CMS Screws Agents

[GreenSky]

Here's the final ruling. Looks like I'm pretty much out of business. (The link to the 45 page document is on Craig Ritter's blog, www.ritterim.com).

CMS Issues Interim Final Rule on Brokers Commissions « Ritter Insurance Marketing

CMS Issues Interim Final Rule on Brokers Commissions

November 10, 2008 by Craig


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 . . .

Sorry to be the bearer of news even worse than I expected.

Rick

 

[senior-advisor-indiana]

Thanks for ruining my evening Rick...bastard!

 

[GreenSky]

Thanks for ruining my evening Rick...bastard!

Your evening was ruined when you decided to get married and have a family.

Rick

 

[senior-advisor-indiana]

NO that ruined my 2006.

Good night. I am going to wake up tomorrow hoping this was all a dream.

 

[myinsurebiz]

Ha!

Just the reasons I bailed on this market.

Good luck to all that suffer . . . May your pain be brief . . .

Tom

 

[scottfree]

Unfrickin believable!

Just shoot me!

Please!

 

[GreenSky]

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. 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?

Rick

 

[Slim]

Leave it to the government to fix everything and this is what we get.

 

[scottfree]

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. 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?

Rick

I just love this line...

For the remainder of
2009, this interim final rule requires that organizations
pay agents and brokers an initial compensation when a
CMS-4138-IFC2 16
beneficiary enrolls in an MA plan during the beneficiary's
Initial Coverage Election Period (ICEP) or in a PDP during
the Initial Enrollment Period (IEP). This approach enables
organizations to compensate agents and brokers for the
additional work involved in explaining all of the attributes
of an MA plan (and the Part C program generally) or a PDP
(and the Part D program generally) to a beneficiary who has
had no prior experience with Part C or Part D, while at the
same time reducing the financial incentive for moving a
beneficiary who is in a renewal cycle (and is thus already
familiar with these types of products) to a new plan that​

may be contrary to his or her health care needs.


Basically I guess we just have to spend a couple of minutes to explain the changes, what may be their best choice for the coming year since the seniors already know all about these plans. 15 minutes tops! Right?

O what about all the service calls

And the time to get the scope of appointment

And the time to figure what the best drug plan would be good for them

What about if they want to look at a PPO

Or and HMO

O yeah there is also the MSA a accouts

OOOOOOOOO... I know the answer!!!

STUPID ME!

JUST ENROLL THEM IN HUMANA!

Thats the answer!

It's not MEDicare .... It's HUMicare!

Give me a &**&^%! break!

Scott

 

[Slim]

Do they just want to have the Companies take care of enrolling all the new MA enrollees via telephone enrollment?

I think I read some agents will focus only on Med Supp from now on . It appears the Gov't doesn't really want to use the agent working face to face with the client.

They want to turn over the Medicare problem of insuring beneficiaries to Insurance Companies . And when Agents / marketers do their job then the Government has to tell them & the Companies more about how to do their job.