Insurance Agent Forum

[MedSuppPro]

Originally Posted by allhealthandlife

The carriers not CMS will track the six year cycle because they want to be compliant and because it is their money !

As this story unfolds... It will kill MA sales. And if your an MedSupp only agent, take note, your next!

Not only do we spend boat loads of time servicing these people and helping them through the Medicare maze. We risk our reputation by having to explain to these good people that "I'm sorry after 6 or less years I will not be able to assist you with your health insurance needs." We should require Medicare employees to agree to a 6 years or less contract. How asinine.

These are not Medicare Supplements. They renew annually. None of the plans I sold in 2003 are still in existence. By definition these plans change and the consumer is in great need for our guidance and customer services. This is especially true as our clients age. How can anyone with a straight face tell us that 6 years or less is good for the consumer and will cut down on unethical behavior. Who decided 6 years or less was the majic answer? Give me a break!

From my understanding, CMS will start tracking the agent of record in 2010. CMS claims that they will be able to track who the original agent was and they will be able to report to the carrier that an agent is in need of a wacking !

CMS needs a good wacking.

"They know nothing"

[GreenSky]

Here is my best guess as to compensation.

Renewals - about $100-150 per year
First Year - obviously $200-300
My "real" guess: $120/240

In speaking with a higher up at an insurance company I was told that initial commisisons can be paid up front but earned on a monthly basis.

Rick

[midwestbroker]

CMS cannot track their own apps much less who wrote what. I see this as a BIG mess in 2010.

Having worked the MA market for a little bit now, and seeing what is said and what happens, I am not too worried.

I have seen people make multiple changes in OEP and the apps have gone through. Humana got fined for enrollment of dead people in Oklahoma.

The more rules Medicare throws up the more chaos it creates. However, since CMS is a government outfit, efficiency and common sense is not required.

[allhealthandlife]

Maybe CMS will allow carriers to appear generous and pay say 800.00 which is 266.00 first year and 133.00 renewal for five years.

So now because of less incentive for other agents to poach your customers the business may stay on the books longer but as the years go by and the benefits are cut we get to field all the calls from disgruntled members.

CMS is kidding themselves if they think MA plans don't need to be sold.It seems like a model doomed to fail.

[midwestbroker]

One of the main problems that I see is that there are so many people who think seniors are these frail, incompetent people who cannot make any decisions.

The fact of the matter is, the majority of seniors are very intelligent, well seasoned individuals that do not need (or want) any more government regulation to inhibit their lives. Now, there is that minority that do need help and have been taken by scrupulous agents, but why penalize the who market for the ignorance of but a few?

[Frank Stastny]

Originally Posted by midwestbroker

One of the main problems that I see is that there are so many people who think seniors are these frail, incompetent people who cannot make any decisions.

The fact of the matter is, the majority of seniors are very intelligent, well seasoned individuals that do not need (or want) any more government regulation to inhibit their lives. Now, there is that minority that do need help and have been taken by scrupulous agents, but why penalize the who market for the ignorance of but a few?

Truer words were never spoken.

[MedSuppPro]

Originally Posted by midwestbroker

However, since CMS is a government outfit, efficiency and common sense is not required.

Most of CMS activities are through contracted entities. Claims and 1-800Medicare are examples of sub-contracted entities. And we agents are sub-contracted and certified entities. However, we have no say in the contract. It is a take it or leave it proposition. The FMO's did nothing!

And so we have good meaning people at CMS who have education and lots of experience running the CMS business. These administrators are now looking at a new job description that they have had no experience with. They now have to regulate sales activities and develope a set of rules to regulate this new responsibility. This is something that has taken state's years and years to figure out.

CMS has created a new sub-contractor definition called "RENT-A-AGENT". The unitended consequence of their newly created rent-a-agent will be to harm the senior client whom needs our services and advise. This is not a Win-Win solution. And one could argue that their rent-a-agent will ultimately help the insurance carrier's bottom line! CMS should have gone with a levelized commissions model like Anthem has offered for years. Levelizing commissions would have eliminated the quick buck agent and would have meet the requirement set by congress. Instead CMS went overboard on this one.

