Is Medicare Advantage the Future?

[somarco]

Possibly, my personal opinion is different, but others disagree. From a retiree's perspective the pitch is attractive . . . even though the presentation is rarely (if ever) accurate and mostly misleading.

If MA is the "wave of the future" is it a good business model for the agent?

For years DC has pushed the single payer system for health insurance and it never got off the ground. Then a charming young fellow came on the scene, connected with the younger crowd, women and minorities, and swept the political landscape with a Gordon Gecko style catchphrase . . . "Change, is good".

People bought the pitch. Some thought everything would be free an no one would have to pay for anything.

Of course they were wrong . . .

Now we have ACA, a fascist creation where government tells private enterprise what they can and cannot do. This change did not lower premiums but did create a massive subsidy program making the monthly cost affordable (after rebate) to low income individuals . . . everyone else is screwed in that regard.

It also promised to bend the health care cost curve downward. Never happened. Health care is more expensive than ever.

Insurance carriers and agents cheered the change . . . then envisioned a world where everyone would be required to buy their product and all those on the supply side would get wealthy.

Didn't happen.

Most health insurance carriers bailed on the market . . . same for agents. Consumers, for the most part, must go to a government site to shop, price and purchase health insurance. Agent commissions are lower and mostly restricted to open enrollment and SEP. The overall number of agents and carriers in the under 65 health insurance market fell off a cliff shortly after ACA was implemented.

The few carriers that remained in the market don't need (or want) agents, plus the government handle most of the DTC advertising. Carriers are bootlicker's and lapdogs for the government.

MAPD is moving in the same direction. DTC advertising comes from CMS and the carriers. Frankly, I am surprised agents are still in the game. While some agents produce a fair amount of business (mostly because of artificial incentives) a number of agents create headaches for the carriers. It has always been that way in the health insurance side. Agents who know how to sell but have no idea what they are selling or how the product works, create problems, and losses, for carriers.

How long before the MAPD market is no longer a profitable business model for agents? Change, is good . . . or is it?

 

[axeman462]

How is that really any different from Original Medicare, where DC bureaucrats control costs, approvals/denial of coverage etc...

The trend is generally toward more government control in everything. I agree with you that more government = bad policy, but the answer is not Original Medicare. The answer would be to eliminate Medicare completely.

 

[TheMedicareWizard]

MAPD is moving in the same direction. DTC advertising comes from CMS and the carriers. Frankly, I am surprised agents are still in the game.

I am too. The agent-carrier relationship is super frictional. I get the impression CMS and carriers don't want agents doing any of their own marketing & advertising. Nor can any agents really compete with their massive marketing budgets.

While some agents produce a fair amount of business (mostly because of artificial incentives) a number of agents create headaches for the carriers. It has always been that way in the health insurance side. Agents who know how to sell but have no idea what they are selling or how the product works, create problems, and losses, for carriers.

How long before the MAPD market is no longer a profitable business model for agents? Change, is good . . . or is it?

It definitely feels like the bubble is bursting. EHealth reported a $104 million net loss for 2021...I can only imagine other massive call center agencies are feeling the heat. https://ir.ehealthinsurance.com/node/18631/html

 

[somarco]

I am too. The agent-carrier relationship is super frictional. I get the impression CMS and carriers don't want agents doing any of their own marketing & advertising. Nor can any agents really compete with their massive marketing budgets.

It definitely feels like the bubble is bursting. EHealth reported a $104 million net loss for 2021...I can only imagine other massive call center agencies are feeling the heat. https://ir.ehealthinsurance.com/node/18631/html

The carrier/agent relationship has always been tenuous at best. Marketing departments love agents for the "no cost" promotion . . . let agents spend their own money to find clients . . . we (carrier) only pay when they bring us business.

The bean counters never liked agents, especially underwriters. They think agents are all lazy, spending most of the time playing golf, buying a round of drinks and meals in order to write business. They believe agents work maybe 10 - 20 hours per week and all make 6 figure incomes.

CMS marketing guidelines are not agent friendly and tilted in favor of the carriers, and of course, CMS direct marketing.

I also agree with your observation that MAPD is not really a mass marketed product but that does not stop companies like eHealth from going in that direction.

It takes a lot of effort (and $$$) to attract and retain client when you are selling a product perceived as "free" and unfettered access to health care . . . of course, neither of those premises are true, but that does not stop agents from selling it that way, or prospects from believing what they are buying is really a panacea.

I didn't digest the SEC link you provided, but I think they had a similar "wokeness" about ACA business.

My business model is laser focused and run like a boutique . . . personalized service (almost 24/7) with direct access to me via phone or email. No pressing one for English or being routed to voice mail hell.

I manage to keep my costs low while growing the business at my own pace and sometimes get overwhelmed with referrals . . . which is a mixed blessing.

The same folks who thought ACA was the easy road paved with gold will most likely one day find out the old days and ways were more profitable.

When the MAPD bonus bucks are no longer flowing for production I wonder how many agents will move on to peddling aluminum siding and used cars?

 

[Millwood]

What is the new DCE (Direct Contracting) for Original Medicare beneficiaries with a Med Supp?? Acts like a Medicare Advantage with payment based on outcomes.

 

[somarco]

What is the new DCE (Direct Contracting) for Original Medicare beneficiaries with a Med Supp?? Acts like a Medicare Advantage with payment based on outcomes.

Still on the drawing table . . . Medicare version of ACO's, many started up in the early days of Obamacare. Remains to be seen if they will be implemented. Similar to HMO MAPD . . . only in large metro areas . . . cater to chronic illness . . . patient gets care from central hospital/clinic and small list of providers.

Generally what happens is chronically ill with conditions that are not terminal are admitted but they don't want incurable cases that could result in death due to financial penalty to the DCE

One other note . . . the DCE model is being ravamped once again proving it is just another political football that will not accomplish what is intended.

https://www.healthcaredive.com/news/cms-direct-contracting-medicare-biden-value/619507/

 

[somarco]

How is that really any different from Original Medicare, where DC bureaucrats control costs, approvals/denial of coverage etc...

Seems you don't understand how original Medicare works.

 

[Travis Price]

Seems you don't understand how original Medicare works.

Seems to be the case with a few members of this forum. I suck at sales, not so bad at being a resource when people actually need to talk about stuff that happens to them.

 

[axeman462]

Seems you don't understand how original Medicare works.

seems you don't understand how the government works

 

[goillini52]