Part C &D Levelized Commissions?

[Winter_123]

EXCATLEY!!! Well said... The agent is the "whipping boy" The drug plan, PFFS was rushed to the market, and they let the agent do the dirty work of trying to explain this flawed creation to Seniors.

From what I understand these same types of problems they are having with PFFS plans (nobody truly understands their benefits) is the same reason they Standardized Medicare Supplements?

Indeed that is all true. It's nice for the feds and TV investigators to keep up the constant drumbeat about sales rep fraud and misrpesentation. I dont have any problem with that. The problem is though that CMS and others explain away too many problems that are inherent in their program design (or plan designs that they approve). The complexities and variables are often way beyond what the elderly can understand or absorb (even when accompanied by their younger relatives), and when they do feel like they have understood it, all too often it is because someone has simplified it too much for them to keep their head from spinning in areas that really should be looked at.

It would be interesting to see a study or an investigation sometime where some TV program or CMS selects what they consider to be competent agents and monitors their presentations to assure that they are compliant and include all of the basics that everyone agrees in advance should be covered. Then two months later, send an interview/investigation team by to see the clients and ask them if this or that was explained to them and ask them to describe their plan and what they have- if you see my point. Trusting the agent is not the same as understanding the plan.

Your example about the introduction of Part D is also right to the point. The forced timetable and complexity of the plans were far, far beyond what seniors could handle without going into a tailspin and even the best of agents could chug away with explanation and disclosure and if you followed up with many of the seniors later they would just say that were confused. Again, in many instances it was all clear to them, but only because they did not look at factors that they ran into later down the road and that is not good either. CMS tried to make it look like most of the problems were related to agents. The same thing with MA's. The real problem is that agents are often trying to make chickensoup out of their chickenshit.

Winter

 

[MedSuppPro]

It was proposed; now it's law.

Rick

I went to the law (final version) H.R. 6331 (ENR) Medicare Improvements for Patients and Providers Act of 2008 (Enrolled as Agreed to or Passed by Both House and Senate)(110)

I paged down to Section 103 and I could only find:

[FONT=&quot]`(D) COMPENSATION- The use of compensation other than as provided under guidelines established by the Secretary. Such guidelines shall ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs.[/FONT]
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So, my FMO that informed me this week that nothing has been finalized by CMS and that this is most likely going into effect for plan year 2010 may have the correct answer.

Look, I don't pretend to have all the answers here. Some carriers (i.e. Pyramid) are claiming to have a different read on this.

IMHO: This is in the hands of CMS and they will make the rule change, if any, towards a more levelized commission structure. Go ahead and educate me if you have something that is different.

 

[retread]

So, my FMO that informed me this week that nothing has been finalized by CMS and that this is most likely going into effect for plan year 2010 may have the correct answer.

Look, I don't pretend to have all the answers here. Some carriers (i.e. Pyramid) are claiming to have a different read on this.

IMHO: This is in the hands of CMS and they will make the rule change, if any, towards a more levelized commission structure. Go ahead and educate me if you have something that is different.

Yes... I went to the annual re-certification for Pyramid last week and they presented the "levelized commissions" as a done deal. They did talk about a number of other proposals that have not been set yet.

Be that as it may, they did say that whatever "levelized commissions" meant was a little loose, and subject to interpretation. One would speculate that it meant FYC similar to MedSups and renewals equal to FYC. (No talk about "as earned").

The bigger issues discussed were state appointments, no cold calling, no enrollment at educational events, no more free meals, no cross-selling, and a 48 hour cooling off period.

My biggest concern is the "no cold calling" issue. It seems that the Telemarketing lobby is petitioning for an exception, and if granted will force us to buy their services while forbidding us to call on our own behalf. This is where the rubber meets the road, folks!

 

[Kimber]

It sounds like none (paying $800), at least I hope not. The larger pay plans have set up a lot of the issues that are happening with people being enrolled in what is best for the agent, not them. Not implying that you have this issue Hwmassoc, but unfortunately a lot of others do.)

Rick, do you have anything about the commission levelization that you could email me? [email protected]
Thanks!

 

[GreenSky]

Rick, do you have anything about the commission levelization that you could email me? [email protected]
Thanks!

It was part of the proposed rule changes from CMS in June. The bill included a statement about adopting the changes.

I don't know if it will affect existing business (I'm hoping it does) and what the actual commissions will be.

Rick

 

[MedSuppPro]

It sounds like Today's Options (Pyramid) would like to levelize. Who's best interest are they looking out for?

Why would CMS read into a vaguely written law that hints at changing the commission structure? Who does CMS get their marching orders from -- Congress or the President? I'll place my bet on no change for 2009.

​

 

[hwmassoc]

It sounds like none (paying $800), at least I hope not. The larger pay plans have set up a lot of the issues that are happening with people being enrolled in what is best for the agent, not them. Not implying that you have this issue Hwmassoc, but unfortunately a lot of others do.)

Rick, do you have anything about the commission levelization that you could email me? [email protected]
Thanks!

Actually there are a number of Coordinated Care Plans in Florida paying $700 per enrollment and that is a GA level with no production requirements.

The $800 levels are for a few service areas and does not include monthly residuals starting in the 4th month of active enrollment.

 

[theinuranceguy]

There is a dual SNP plan in TX paying $1000 as the MGA.

 

[patch36]

I welcome level pay. I also know that some of the marketing organizations will find a way around it with advances, draws against commissions, ect so they can keep their seasonal predators interested. CMS can keep making rules but the aggressive marketers will wink and nod to their agents and send them out in droves to stretch, break and reinvent the rules so they can fill their pockets.

Setting payment schedules that encourage continuity and loyalty will help, but it will not make a predatory and dishonest agent or marketing group something it is not. We are selling to a market that wants to trust their agent, but that trust has been violated over and over again because of the money involved. Level pay, if done correctly will help move the fast buck agents to other endeavors.

PFFS plans are great where the only other solutions are expensive Med Sups. They have been a good thing for those on limited budgets with reasonably good health. I prefer to sell the PPO's when available or a Med Sup, but when the PPO's are not available the PFFS plans can be a good choice as long as you take the time to correctly educate the clients and the Medical Providers in the community.

 

[MedSuppPro]

Levelized commissions makes a lot of sense for a MedSupp. They have a much longer product time line. Levelized commissions will effectively kill sales for Part C & D plans. Part C & D plans change annually and so will the client. The program is modeled for annual change. It's encouraged!

I'm looking at a few MA previews for 2009. My clients are going to change for the better. And when migrations occurs the levelized agent will never be properly compensated. This is a very unpredictable product and this is why I believe that it is not a sustainable marketing model for the agent.

Let's say you write 100 MAPD's through Open Enrollment. In order to keep your 100 clients next year, you will need to offer the better plan, otherwise a majority will move. So, you will need to contact all 100 plus bring in new business to pay your bills. This then goes on till you reach a point of saturation. Ultimately, you will get paid less for more work. Unless your from the home office I can't see how this will help the honest agent on the street. A perfect example is the Part D market. Part D currently nets a minimum wage commission and a lot of agents are not working the Part D market. I personally will levelize my marketing efforts if we truly go with, for example, a $15 / month ($180. annualized) levelized commission schedule.

The answer is State oversight of Part's C and D. If we had State enforcement of marketing laws we would have fewer marketing issues. I'm all for cleaning up this industry. Let there be no doubt – levelized commissions is not going to clean up this industry. It will drive sales numbers down which will help contribute to the ultimate demise of Part C & D. The client will lose agent support as many good agents can't afford to participate. The flybys will still be doing harm as long as there is no oversight. Enforcement is the key!