Why I want NO Advance for MA Business.

Sep 10, 2008

  1. theinuranceguy
    Offline

    theinuranceguy Guru

    Posts:
    936
    Likes Received:
    3
    The best thing that could happen in the senior market would be if CMS mandated that all MA commissions would have to be as earned.

    First of all, unethical agents would be gone. There would be very little rolling of business in the agents favor, hence, its not very attractive to unscrupulous agents.

    Second, not many agents could afford only getting paid as earned, this would force them to look at other niches to make quicker money.

    Third, we would have less fly by night MA Agencies. Agencies that will survive this are going to be the ones doing it the right way.

    In all three situations it boils down to one of two things. Less competition for agents that are going to stick with the market, and it wont be as attractive for more agents to enter the market. This will cut the number of agents competing against each other.

    That is why I am actually looking for these companies to move to an as earned model of commission payment.
     
  2. GreenSky
    Offline

    GreenSky Guru

    Posts:
    15,339
    Likes Received:
    452
    State:
    Nevada
    Ramiz - I'm glad I was able to convince you that my position on this issue (going back 3 years) is correct.

    You've come a long way grasshopper.

    Oh yeah, get rid of lock-in. It's anti-consumer.

    Rick
     
    GreenSky, Sep 10, 2008
    #2
  3. jdeasy
    Online

    jdeasy Guru

    Posts:
    16,786
    Likes Received:
    213
    State:
    Kentucky
    I agree with this as long as lock in is done away with as well. They also need to do away with advances on the med sups for the very same reasons. You don't want one of those quick buck MA agents moving into the med sup field just for the advance.
     
    jdeasy, Sep 10, 2008
    #3
  4. Frank Stastny
    Offline

    Frank Stastny Guru

    Posts:
    7,069
    Likes Received:
    19
    State:
    Florida
    I totally agree with one exception.

    I have never been worried about competition. The Medicare Supplement market has always been overwhelmed with agents, at least in Missouri.

    Most of them don't have a clue what they are doing and only sell the plans that pay them the highest commissions. That is actually a good thing for me and has been one of the main reasons for the success I have had.

    My biggest reason for wanting to see MA commissions to be paid only "as earned" is the statement you made in the second paragraph. "First of all, unethical agents would be gone. There would be very little rolling of business in the agents favor, hence, its not very attractive to unscrupulous agents."

    Although, those bottom feeders, who have only gotten into the Senior Market to sell MA plans for exorbitant commissions, have actually helped increase my Med Supp business.

    I received a call just yesterday from a husband and wife literally begging me to help them get out of the MA plan they have and back into a Med Supp. They said the agent told them it was going to be "just like their Medicare and Med Supp policy".

    Obviously they had a PFFS plan. When MA plans only consisted of HMO's and PPO's this problem didn't exist. Only since the advent of PFFS plans have the bottom feeders invaded the senior market.

    I not only support CMS mandating that commissions be paid as earned but I strongly feel that the maximum commission should be more in keeping with an agent would earn from a Med Supp policy. That may even be too high.

    Just for the record I think CMS and PFFS plans have done more to enable bottom feeders to rip off seniors then when insurance companies were able to design their own policies and call them "Medicare Supplement" policies. The abuses perpetrated by companies and agents back then were criminal.
     
  5. Frank Stastny
    Offline

    Frank Stastny Guru

    Posts:
    7,069
    Likes Received:
    19
    State:
    Florida
    CMS is "anti-consumer"!

    Agents should be permitted the latitude when "selling" MA plans as they are in selling Med Supps.

    If I go on a Med Supp appointment I can present all of the options that I believe will be in the best interest of the prospect. I am actually permitted to help a senior make a well informed, intelligent decision.

    If I go on a MA appointment I am prohibited by CMS from helping my prospect choose the option that will give them the best possible choices to manage their health care. I can only talk to them about the crappy PFFS plans that a lot of doctors in Missouri still don't accept.

    It doesn't sound to me like CMS really gives a damn about seniors. I don't know what their agenda is but it is obvious to me that helping seniors in non-existent in their list of priorities.

    Once again, I'm "HOLDING BACK"!
     
  6. Newby
    Offline

    Newby Guru

    Posts:
    14,119
    Likes Received:
    997
    State:
    Indiana
    I agree with all of this.

    I pretty much think the whole insurance industry would be better off going as earned.

    I can't believe that as earned doesn't pay more than advanced does.
     
    Newby, Sep 10, 2008
    #6
  7. Joe Moore
    Offline

    Joe Moore Guru

    Posts:
    307
    Likes Received:
    1
    State:
    Tennessee
    We have not had any official info on MA commissions for "09.
    Has anybody?

    Through a discussion yesterday we heard rumors some companies already have level commission schedules printed, but there is no agreement with CMS as to when they should go into effect. Sept 15th is the rumored date.

    My understanding from this conversation is there will still be advances, but the short-term money may not be near as great.

    Newby, I wish the insurance industry could operate "as earned"; we would not have near the risk we do now. I have been working our "debit balance" agents this week and am not in a great mood with this subject.

    With some companies offering 100-125% advances on 1st year commissions (I am aware of one med sup company offering 15 month advancing), "as earned" would get laughed at and bypassed by a lot of agents. Some feel they have to have it for next weeks bills.

    Seems "advances" are looked at as "money earned" and some folks have problems recognizing it for what it is--a loan.

    I think we will shortly see tamed down lower advances for MAs, but I don't think we will see advances on these products completely go away.

    Green Sky is right, when these level commissions go into effect look for plenty of churning the 1st year.
     
  8. allhealthandlife
    Online

    allhealthandlife Guest

    "It doesn't sound to me like CMS really gives a damn about seniors. I don't know what their agenda is but it is obvious to me that helping seniors in non-existent in their list of priorities. "

    CMS agenda is dictated by Dept Of Health and Human Services which is ran by a Bush Administration appointee.

    With the Medicare Modernization Act the Bush Administrative set out to stealthly privatize Medicare on the behest of the insurance and pharmaceutical lobby.

    Why do you think they call it Medicare Advantage and not Private Medicare Plans ?
     
  9. patch36
    Offline

    patch36 Guru

    Posts:
    1,066
    Likes Received:
    3
    State:
    Missouri
    Where was the stealth? It wasn't a big secret that MA is a step toward privatization vs government managed Medicare.

    I would love to see an as earned commission model applied to all Medicare products.
     
    patch36, Sep 11, 2008
    #9
  10. Frank Stastny
    Offline

    Frank Stastny Guru

    Posts:
    7,069
    Likes Received:
    19
    State:
    Florida
    So would I. The senior market would be a whole lot better off.
     
Loading...