CMS Screws Agents

[allhealthandlife]

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

Lets see if i have this right

1. We get paid half of what we did 2 years ago for a plan thats harder to sell because benefits have been cut.

2. Before we can get in front of client to sell the crappier plan for half the pay we have to get a signed scope letter first and if client wants to " think about it " we have to get another permission slip signed to come back because we are in no way are we supposed to try to do any "selling" and close the deal the first time. We are only there to explain the plan and hope they pick us.

3. While we are there with the client and have warmed them up we are no longer allowed to do the time honored senior health insurance sales tradition of cross selling.A good portion of my income last two years in MA sales.

4. It is now almost impossible to get cultivate new prospects

I believe i am going back to Med Supp sales. Cold Calling ! Cross Selling ! Asking for referrals ! Making the appoinment the same day ! Freedom and more money !

 

[theinuranceguy]

Last Year commission was $400 street with about an $84 renewal.

This year is going to be $200 with a $200 renewal.

Am I missing something here?

I would prefer the low up front commission with higher renewals than high upfront with very little renewal.

And we get paid as earned!

Thats even better, IMHO, There will be NO COMPETITION!

For any agent trying to break into the Medicare Advantage Market it is going to be impossible.

For a veteran agent this has honestly been a gift.

I am actually optimistic about this year.

There will be nobody trying to break into this market, everyone will flock to underage health or final expense.

The door is wide open for veteran MA brokers, and you are the only one walking in.

Good News if you ask me.

 

[allhealthandlife]

Last Year commission was $400 street with about an $84 renewal.

This year is going to be $200 with a $200 renewal.

Am I missing something here?

I would prefer the low up front commission with higher renewals than high upfront with very little renewal.

And we get paid as earned!

Thats even better, IMHO, There will be NO COMPETITION!

For any agent trying to break into the Medicare Advantage Market it is going to be impossible.

For a veteran agent this has honestly been a gift.

I am actually optimistic about this year.

There will be nobody trying to break into this market, everyone will flock to underage health or final expense.

The door is wide open for veteran MA brokers, and you are the only one walking in.

Good News if you ask me.

If MA was a maintence free and high persistency product like Med Supp then i would agree with your logic The momentum of the independent MA agent sales force that has built up over the last two years won't go away overnight. Their will still be plenty of agents looking to poach your business this AEP and OEP. In the long run the quick buck artist won't be a factor but i don't see a long run in MA's future anyway.

 

[midwestbroker]

Before we go all doom and gloom...

When the first news came out changing commissions we were all up in arms and thought it was over...

Then $500 came out and we were all happy.

Now we are back tracking again. The carriers are not going to roll over and take it. Plus, many had back end bonuses that they can include when factoring their 2009 rate.

All we can do is wait and see what is happening...

 

[Joe Moore]

Last Year commission was $400 street with about an $84 renewal.

This year is going to be $200 with a $200 renewal.

Am I missing something here?

I would prefer the low up front commission with higher renewals than high upfront with very little renewal.

And we get paid as earned!

Thats even better, IMHO, There will be NO COMPETITION!

For any agent trying to break into the Medicare Advantage Market it is going to be impossible.

For a veteran agent this has honestly been a gift.

I am actually optimistic about this year.

There will be nobody trying to break into this market, everyone will flock to underage health or final expense.

The door is wide open for veteran MA brokers, and you are the only one walking in.

Good News if you ask me.

Let me make sure I understand what you are saying:

1. Agent commissions 1st year are being cut by around 2/3.

2. Reimbursements to plans are staying the same, adding to bottom lines or more infomercials, still costing taxpayers the same dollars.

3. It seems captive agents have no restrictions on earnings. Probably leading to more captives. Anybody need a job? This will probably pay much better than being independent. The professional agent is basically out, and the rookies manning the phones are in, with no pay restrictions.

4. Renewals are becoming a very important component part of earnings for an agent; but, a lot of renewals will never come due to the ability of the plans to change benefits, pull out of an area, etc.

6. "Earnings" are now not fully earned until a full 12 months.

And this is good news? Not in my estimation.

Deregulation did not work in the banking industry; so, now for the insurance industry we are going to try over-regulation.

Although AIG seems to almost have a lock in the industry for the bailout money, wonder if a coalition of broke insurance agent could qualify? Oh, by the way, a vice-president of one of our final expense carriers informed me last week that AIG's CEO is up for a $43 million bonus for a good performance in negotiating the bailout money.

Instead of being good news, I can sum up my thoughts in one word - Sickening!

I may make your "bad guy" list after disagreeing with you, but it doesn't matter. I feel the professional agent has just been slapped in the face, and kicked in the n_ts. Which I do not agree with.

 

[policy doctor]

Interesting reaction here. Now you folks can relate to us old Med Supp agents who used to earn 40% and more on a med supp sale in days of yore. Where are we now...18% avg?

Same with MA's. A few years back avg commis was in the $200 + range...and as they were bumped up last few years, we got USED to it. Nobody likes to go backwards, and our operating costs have gone up.

