CMS Screws Agents

[scottfree]

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.

Bob, I am not sure where you are coming from in your comment to me.

The thing about all this is that the insurance companies get $700 a month or more per person on these plans. The captive agents are getting (Humana) almost $30k a year plus benefits and $180 an app commission. They get leads, office space laptops, trips on top of the salary.

I and you as an independent agent are now going to get maybe $150 a month for helping someone that is on a crappy (Humana) plan with no other perks. The insurance companies are making out like bandits. $8400 (about) paid a year for each client and they will only have to pay less than a 2% commission to us.

I find it hard to believe that anyone other than stockholders or agents of captive companies see any good out of this situation.

For the past 2 months, I have been going to training, taking tests and even paying for one only to have the rug pulled out from under my feet 4 days before the AEP starts. All with no pay.

You can say I am gripping or whatever you want but I do this 6 months of the year and work very hard to help my clients. To call this gripping and telling me to just move on when I have been gearing up for this time for over 2 months is something that I can't do. There are a lot of people that depend on me to help them understand all the mailings and tv ads thrown at them this time of the year and now I am commited to this and have to work thru the holidays just to try and make ends meet.

Sure glad that you can feel the pain that we, I am feeling and that you are happy that the large companies are now having champagne this morning at our expence. O'Tool from Humana will probably get a 20 million dollar bonus for his letter to Baucus for getting this pushed through. Baucus probably will also get a nice contribution to his next election run.

So much for the little guy!

Scott

 

[Bob_The_Insurance_Guy]

Insurance companies make huge profits on all of their products. Do you think these huge profits only appear when they make a Medicare sale?

For every Assurant health individual plan I sell, I make 11% commission. Where do you think the other 89% goes? Research and Development? Local charities?

As for the sitting on my throne comment, that is how you responded to me, in another forum, when I mentioned how I liked the SAC form (and, as an insurance agent, who likes paperwork to back up my side of the story, I still do).

If you want to make larger commissions while doing less maintenance work, then sell Life, DI, or Long Term Care.

Health Insurance is a totally different ballgame.

I have never doubted the amount of preparation and work you've put into this. And, as my previous post stated, I do appreciate you for contacting that many people per day, and with this ridiculous process put in place, hope you can still do it. It wasn't a cut, it was a pat on the back.

Sorry if it was misconstrued.

These over-regulations will eliminate those who enter the profession from November through January, hit and run, don't follow up, lie, cheat, misrepresent, twist arms, and don't care.

What should have been put in place in the beginning was that you, as an agent (not you, specifically, but the general "you") needs to already have a Life and A&S license, have your own E&O coverage, with at least six months left on it, and have sold a certain number of Individual/Family Plans for that year.

That was their first mistake.

Good luck to you.

 

[GreenSky]

For every Assurant health individual plan I sell, I make 11% commission. Where do you think the other 89% goes? Research and

Let's see how that would translate to MA plans.

11% of the monthly average premium would be a commission of $99 per month, or $1,188 per year. I can live with a renewal of 50% of that amount.

What CMS is "offering" us is about a 2% commission for new business and if we help someone change plans, we get 1%.

By the way, I was the one who indicated you were on a throne so give credit where it is due. Perhaps when you digest all this, you will change your tune. Right now I think you're in denial.

Rick

 

[theinuranceguy]

Oh will everyone just stop whining! And NO, nobody is going on my bad list for disagreeing. That is reserved for the real bad guys, not the semi bad ones, lol jk

Bottom line... if I get paid $100 per app this year, Ill be out of business no doubt. But I would be more than happy to take $200 over the next 5 years.

I cant see only getting paid $100... 3 months ago everyone was griping about commissions too, then we were excited when the new comp came out.

Remember people. Secure Horizons was paying $400 ($500+ in CA) street, plus $200 bonus (if you did enough volume).

Thats $600 to throw into the average.

What I am saying is that I would rather take $200 over 5 years than $400 over one year with no renewal.

I got in this business to build residual income, not to always be looking for the next sale. For me, this has been a gift.

