I had a long day today (seminar this morning, lunch meeting then 6 hours on the road). I had a chance talk with several people on the phone during my drive regarding CMS’s Interim Final rule which revolves around broker/independent agent’s commissions.
Thanks to “Jack” for the link to the rule, here it is: http://federalregister.gov/OFRUpload/OFRData/2008-27041_PI.pdf.
If you go to page 17, you’ll see that Health Plans have two options. In short, I can’t see how a health plan will be able to pay more than $200/year for 5 years for replacement in 2009.
There seems to be no appreciation for the fact that the independent agent is the only source (save the Medicare Plan Finder for the 0.1% of Medicare Beneficiaries with the technical background to operate the website and understanding of risk, etc., to evaluate plans) for the Medicare Beneficiary to have a professional review their situation and evaluate, doctor and hospital networks, formularies and drug co-pays, plan premiums, plan benefits, value added benefits, etc., to make an educated recommendation.
There also seems to be no appreciation for the time the independent agent spends with their client resolving issues with the plan.
It’s been a long day and I’m tired, I’ll blog more later, just felt compelled to share the bad news. . .I’ll fill in more of the blanks tomorrow . . .
Democrats really suck. This would not have happened if you did not have a bunch of freaks running congress and the senate. Wait until hussein gets in office, then we won’t have to work anymore, he’ll pay us to not work.
Craig, it is now a critical time to organize. We should put together a forum that discusses these issues and demands change. We are being treated very unfair and are experiencing a true disregard from the federal government and the health plans fro not taking up our cause. I am volunteering to organize the entire tri-state area. Please contact me ASAP so that we can begin the organizing process.
It looks like CMS is trying to tank all independent agents that are the only ones looking after the seniors needs. Seniors can’t get answers from the people at Medicare because they have no clue about what is the best for the client.
Looks like they are trying to put all the agents on the unemplyment line or Welfare.
I am deeply offended on how CMS is treating the very people that are on the front lines and actually doing the most for our clients.
Unbelievable!
Based on the wording of the ruling there seems to be 2 scenarios:
1. If a person is brand new to MA then the commission will be the full amount and we get 5 years of renewals at 50%.
2. If a person is already on an MA and they get switched then we get 50% of the full commission and we get the remaining years of renewals.
All this is based off of 2006 commissions plus inflation. Also they are on a 6 year window and 2009 is the first renewal year.
As I read the entire document, it appears that CMS wants commissions rolled back to 2006 levels. But we will receive renewals based upon 50% of that amount for anyone already in the MA “system.” Furthermore, ALL enrollments will paid at this level, even people not in the system. CMS will several times during the year inform the carrier which people are “new” and the additional commission will be paid. Yeah, sure!
What this means to me (if I’m interpreting it right) is that we’re really screwed. If my memory is correct, I received $250 for a Secure Horizons enrollment in 2006. This means that if I move someone into their plan in 2009 I receive $125, payable at about $10 per month. If it’s my own client, this means I work for less than $15 per year!
I think most carriers were between $200-300 for 2006. You do the math. Can anyone afford to be in the MA market when the commission for 5 years is at most $12 per month?
Having only read this quickly, what jumps out is CMS has no clue what they are doing. It seems they rushed to get something out and it’s all subject to change next year.
WRITE YOU REPRESENTATIVES! The Key contacts on this issue are here…
http://www.mysenioradvisorsgroup.com/misc.html
For 2009 however, renewals seem to be pegged at EXACTLY 50% of 2006 compensation plus inflation. ICEP can be paid at first year rate, every one else will be paid renewal until CMS can inform carriers who was a new enrollee. Carriers must then make the appropriate adjustment. (Maybe by next Christmas)
Also, (my take) beneficiaries can only be paid for the total of 6 years. Changes to new plans are to be paid “for the remainder of the cycle” After that I guess seniors don’t need advice when they get into their 70′s.
CMS said none of this applies to employed agents but would like …”comments on what, if any compensation requirements should apply to employed agents” and request comments on alternatives to this interim ruling for agents/brokers.
Clearly CMS couldn’t find their ass with a map and a flashlight
CMS has managed in their attempts to reduce “churning” and “steering” to actually ENCOURAGE many agents to head in the direction of “steering” clients into Medigap plans that they would have enrolled into MA/MAPD plans in the past. Combining the new regulations concerning commission structures/payments with the MIPPA guidelines concerning marketing practices it really makes supplement plans much more marketable and in-turn actually creates a bias to supplement plans that are not the best product for many Medicare beneficiaries.
What have they accomplished with these new regulations? If you look at the situation now as a Senior or other Medicare Beneficiary they are really faced with having information “screened” and their access to valuable information limited. If I was a Medicare Beneficiary I would be offended!
It has really gotten out of hand. Brokers are actually taking the biggest hit and captive agents (in-house agents) are really not being affected. This will lend to even more issues as the captive agents are forced to focus on one particular plan (or just a couple options) and will provide a bias opinion and “steer” prospects into plans that may not be the best solution for their healthcare needs.
We have people who have “no idea” about the industry setting up policies and regulations to regulate policies and regulations, hiring people to manage the regulations (secret shoppers, etc.), and just flat “screwing up” the whole process.
This is very frustrating and upsetting!
“just my two cents!”
Now, go out and sell twice as much. Were going to have too. Somehow………?
Regulate the plans benefits. Standardize benefits and agents wouldn’t have the need to switch clients every year. I would say the vast majority of agents change their clients from one plan to another to either save them money or offer them greater benefits. I’m sick of seeing the gov’ts take on the plans that they think only offer extra benefits for vision and hearing. These plans are saving seniors significant amounts of money. Craig, I suggest dropping Humana as an FMO. They are the worst of the bunch in all of this mess. CMS is too blind to see a company’s agenda to protect all of their clients after years of bad business decisions.
Unbelievable. There has to be something that can be done to save our commissions. The same insurance companies that have become profitable off of our hard work in the field are now turning their backs on us. How can the government step in and make this kind of decision in one week, when they can’t make a decision on any of the medicare issues all year long?
Craig – Once again thanks so much for caring enough to communicate to all of us out here in the field. I truly appreciate it. Thanks to Jack also for the link to the rule. I will try to review it and digest it and hopefully we’ll see what comes down from the companies now. I wonder if they feel that this is what is fair and how to proceed to stop replacement why the benefits and premiums aren’t also required to be stable, flat or steady for a period of years (5 like comp). Just got to wonder about that among other things. I’m exhausted this past week with just keeping up with all the new and last minute regs and the postal requirements of Sales Appointment Confirmation forms and consider it a shame that this precious time before a very limited AEP isn’t able to be used to benefit the beneficiary more by continuing to study and learn all the plans to the best level that we can to be equipped to answer any questions and concerns that a beneficiary may have in making their choices.