Now what? There will be a backlash! Production will drop, and I wouln't be surprised if companies go back to giving out call-in leads because their call centers will be swamped. Oh yes, seniors want to know about these MA's, esp with hard times here and more to come. Those low premiums entice. And the majority are in good health.

So i'm betting we will see some positive change from the FMO's/companies in response to commis cuts.

In the meantime, the underserved Part D crowd can jam their DC leaders phone lines because they didn't get enrolled in time. Now that would get some attention!

 

[Bob_The_Insurance_Guy]

I have to agree with theinsuranceguy. For those professionals, who have sold health insurance in the past, this not a terrible thing.

When you sell a Major Medical Plan (and, that is exactly what MA plans are - Major Medical Plans for Medicare Beneficiaries), you get a low percentage up front, and consistently get the same percentage throughout the contract. Right now, all my major medical business is running around 10 to 15 % a month.

As far as the paperwork, at the risk of being raked over the coals again, it's nothing different than getting an Employee Census or Personal Data Sheet completed, prior to your visit, so you can determine, beforehand, what to present. This will act as a time-saver. I'm sure people were getting upset about agents going through a revolving door, presenting plan after plan after plan, which only confused the prospective client.

Being in the health insurance business for 11 years, I had a feeling the commission rates were going to be this low. That's actually the norm for health coverage. And, yes, it is a very labor intensive product. That's not news.

Let me just say, again: I don't like being over-regulated. I don't like CMS. I do believe both Med Supps and Medicare Advantage Plans are viable products. I do believe competition is healthy, and we will see Med Supp products change, for the betterment of the Medicare Beneficiary, because of it.

Theinsuranceguy was right. Eliminating these high, annualized, up-front commissions, will get rid of the stick-em-and-bleed, used to sell Real Estate, Melaluca, Herbalife, non-health licensed agents, and will leave it to the professionals, who also provide Life, DI, Annuities, Long Term Care, etc.

As for the follow up and continuing assistance you give these folks, THAT'S PART OF IT. THAT'S WHERE YOU GET REFERRALS FOR OTHER BUSINESS.

But, I have to remember: I don't work for a living, and sit on a throne (right, Scottfree).

It is what it is. You can:

1. leave the business
2. gripe about it
3. move on - sell the products, along with your other lines

Again, I urge you to instruct your clients to complain to CMS, just as they did about the unprofessional practices the last two years, about how kooky this whole process is. If they do, CMS will listen.

I am now going to tell my clients/prospect how much I'm making and why CMS set the amounts so low. I will also have CMS's contact information for the beneficiary to write them to complain about it. They gave us ammunition to use against them. Let's do it.

For those of you who are running 6 - 7 appointments a day, bless you, and I hope you have enough time management skills to do this properly.

BTW, I forwarded a copy of the regulation to all that are sending me referrals, so they know as well.

 

[GreenSky]

Last Year commission was $400 street with about an $84 renewal.

This year is going to be $200 with a $200 renewal.

Am I missing something here?

I would prefer the low up front commission with higher renewals than high upfront with very little renewal.

And we get paid as earned!

Thats even better, IMHO, There will be NO COMPETITION!

For any agent trying to break into the Medicare Advantage Market it is going to be impossible.

For a veteran agent this has honestly been a gift.

I am actually optimistic about this year.

There will be nobody trying to break into this market, everyone will flock to underage health or final expense.

The door is wide open for veteran MA brokers, and you are the only one walking in.

Good News if you ask me.

You have it all wrong.

If a plan pays $200 1st year, the renewal will be $100. If you move someone to another plan, by definition you only get the renewal of $100.

If a plan paid $250 in 20006, then you will only get a $125 renewal.

I don't see plans paying us $200 renewal - I believe it will be no more than about $150. There is no financial incentive to help my current customers find a better plan because I already am making about $100-125 renewal. I am happy to help people but I have to pay my mortgage like everyone else.

I have about 400 PDP only clients. I would spend time with each of them finding the best plans and if warranted, at least got paid $50-100 for my time if a change was warranted. Now I'll get about $15? I already get $8 so how can I eat on $7 (spread out over 12 months)?

Anyone that can see a silver lining in this must be taking drugs and if that's the case, send me some.

By the way, the FMO's are screwed even more than agents.

Rick

 

[policy doctor]

Oh boy, Rick....I can see this has kept you insomniac. Up this early to post. But we have stated over a year ago now that we agents are being used until they don't need us. Seems like day of reckoning is inching closer.

Just happy this is not my only focus.

 

[midwestbroker]

I can see where CMS is coming from...

In Kansas City, MO there are 8 carriers. Why would anyone want to talk to an insurance broker that has multiple plans to offer? Why not just talk to one captive agent that will tell you why their plan is better then all the rest?

Personally, when I have a lot of options, I would much rather talk to one person who can only sell one product. And that person has sales quotas to fill, so there will be added pressure for me to enroll in that plan. And even though their competitor has the better plan, I know that my marketpoint agent will have my pocketbook...er...I mean best interest in mind.

#2 rated MA plan, one of the highest priced Final Expense plans, a mid stream priced supplement, and no training on any other products but they are expected to sell them.

Go CMS Go!