Should we RENTA-AGENT's fully disclose our limited relationship to perspective clients?
[indent]"Mr. and Mrs. Jones, I'm required to disclose that I am compensted by this plan... A MA / PDP works differently than a Medicare supplement plan... Due to CMS rules, I will be prohibited from servicing your future MA / PDP needs beyond {insert 6 or less} years." After {insert 6 or less} years you may go to any agent willing to accept the terms and conditions set by CMS and you will then need to switch plans in order to have a local agent to assit you with your health insurance needs. Or you may call the carrier direct. These home office people are compensated differently then an independent agent and may on a case by case basis accept the terms and condition of an independent agent and agree to service your needs and or advise you of your insurance choices. If at that point you unable to get service and advice that you feel you need and have come to appreciate, you may call 1-800Medicare.

I seriously believe we will need to disclose our Rent-A-Agent relationship to our clients. I don't want to assume the liability in outlying years. The client needs to know this upfront. Isn't this the ethical thing to do? What would AARP say?

[Googly Moogly]

Originally Posted by moonlightandmargaritas

Don't walk, RUN away as fast as you can...

Ditto!!!

[midwestbroker]

Another FYI

I spoke with the local director for Coventry. They are working on a letter that agents can present to beneficiaries that will allow the agent to talk about other products (waiving the 48 hour cool down period). They do not seem too optimistic about it.

Humana said that they are going to inform prospects on the phone that MA and other products will be discussed. This, they say, will get them around the 48 hour window. I do not see how it will but they seem to think so.

[Joe Moore]

My concern:

IF agents have no incentive to go after the coverage of an inferior plan, the companies will have no incentive to keep their plans superior to competitors.

Who suffers? The Consumers!

While you are containing the actions of the agents, why not standardize the plans, so consumers can compare an apple to an apple?

[Frank Stastny]

Originally Posted by MedSuppPro

Due to CMS rules, I will be prohibited from servicing your future MA / PDP needs beyond {insert 6 or less} years." After {insert 6 or less} years you may go to any agent willing to accept the terms and conditions set by CMS and you will then need to switch plans in order to have a local agent to assit you with your health insurance needs.

Is CMS actually, by rules and regs, "prohibiting" agents from servicing clients and having any contact with them after the specified time or are you just saying that and assuming that agents will no longer do that because the renewals will stop at that point?

I sincerely hope that CMS is prohibiting it and you are not just saying that because commissions will stop.

[Winter]

Originally Posted by midwestbroker

Another FYI


Humana said that they are going to inform prospects on the phone that MA and other products will be discussed. This, they say, will get them around the 48 hour window. I do not see how it will but they seem to think so.

Those carriers will hang you out to dry if CMS takes issue. Ask them if that practice has been approved by CMS, not by Humana compliance.

[GreenSky]

Originally Posted by Frank Stastny

Is CMS actually, by rules and regs, "prohibiting" agents from servicing clients and having any contact with them after the specified time or are you just saying that and assuming that agents will no longer do that because the renewals will stop at that point?

I sincerely hope that CMS is prohibiting it and you are not just saying that because commissions will stop.

Frank, I can't afford to work for free and neither can you. Will I help a client if they have a need? Of course. However let's look at PFFS plans. In most areas, they will be history in a couple of years. Here are the options:

1) The current carrier will convert them into a PPO plan and (I assume) I will continue to get my $100 a year.

2) My client wants me to drive 2 1/2 hours to review all the choices so I can still make the $100.

I'm sorry, but I don't think many agents can afford to do this without being compensated. The same rules apply to prospects. How hard will you work for $100?

It's even worse with PDP plans. Same rules apply. Agents complain (including you) that for $50 it's not worth the time it takes to adequately review plans to make sure the medications taken are covered. How would you like to do that annually so you can make the same $6 you would have if your client stayed in their inferior PDP? Are you going to review all his/her medications without receiving even the $50 you get now? Would you even bother talking to a prospect to make $6?

I think my days as a CSA are numbered. I'm going to transition into life insurance or more specifically term and final expense. You know, the stuff even I can understand. Oh yeah, still love Med Supps.

Rick

[allhealthandlife]

Right on. This article published today from a Medicare rights advocacy group speaks to exactly that.

