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.
Teresa,
I am very much in agreement with you. We need to make this newsworthy. If the independent agents are forced out of the market, who will replace the service we offer to seniors? I will try to make as much noise in my marketplace as possible to make it newsworthy as I can, but before anyone starts, I think we should have an action plan, with similar content going to the news outlets in each of our marketing areas nationwide. We need one general message that we need to send to congress. Any ideas on how to get everyone on the same bandwagon?
Well we are all angry and upset now. However the real question is ” what do we do”? How do all the independent agents band together to voice our disapproval and have our voice heard in congress. It seems that all these regulations are aimed at the agent. The insurance companies have not had the amounts paid to them lowered. CMS has decided that we are overpaid, but there has to be a way to challenge their decision. It also seems grossly unfair that CMS mandates enrollment dates, has timelines and deadlines, but does not have to adhere to their own rules. In what other industry would you prepare all year for a 6 week selling season, only to be told what your compensation will be after 5 weeks? The workload has increased, the rules and regulations increased as well as threats of fines for non complience. There needs to be some equation to compensate amount of time in training, licensing, marketing and finally finding the proper plan for the client. If anyone has an idea to get us all together and fight this as one, please lets hear it.
Now that would be a twist I haven’t thought of, waiting for any comps to issue until CMS decides if they are new or not. Perhaps they are now thinking they have to wait pass the rapid disenrollment period. Maybe we’ll see comps in the Spring.
This is what I am ASSUMING (we all know what that does). I am assuming that they backed out the clean app fees that they paid to adjust their commission system to properly reflect what has been approved by CMS. It also reflects that they have done this in app tracker.
I then assume that they processed renewal comps on all enrollments that are active (Coventry has traditionally been an agent friendly company) and that if they did it on the 31st as ADVERTISED that they will hit the banks on Monday? Thursday was a bank holiday and Saturday and Sunday are not normal banking days so Direct Deposits should take 2 days to process through to most banks, maybe a day more for Credit Unions.
The thing I don’t know is did CMS come in and do another last minute change. Or are they paying renewals monthly as that’s the way renewals were paid by most companies in the past. I am assuming since they ADVERTISED largest commission run in their history that they are advancing it. I gotta tell you I’m a little sick and tired of not knowing the answers to questions that really aren’t that complicated. I sure hope that somehow at the end of the day that this makes some kind of sense. I can’t believe in a professional career that we don’t know what we are making yet after working the AEP season. It would be different if they were deciding on next year’s comps, but they’re not they are deciding on current comps. Also, I agree with Teresa that in today’s world these policies are helping so many medicare beneficiaries.
Does anyone know what is going on with Coventry. They sent out emails to everyone saying the largest payout in commissions in the history of Coventry is going out today.(Wednesday 12/31/08.) I called to see what mine would be because I have 20 that went active and they said they are charging back all commissions. They said interim commission payment was made to help us over the holiday but now all commission sent out (the interim payment) is being charged back. Once CMS decides if we are to get a $200 payment or a 400 payment then we will get paid.
Has anyone else been told this?
Medicare advantage plans are very much needed in this enviroment. So many companies are saying supps are much easier to sell but I say NO NO NO they are not. In todays economy money is very tight. Food and utilities are at a all time high. People cannot afford a secondary insurance that is going to raise every year. These PFFS plans are the best thing I have ever seen to really help the senior. Aetna has a Medicare Advantage plan that is $95 a month that offers all $0 co-pay and no health questions except renal failure. I never plan to sell another supp because there is no need for them anymore. I have replaced a few of them. I actually do not meet many people with them anymore, they are just to high.
As far as commissions with the CMS ruling, we can FIGHT THIS. I am trying to see how we can start a petition to reverse or modify this CMS ruling. It is unfair and CMS did not hear the side of the indpendent agent. Thousands of agents literally have lost half their income. This IS A NEWSWORTHY STORY THAT SHOULD BE ON NBC, CBS. The news always talk about how the economy is effecting jobs. Well this decision by CMS will effect thousands of people.
AGENTS this is our career, not a side job for extra money. Surely between us all we can banned toghter and fight this. One thing we can start doing is send comments to CMS regarding this ruling.
This was a decisionsquicly enacted upon without much researching being done. We can complain to each other and take what CMS has dished out or we can fight it.
Mike – That’s a good question also. My guess is that it is anyone new to Medicare Advantage whether it’s their ICEP and/or their first time in a Med Advantage from Original Medicare and/or a Med Supp at any age from what I have read previously (NOTE: I tend to be a Polyanna and always try to think the best) but you know nothing will shock me anymore. I guess at this point, good news would be shocking
LOL 
Also, does anyone know if the renewal rate that is being paid on business from one MA company to another is being paid in advance or if it will be monthly? How can it take this long for final approval, and still no answers to the many simple questions that are out there from the agents that are affected? It just seems like it’s radar silence everywhere. The few communications received to date are sketchy with very limited info. I’d appreciate any info that anyone can impart… Thanks!
Does anyhow know if CMS will be paying the “Intial commission rate” on everyone that is coming from Original Medicare regardless of when that person became effective for Medicare? I read from one of the Advantage companies(WELLCARE) that the initial rate would only be paid on medicare beneficiaries that are in their IEP, that is 3 months prior or 3 months after they enrolled in Part B. I can’t seem to get any clarification on this. I am sure I am not the only one who has several clients that have been on medicare disability for years and who I put on an Advantage plan. Any time frame on when CMS will pay the difference between the Initial rate and the renewal rate to the agents?
Happy New Year everyone. I am looking forward to a small break with family and friends and am wishing everyone a GREAT NEW YEAR filled with lots of referred business and company supplied leads.
Perhaps when the New Year rolls around we’ll have final approved comps forthcoming. Long live the Independent Agent… Just know that your clients appreciate you for all your hard work…
I will find some way to make a living “selling insurance”, enrolling individuals in these government plans has become disheartening and more of a pain in buttox than it’s worth. CMS would screw up a one car funeral. If they do not want individuals to switch insurances, then make them offer the same benefits for close to the same premiums.