It Does Not Look Good for Agents Selling Medicare Supplements.

[MedSuppPro]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

Frank,

All one has to do is to go back and read the The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) and then ask yourself; Did CMS Medicare read into (interpret) agent commissions and invented such things as SCOPE forms and Secret Shoppers.

The answer is HELL YES!!!​

​

 

[Frank Stastny]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

Guys, I have made my position clear. I made several phone calls this morning and I am comfortable I spoke to informed people and the information I have received is accurate.

If I am wrong I will be the first to say so and all of you can say "I told you so", if I am wrong that is.

I'm not simply guessing or making those statements just to get "beat up on". I knew that this was going to happen, in retrospect I guess I should have let the rumors run rampant.

I just think it is very irresponsible to make statements that commissions are going to drop to 3% - 5% with no concrete proof. Someone's WAG does not constitute "concrete proof".

One out of every three car accidents are caused by someone who has been drinking. I can use that information to show you that you are safer driving drunk than you are driving sober. Because, two out of every three accidents are caused by people who are sober.

My point is that anyone can take any information, put a twist on it, and use it to support their argument. Anyone, show me where it specifically says Med Supps are going to take a hit on commissions. I have been assured that Med Supps are not going to be effected thus no impact on commissions.

 

[DS4]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

Was told that when all is said and done, Medicare Supplement commissions will be 3% to 5%.at most.

I sold med supps before standardization in the early 90's.
In California, United American and Pioneer life controlled the med sup market. 60% to 70% 1st year commissions!
I long for the good ole days.....

 

[jamesflou]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

I agree with Frank. They are not subsidized like the MA plans and there fore the insurance companies will pay the commission based on the premium payed and not the subsidy they received from the government. I can only see changes here of a few % points.

 

[retread]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

I agree with Frank. They are not subsidized like the MA plans and there fore the insurance companies will pay the commission based on the premium payed and not the subsidy they received from the government. I can only see changes here of a few % points.

You have a good point. If, for example, (small for example's sake) a company needs $1,000,000 (on about 800+ clients) to make a profit at $1200AP per client and pays 10% commission to the agent while returning 65% (if that is the current MLR), that would equate to about $350,000 (gross) profit.

All other things being equal, and the MLR is raised to 80%, then they will have to raise the premium and/or lower the agent commission. At 80% MLR for those same 800 clients, they will need about $1.75mil in sales, which means raising the AP to roughly $2150 to preserve their revenue requirements. IF the agent commission stays at 10%, the agent would gain significantly with this scenario (higher premium, higher pay), but we all know that won't happen.... especially if you think people will sit back and take a 180% rate hike. I have to agree that commissions will have to come down to about the 5% level and production will have to go up to keep the rate increases tolerable. This may mean production quota just to get that 5%!

(My math is rounded a little bit, so don't try to beat me up with a calculator....)

The big unknown in the above case is the current MLR being 65%. If it is closer to 85%, then I think things won't change much from our current situation.

 

[MrMack]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

Will medicare supplements go to all guaranteed issue in all states? That would change things if their were no health questions asked.

 

[Superchief]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

Jack, I'm not busting your ass, honest.

Medicare Supplement policies are not included because they are unique unto themselves and do not fall under the definition of private health plans. The verbiage does not specifically exclude Med Supps because they are not included in the definition of private health plans therefore there is no reason to specifically state that they are excluded.

You speak the truth my friend.

 

[Jack C...]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

Ive seen medsupps referred to as "Private Insurance Policies"

Straight from CMS website...
"A Medigap policy is health insurance sold by private insurance companies to fill the "gaps" in Original Medicare Plan coverage."

100 % correct.


Once again, I am not trying to scare anyone, and I dont sell life insurance. I sell Medicare Supplements, and love what I do. I hope this Bill does not apply to Medicare Supplement Insurance, but what I hope, and what is written in the Bill are 2 different things . As the writer above wrote, and quoted straight from the CMS Website that even CMS classifies Medicare Supplement Insurance as "private health insurance". You can also contact you State Department of Insurance, and ask them what classification does medicare Supplements fall into ? and you will be told "Health Insurance". And unless specifically exempted from the Bill, Medicare Supplement Insurance at this point, must abide to the new Law, within the time line set out by the law. And the Law says that all private Health Insurance plans must pay 80 to 85% of it collected premium straight back to medical services, and nothing else, that leaves only 20% to 15% percent for the Insurance company to keep, and pay its Bills, including Agents commissions. So if you think you will continue to get 18 % to 22 % commission, when the Insurance Company wont even be getting that much, then your head is in the sand.

The last person you should believe, is someone in your up line, that makes an override from you, as it would be in that persons best interest for you not to believe me, and to continue to make money off of you right up until the day the ship has sunk.

CMS classifies Medicare Supplement insurance as "private health Insurance"

State Insurance Boards classifies Medicare Supplement insurance as "private health Insurance"

Frank says medicare Supplements are not "private Health Insurance"..

Who do you believe ?

 

[MedSuppPro]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

...then your head is in the sand.

The last person you should believe, is someone in your up line, that makes an override from you, as it would be in that persons best interest for you not to believe me, and to continue to make money off of you right up until the day the ship has sunk.

At this point in time, FMO's are endangered. If the total sales comp is 5% to 10% then the carriers in this modern high tech age will deal direct with the street agent. Sorry FMO's, but, lets get real!

Frank, please except my apology in advance, if your offended. But, what a weak mumbo jumbo argument: Medicare Supplement policies are not included because they are unique unto themselves and do not fall under the definition of private health plans. The verbiage does not specifically exclude Med Supps because they are not included in the definition of private health plans therefore there is no reason to specifically state that they are excluded. "Unique unto themselves"? "Not... private health plans"? "...does not specifically exclude... therefore... they are excluded"

Sure the Rules & Regulations have yet be promulgated by CMS. What I see is MedSupp GI, MLR @ 80%, and no strong argument against MedSupps being Health Insurance Plans and included in the power grab. No way you can convince me that CMS would not grab the MedSupp portion as well. No way!!! This is not about protecting insurance company's, agent's, nor FMO's profits. This is about offering the MedSupp consumer a better deal. No way this gets excluded or overlooked. No way!!!

I wish we could all wake up tomorrow and find this to be a dream. But, JackC is spot on. And yes we need to continue this conversation...

 

[captain94]

Re: It Does Not Look Good for Agents Selling Medicare Supplements

I found this article that states the new "Medical Loss Ratio" goes into effect 2011 and ends 2013 when the exchanged is opened. Its a interesting point.

Wonk Room Does A Higher Medical-Loss Ratio Reduce Insurer Profits?