Asclepios
Your Weekly Medicare Consumer Advocacy Update


New Rules for Medicare Private Health Plans

September 18, 2008; Volume 8, Issue 38


After four years of complaints from insurance commissioners, exposés in the
Press, congressional hearings and the testimony of numerous victims of fraud and
Deception and, finally, a legal mandate from Congress, the Bush Administration
Has decided it is time to regulate the marketing of Medicare private health
Plans.

The new regulations on commissions for brokers selling Medicare private health
And drug plans that take effect today are modeled after the rules that have
Governed the sale of Medigap supplements for over a decade. Companies must pay
Commissions over a minimum of six years and the commission for initial
Enrollments cannot be more than twice the rate for any subsequent year.

The structure is designed to discourage "churning"—moving people from plan to plan to earn a commission—and to encourage agents to sell
Plans that are in the long-term interest of their clients. If enforced, it may
Work and weed out the agents who are in it just to make a quick buck.

But there are fundamental differences between the Medigap market and the market
For private Medicare "Advantage" plans that undermine the commission structure
Developed by the Centers for Medicare and Medicaid Services.

An agent selling a Medigap plan knows the benefit package will be just as good
Two or six or ten years from today, because the benefits are standardized and
Mandated by law. Premiums can go up, but even these are subject to state
Regulation.

Not so with Medicare Advantage plans. Every year the benefits can change.
Premiums can go up, but so can copays for hospital stays. The annual cap on
Out-of-pocket spending can double, or even disappear. The incentives for the
Plan are to shift costs onto the sick and keep premiums low enough to attract new healthy members. What seemed at the outset like a suitable plan for someone
Living with multiple chronic conditions can devolve over time into a benefit
Package riddled with holes.

There are other problems with the rules established by CMS. Insurance companies
Can still provide higher commissions to push low-value plans over plans that
Offer greater financial protection for the enrollee (and greater financial risk
For the company). After all, it takes more work to cajole or trick someone into
A lousy deal.

The solution to these problems lies in establishing a minimum standard for the
Financial protection provided to enrollees in Medicare Advantage plans,
Standardizing the benefit packages to make facilitate comparison and providing
Some guarantee of year-to-year continuity in coverage.

The current situation—where only the fine print of benefit packages can reveal
The traps that are set for cancer patients and others with high-cost
Illness—is unacceptable, both to people with Medicare and to the honest brokers trying to find the best plans for
Their clients. CMS took a step today toward choking off the cash flow to
Predatory agents. It should take the next step and weed out unscrupulous plans.

[Frank Stastny]

Originally Posted by GreenSky

Frank, I can't afford to work for free and neither can you. Will I help a client if they have a need? Of course. However let's look at PFFS plans. In most areas, they will be history in a couple of years. Here are the options:

1) The current carrier will convert them into a PPO plan and (I assume) I will continue to get my $100 a year.

2) My client wants me to drive 2 1/2 hours to review all the choices so I can still make the $100.

I'm sorry, but I don't think many agents can afford to do this without being compensated. The same rules apply to prospects. How hard will you work for $100?

It's even worse with PDP plans. Same rules apply. Agents complain (including you) that for $50 it's not worth the time it takes to adequately review plans to make sure the medications taken are covered. How would you like to do that annually so you can make the same $6 you would have if your client stayed in their inferior PDP? Are you going to review all his/her medications without receiving even the $50 you get now? Would you even bother talking to a prospect to make $6?

I think my days as a CSA are numbered. I'm going to transition into life insurance or more specifically term and final expense. You know, the stuff even I can understand. Oh yeah, still love Med Supps.

Rick

I totally agree. I no longer spend time explaining or looking up drugs for the current $50 commission. I always offer my help but suggest to them that their pharmacy can most probably sign them up with any plan where I can only offer those I am certified to sell. I do have their best interests in mind by making that suggestion.

I was only asking for clarification by asking that question. It is one thing for an agents to feel resentment in doing this because they don't feel they are being compensated enough (I don't disagree with that) yet a totally different situation if CMS is actually prohibiting it.

MedSuppPro implied that he would tell his client the following. "[COLOR=Red]Due to CMS rules, I will be prohibited[/COLOR] from servicing your future MA / PDP needs beyond {insert 6 or less} years."

