doing a service for.
Where do we get our voice heard? Why don’t we have a chance to share our side on these situations and laws. We are dealing with Gov’t. that doesn’t know the difference between what Tier 1 and Tier2., let alone how the whole process of the MA’s work. I beleive there is a hidden agenda behind all of this. It’s not just trying to put us out of bussiness, I think we should switch jobs for a week and we all would better understand how it works. They as government don;t have Medicare and S.S. for retirement, they have their own plans. What’s that all about?
I like most of you have spent more hours researching, comparing, studing and certifing then I have talking to existing and possible new clients in the last month. If I had to put a dollar value on the preparation, maketing and the unproductive [ no commisions ] during this time it would be in the thousands. All of us who have been part of this market know that there is an inordinant amount of time just managing these clients. I have made it my bussines to take all my client calls. I have met them at doctors offices, called their children and reviewed the plans. I have even gone to the pharmacy and picked up their prescriptions. I help them sign up for state funded low income drug plans.
I have repaired garage doors, gone to the grocery store, picked up family members. I have been in the insurance bussiness since I was 21, and now I’m 52. I saw my own mother and father struggle with health issues. My mother had alzhiemers and my father had heart issues. They both died within 13 months of each other. For the last 5 years I drove 160 miles once and sometimes twice a week to get them to appointments, shopping or just a day out. I know that seniors reley on us for our judgement our friendship and our compassion.
Tell me CMS….how do I bill my client for my services, or as it seems you would prefer should I just mail them a letter and tell the to contact you……Big Brother.
THIS IS A JOKE, !! IS THIS CUBA…?? KNOW THEY WANT TO DICTATE HOW MUCH MONEY WE GET COMPENSATED FOR OUR SERVICES..?
Oh by the way Humana and UHC sounds like they were in support of this that is because the market in other ways.
They are basically putting me out of business I can not afford to sell for 100-125 now and get the rest when CMS is done. The bad thing is I am making apts to move clients plans within the same carrier because it is in their best interest. It will cost me. Oh but the dems who are supposed to be in favor of the middle class are letting the carriers keep it. Maybe if we formed a union they would allow us to eat. Just joking I would never do that but that I think is what they want
Simple is best! I have been meeting with seniors over the past week and they seem more frustrated over the changes that CMS has past down then we might all be. Many of the folks that use the Medicare Advantage programs know these plans change every year and want someone to reveiw the changes with them. Go figure it effects them. They also understand that we all do get paid a commission for this service. It is a simple fix. Pull the licenses of agents that are abusing and not following the existing marketing rules. What a concept. But instead we all now have our hands tied and our legs tied and any possible move to try to help someone, who asks for it, requires a major hurdle jump to be able to do it. Again, the few bad apples, as I like to say we have, do you think they won’t try to go around these rules? I know its happening already from some of my clients who I have talked to. They have been cold called, they have had people show up at their door, been served meals to get people to come to a presentation. Stop with all the pages of crap that they have to take so much time initiating and us reviewing and just get those that continue to do exactly what they want and those are the ones you are attempting to stop. I won’t even get going on the commission issue>
Man, it is only just beginning. I think I’ll hide for the next 4 years.
If you think this crap is bad, wait until the Feds get their hands on something like Universal Health Care!
TJ
http://medicareadvantageleadsnow.com