Cash flow is not the problem for me, my annual income is all that matters, and with $200 per app over 5 years, ya I take a cut in pay the first year, but by year three Ill make more money than I have before.

Who cares what CEO's are making, who cares about insurance companies bottom lines... Im worried about me, and for me, Im happy with the new pay, im actually EXCITED.

Everyone here has complained about high up front commissions, complained about fly by night agents, complained about no renewel. Then we get it fixed and everyone is pissed off.

Well, go sell some damn final expense and give me your clients, Ill be more than happy to service your book for $1000 over 5 years.

And before anyone jumps on my ass again, WE DONT KNOW exactly what commissions will be. If its $100 we are ALL out of business, but if its $200 you can make it.

Sure it will be tough, nobody will make the same they made last year, but those who stuck it out will be rewarded greatly in year 3.

If your too impatient to wait that long, then sell something else, whats the big deal.

 

[Non-golfing Agent]

You're assuming the plan you have them in will be competitive in 3 years.

 

[policy doctor]

First: As schizoid as CMS is, we have no guarantee that this commission structure won't be tampered with later.

Second: I have not seen my renewals build up but fall because of the volatility in the Med Supp/MA market.

Third: Costs of doing business are going higher including the stress on agents.

 

[Bob_The_Insurance_Guy]

I have digested all this.

Denial, no.

Acceptance, yes.

A product that has one health question, is easy to understand, and is wanted by 75% of our population, is a product I can sell. It's not like explaining the ins and outs of a VUL, or a SEP, or a 529 Plan.

It's pay as you go health coverage, just like they had when they had group coverage at work. You're with them for 45 minutes.

$100 for 45 minutes. My shrink would love to make that.

Denial?

Reality.

Now, if you have trouble explaining simple major medical coverage in an hour or less, then you might want to reconsider.

LTC Partnership Plans are more confusing.

Disability Own Occ Plans are more confusing.

Auto insurance is more confusing.

Like I said, if you are a health insurance agent, then this is a no-brainer. If it's not to your liking, then no one is stopping you from concentrating your efforts elsewhere.

My apologies to Scottfree.

 

[GreenSky]

Oh will everyone just stop whining! And NO, nobody is goingRemember people. Secure Horizons was paying $400 ($500+ in CA) street, plus $200 bonus (if you did enough volume).

Thats $600 to throw into the average.

What I am saying is that I would rather take $200 over 5 years than $400 over one year with no renewal.

That's NOT what was paid in 2006. Street in CA was $250. It's that amount that will be the basis for new business in 2009. Bonus do not count according to CMS.

How much hummus can you buy for the $125 you'll get paid?

Rick

 

[scottfree]

Let's see how that would translate to MA plans.

11% of the monthly average premium would be a commission of $99 per month, or $1,188 per year. I can live with a renewal of 50% of that amount.

What CMS is "offering" us is about a 2% commission for new business and if we help someone change plans, we get 1%.

Rick

Exactly!

The idea of getting just the renewal first year is wrong also. Like we have been saying, it takes as much time to go over the options and explain how this all works everytime you meet with someone. Especially when the last agent they talked to had know idea of what they were talking about. CMS saying that people already know how these plans work is just plain stupid. Like I said in another post there are PPO, HMO, MSA and SNP plans that may need to explained and the way PFFS plans are going away in 2011 we will need to help clients choose which is best for them then also.

O course all this may change when Obama gets in next year and who knows what will happen then.

Just frustrated!

 

[GreenSky]

$100 for 45 minutes. My shrink would love to make that.

This would be great if all of us had people calling us like they do you. While I know you do work hard at what you do, you don't actually market MA plans and have no expense for them. By your own admission, your family refers these people to you.

I'd be happy to be paid $100 for new enrollments if they were lining up to meet me. But unfortuntately, I'm not so lucky.

I already get about $100 for my current clients, how much time can I afford to search all the plans to see if a change is warranted? While I do want to help "my" people, I still have to pay my bills.

Rick