I just want to know of that is true or not. I really don't know, I'm not busting anyone's ass.

Is CMS going to actually "prohibit" an agent from servicing his/her client after a certain period of time? If they aren't then why even mention it.

I get "full commission" for six years when I sell a Med Supp. I would never think of telling a client when they take the policy that for the first six years you will receive excellent service from me. But, beginning the seventh year, since my commission will be cut in half, I will only be returning every other phone call when you try to reach me.

[MedSuppPro]

Frank thanks for your contribution to this thread. Your point is well taken. For those of us whom have the PFFS disclaimer memorized, we may be able to see the parity I attempted to portray. I understand that to the casual observer this parity would be impossible to see.

Your totally fortunate to be able to avoid this farce and all the trappings that the multifaceted agent has to endure. My hat goes off for you. You do not sell Part C and Part D plans.

"Booyah."

To answer your concern with my choice of the word “prohibited” I attempted to propose what I feel is an important symbolism of the true hypocrisy of CMS’s new six years and your out commission language. I call it Rent-A-Agent. Unlike MedSupps, I will not be able to place another MA plan in the same home after the sixth year. This is due to a prohibition from the CMS guidelines for my ability to make a living. It fly’s in the face of reality of how most of my clients want to develop a long-term relationship with a trusted advisor. This part I’m certain you get!

The commission part that you don’t get is that these plans are not Medicare Supplements. They are 12 month agreements that are subject to change.

You state that: I get "full commission" for six years when I sell a Med Supp. I would never think of telling a client when they take the policy that for the first six years you will receive excellent service from me. But, beginning the seventh year, since my commission will be cut in half, I will only be returning every other phone call when you try to reach me.

As they say in St. Louis;

“Which part of zero don’t you understand”

I have MedSupp clients whom I no longer receive a dime in commissions. Yet just as I did this morning I take their calls. But, why would I continue to service Medicare Advantage and Part D plans if I no longer am paid. I could work at 7-11 and make more money. So, have you read or tried to understand the new MIPPA CMS implementing guidelines? After you have, ask yourself if this could affect your MedSupp business. Could you see some of these draconian rules spill over into your world of MedSupp’s?

And it is people like you that instead of getting involved in the conversation today will sit on the sidelines and point at one freaking word that was inserted in the heat of battle. Most people whom are in this storm understand the rational of my disclaimer. Should I word smith better – absolutely. However, I will not and as a practice, I will inform my clients that yes, in the sixth year of our relationship we are toast, history and that this is due to some asinine rule that has been conjured up by a bureaucrat that has no real world experience of what it is like to provide an honest attempt to fully disclose and service a Medicare eligible client.

So, just for Frank…

Please remove the word;

Pro•hib•it
Using the definition of; To prevent; preclude: Modesty prohibits me from saying what happened.
2 a: to prevent from doing something b: PRECLUDE

And insert the word:

Pre•clude
Pronunciation: \pri-ˈklüd\
To make impossible by necessary consequence : rule out in advance

As In:

Due to CMS rules, I will be precluded from servicing your future MA / PDP needs beyond {insert 6 or less} years.

And yes, Frank, I don’t have to work for Free after 6, 5, 4, 3, 2 years, or for less than 12 months. I can justify this with the same logic you use to tell your clients to go down to the local pharmacy for their Part D coverage. My competitive back yard would eat me up if I told my clients to go down the street. And besides I help all my clients get their part D benefit as a value added service. That said, I don’t have to accept the future financial liability of a plan that restricts my ability to provide services after a 6 year Rent-A-Agent relationship, and my clients need to know this upfront. I believe that disclosing this upfront is the most ethical thing to do. I hope you seriously don’t have a problem with that?

[midwestbroker]

Six years ago, Humana had the strongest plan in Kansas City. Coventry was still building networks and CIP, AARP (MA), Today's options, and Sterling were not here.

Now, Coventry has the most benefit rich plan, Humana is second, and we have a new carrier on the MO side (Cigna).

