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.
Can’t anyone see that Medicare hates the Medicare Advantage plans because they will eventually reduce the size of Medicare. If many retirees have MA and MAPD then there will be less need for billing clerks in Medicare. Less need for billing clerks, less need for managers and buildings. Less need for managers and buildings, less need for senior management and lower pay all around as the size of the Medicare juggernaut decreases. The fact that Medicare is policing the MA industry so tightly is to give the perception that it is greatly needed to keep the importance of Medicare. The truth is that with MA, the less important Medicare is. By making the rules stringent, the payouts strung out is an attempt to get agents to discontinue offering it. Medicare is not finished regulating MA. They will regulate it out of existence to protect their “turf”. Given how difficult and costly it is to comply with the rules now, I would gladly like to see it disappear. Selling MedSup is so much easier and more lucrative. Average MedSup 4 me is $1800 over 6 yrs with the PDP. For MA it’s now averaging just over $1400 for the same timeframe. Plus, MedSup goes up in price every year, so new enrollees or switchers mean higher comissions every year (built in raise). If NAHU had any balls or the State’s, they’d sue Medicare for meddling in the commission structures. What is this anyway? A Socialist State? If the companies wanted to pay higher commissions, why is Medicare giving a damn? Since when is free enterprise a 4 letter word? I know Medicare is a socialistic benefit, but that does not mean that we need to turn everything about it into Socialism…(P.S. Obama will never get a health care plan passed – TOO EXPENSIVE – just to help 65+ Seniors it would cost at least $200 billion per year excluding Prescriptions.).
Tony,
Is the PA Advantra $450 and $225 for the CCP Integrated with RX? or just on the PFFS(without RX)?
PA advantra is 450 and 225
The issue here is not commissions.
It is benefits.
If the replacing coverage provides better benefits, the agent shoulc get paid full commissions.
If the replacing coverage does not provide better benefits, the agent should be paid NO commissions.
And what about commissions when a MA plan is being replaced because it no longer exists in that region and the client is losing coverage? Shouldn’t that be the same as a “new” case or an original Medicare replacement case?
And always check grammar and spelling before you hit submit.
What a joke, no one can create a business and earn a living at $200-$225. CMS/Gov’t has created a program that is complicated and confusing and then an environment in which the beneficiaries of this program can’t get advice.
This is disgusting and everyone who reads this blog and is concerned should do more than merely post comments here.
I continue and will continue write letter and post on blogs all over the internet. I recently started sending e-mails and letters to editors of newspaper, magazine and online publications. I hope others are doing SOMETHING. Rants on this page are like a preacher to the congregation.
My latest version of postings I’m copiing to other sites, blogs, and traditional periodical websites can be found here…
http://medicareadvantageplan.blogspot.com/
Please feel free to take any part or all of these, modified or as is and post them on blogs everywhere. Especially newspaper sites around the country. In may take a couple minutes to register but every virus has to start somewhere. I’ve posted about 10 places and will continue to post to any article about Medicare that I can find.
The issue is not our pay, its advice that will evaporate for seniors in 2009.
Joe B
If CMS is stating what commissions will be, what do the various states have to do with anything regarding commission? Sounds like gobbledigook to me.
Rick,
You are right. 151A will take Indexed Annuities away from us also. How can the SEC get control of the only safe haven that seniors have had. I got over 100 Indexed Annuity customers that have not lost a penny and alot of them have called me thanking me for moving their hard earned life savings out of brokerage accounts which they would have had half the value of. Nothing makes sense anymore. Just sell more life, hospital indemnity, annuities(while you still can) and anything else to make the difference. Keep the faith.
I find it amazing that CMS just adds bad rules on top of bad rules.
All these idiots needed to do is get rid of lock-in and have the carriers pay as-earned.
Instead they pile up more regulations to correct the crappy decisions they have already made.
The amount of commission is not the issue here. It’s the fact that our socialist nanny state government (I’m holding back) has their hands not only in my pocket for taxes, but for the amount I can earn.
The “good” news is that all this will be moot within a couple of years when ObamaCare takes care of all of us and agents will no longer be needed.
Rick