Ritter Insurance Marketing, Craig Ritter

CMS begins Approving 2009 Medicare Advantage Commissions (Updated, Maybe Final?)

Thanks to everyone for the comments!  I hope everyone had a great year in 2008 and that you enjoy the Holiday Season!  I’ll be celebrating Christmas with my family here in Harrisburg and then traveling to Atlanta to spend time with my wife’s family.  I’ll be back in after the first of the year.

Regarding the CMS guidance on commissions, here is what I know:  Nationally (with the exception states below), the maximum commission a health plan can pay a writing agent is $200 when replacing another Medicare Advantage plan.  If you are replacing “Original Medicare”, then the maximum is $200 which will be paid initially and another $200 when CMS notifies the health plan that they are allowed to release the other $200 ($400 total and we’re guessing it will take 3-6 months for CMS to do this).

There are 4 states plus the District of Columbia which are slightly higher (I don’t have information on any others at this point):

  • The following states allow $225 for replacing Medicare Advantage and an additional $225 for replacing Original Medicare (or for those new to Medicare):
    • Pennsylvania
    • New Jersey
    • Connecticut
    • District of Columbia
  • The following state allows $250 for replacing Medicare Advantage and an additional $250 for replacing Original Medicare (or for those new to Medicare).
    • California
  • All other states will be $400/$200

From what I’ve seen thus far, the companies who have commissions in excess of the above commissions will have to reduce their commissions to the maximum.  This will be retroactive to cover ALL 1/1/09 applications written.  I don’t believe those companies who are BELOW the maximum will be allowed to raise their commissions, at least I haven’t seen any plan successfully do it.

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