Part C &D Levelized Commissions?

[Frank Stastny]

Enforcement is the key!

In a perfect world you are correct. However, there are tons of laws governing the sales of insurance on the books of each state now.

In order for enforcement to work the DOI of each state would have to have a huge number of of people who do nothing but investigate agents.

That ain't gonna happen.

Levelized commissions is going to be the only way to skim the scum from the insurance pool. The industry will not do it and the government can't hire enough people or spend enough time to do it.

And yes, you are correct, it is going to hurt the career agents who are actually helping clients and prospects.

Levalize commissions, let agents sell them twelve months a year and treat them like Med Supps. If that happens we will see a totally different product, maybe one that will really benefit the client and not the company or the agent.

 

[GreenSky]

Levalize commissions, let agents sell them twelve months a year and treat them like Med Supps. If that happens we will see a totally different product, maybe one that will really benefit the client and not the company or the agent.

Frank:

You've hit the head on the nail! Lock-in has created most of these problems and once again, CMS is adding more and more regulation to correct their error.

It would be so easy to fix this but we're dealing with the government.

Rick

 

[patch36]

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!

Good points.

 

[patch36]

In a perfect world you are correct. However, there are tons of laws governing the sales of insurance on the books of each state now.

In order for enforcement to work the DOI of each state would have to have a huge number of of people who do nothing but investigate agents.

That ain't gonna happen.

Levelized commissions is going to be the only way to skim the scum from the insurance pool. The industry will not do it and the government can't hire enough people or spend enough time to do it.

And yes, you are correct, it is going to hurt the career agents who are actually helping clients and prospects.

Levalize commissions, let agents sell them twelve months a year and treat them like Med Supps. If that happens we will see a totally different product, maybe one that will really benefit the client and not the company or the agent.

It had not occurred to me how much the enrollment periods actually make the situation worse. The idea of levelized commissions with a year round enrollment period makes great sense and would have all the effects you claim, but... the government and the insurance companies seem to prefer complicated scenario's (like Part D). In a perfect world a 75 year old should be able to understand their insurance.

 

[senior-advisor-indiana]

Frank:

You've hit the head on the nail! Lock-in has created most of these problems and once again, CMS is adding more and more regulation to correct their error.

It would be so easy to fix this but we're dealing with the government.

Rick

I have never been to Cali, but here in IN we hit the nail on the head.

 

[Non-golfing Agent]

I would be all for levelized commissions IF we could offer these plans year round, limits were set on annual rate increases and plan changes.

Pigs fly, etc.

 

[jdeasy]

In a perfect world you are correct. However, there are tons of laws governing the sales of insurance on the books of each state now.



Levelized commissions is going to be the only way to skim the scum from the insurance pool. The industry will not do it and the government can't hire enough people or spend enough time to do it.

And yes, you are correct, it is going to hurt the career agents who are actually helping clients and prospects.

Levalize commissions, let agents sell them twelve months a year and treat them like Med Supps. If that happens we will see a totally different product, maybe one that will really benefit the client and not the company or the agent.

I agree with this 100%. That would be a level playing field. The only thing I disagree with is the premise that the product does not benefit the client now. The product sure benefits my clients. Try to take it from them.

 

[midwestbroker]

While some of the problems exist from bad agents, the other side of this is the government.

Having dealt with the Missouri DOI on one case (I was in the clear) I have discovered that they have no idea how the system works or what is going on with MA plans and their own Medicaid system.

CMS rules over Part D and MA plans. The DOI gets the rest. I am willing to bet that one hand does not know what the other is doing.

So, all we can do as agents is figure out how to take care of our clients and keep driving forward.

More government control or oversight will result in more rules that make it harder for seniors to get in touch with a honest agent, as we will follow the rules. The ones that do not care and are looking for their next commission will be the ones in front of them, making it even worse for all of us.

Another problem is that there are a lot of seniors that do not report when they talk to a bad agent.

One poss solution is to go after the IMO's and hold them more responsible. That will make the IMO hire better quality agents if they know that this will come back to hurt them as well.

 

[patch36]

Midwest. You and I work the same city, but the opposite ends. You and I both know how predatory and bad some of the agents have been the last couple years. Coventry for one has allowed out of town IMO's to send huge fleets of inexperienced agents in that have stretched all the marketing rules and aggressively pursued the MA market. CIP, mostly form Parker Agents have preyed on the SNP folks with a plan that is expensive and without a network. I have customers who were called no less than 10 times by the same people trying to set appts and come see them. I know of door knocking and neighborhood/apt complex canvassing by agents. As long as complaints are not make and proven, these people have carte blanch.

The Senior Solutions folks have pushed their Pyramid PFFS in our metro area where it is not even close to the best product, but it is all they have and they are more aggressive than the out of town marketers, and more aggressive (if that is possible) than the Bankers agents they used to be.

These people don't necessarily lie to get business, but they never tell the whole story or fully or comparatively explain the benefits. That is no different than lying as far as I am concerned.

The abuses are not going to end until the quick buck is taken out of the picture. Level commissions and year around enrollment seem to be possible solutions, because all the sales suspensions accomplished last year was to make the bad companies, agents and marketing organizations more careful when someone is watching.

 

[Frank Stastny]

Midwest and Patch, you both, as Rick would say, "have hit the head on the nail".

A very similar situation took place in the early 90's when insurance companies were permitted to design their own policy and call it a "Medicare Supplement". There was a tremendous amount of abuse on the part of both agents and companies selling "Med Supps". There were people who had as many as five different supplements.

Agents would go on appointments and tell the prospect that the policy they had was okay but there were huge gaps in their coverage. Prospects were told that all they had to do is add this additional policy and they would be 100% "covered".

That is what prompted the standardized policies we currently have in the Med Supp market today.

Not only did that stop the abuse it also got rid of the agents were only interested in scamming commissions. Believe it or not that was initiated by the government. They actually did something that was in the best interest of all involved. I'm sure the person who made that decision was fired.

I can't sell HMO's or PPO's in rural Missouri and I refuse to sell PFFS plans the way they are currently structured. There are too many problems with them for people who do not live in a large metro area.

Until there is some kind of structure set up so if a client's doctor accepts the PFFS plan today the client has some degree of certainty that he/she will also accept it tomorrow I will continue not selling them.

There also needs to be some degree of standardization among the PFFS plans. They are way too confusing and complicated the way they are. So much so that I believe that a lot of agents placing them don't have a clue how they work. All they know is they make a "bunch of money" each time they place one.