Every year I have to look at 6-7 different MA carriers to see what best suits my clients. This will vary by county as well since Coventry is stronger on this side of Kansas City, and on this side Humana is stronger, etc. Even Medicare on the inside cover tells their beneficiaries to look every year because what worked for them this year, may not be the best option for next year. Medicare had created a plan that in some cases requires "churming" clients.

I would like to see a Medicare survey done. When you have a question about your policy, would you rather call: 1. your local agent 2. Medicare

Looks like I will have to fire off a letter to Max Baucus (Democrat Montana) who sponcered the bill.

[midwestbroker]

P.S.

If you have agents who are abusing the Medicare system, why impose more rules. If they are not following the ones on the books now, what are a few more going to do?

[salpro22]

I don't work the senior market, so I'd appreciate some input from the vets.

1. Are you prohibited from charging clients fees for your services in addition to the commission you get? If not, can you charge fees just for your advice instead of commission?

2. If you can charge clients fees, what's to stop you from "thinking outside the box" and charging a client a fee to speak to you once or twice a year for health insurance advice similar to the fee only financial planning model? You could offer a sliding scale model for those with lower incomes!

3. It is illegal to sell any of the health plans online? Supps, Advantage plans, Prescription Plans, etc.?

-J.R.

[Frank Stastny]

Definitely one of the best posts you have written on this board. Very well presented. I so enjoyed reading it. Seriously.

Originally Posted by MedSuppPro

Frank thanks for your contribution to this thread.

You are very welcome.

Originally Posted by MedSuppPro

Your totally fortunate to be able to avoid this farce and all the trappings that the multifaceted agent has to endure.

I don't know that I would use the word "fortunate". I haven't made the "big bucks" you and others have made placing PFFS plans.

When PFFS plans first came out I didn't like the concept. I felt at that time that it was going to be just another government boondoggle. They looked like something that would not be around very long and not in the best interest of my clients so I decided not to offer them. I am, however, certified to sell them.

"Multifaceted agent", that's a good term. Are you saying that you "sparkle" from all angles like a diamond? You should put that on your business card, that really sounds impressive. Do you mind if I use that?

Originally Posted by MedSuppPro

To answer your concern with my choice of the word “prohibited” I attempted to propose what I feel is an important symbolism of the true hypocrisy of CMS’s new six years and your out commission language. I call it Rent-A-Agent.

I like the term "Rent-A-Agent". Good description. The discussion was centered around the new CMS rules and regs. When I read your post it was very believable to me that CMS would issue such a statement. I was not trying to bust your ass, just curious since you didn't put "prohibited" in quotation marks in your original post but I noticed you did use them above.

Originally Posted by MedSuppPro

The commission part that you don’t get is that these plans are not Medicare Supplements. They are 12 month agreements that are subject to change.

That is the first thing I picked up on at the very first certification meeting I attended. The speaker kept telling us how much money we were going to make by putting our Med Supp clients in a PFFS plan. When I asked about renewals he changed the subject. I asked again and said that I felt that it was going to encourage agents to roll their client into a new PFFS plan each year just for the commission whether or not it was good for the client. Again he changed the subject.

Originally Posted by MedSuppPro

I have MedSupp clients whom I no longer receive a dime in commissions. Yet just as I did this morning I take their calls. But, why would I continue to service Medicare Advantage and Part D plans if I no longer am paid.

That is a good question. Why would you do it for your Med Supp clients and not your MA and Part D clients? Do you like your Med Supp clients more than your MA and Part D clients?

Originally Posted by MedSuppPro

And it is people like you that instead of getting involved in the conversation today will sit on the sidelines and point at one freaking word that was inserted in the heat of battle.

Make no mistake, I am very concerned and "involved" in what CMS is doing. I do see the negative aspects that may spill over to Med Supps.

Like Rick, I also have contacted my legislators in Washington. Have you done the same or have your efforts to initiate change been limited to bitching on this board?

Originally Posted by MedSuppPro

I will inform my clients that yes, in the sixth year of our relationship we are toast, history and that this is due to some asinine rule that has been conjured up by a bureaucrat that has no real world experience of what it is like to provide an honest attempt to fully disclose and service a Medicare eligible client.

I have difficulty believing that you would actually make a statement like that to a new client. When they ask why, are you going to tell them "because I will no longer make any money from the plan I just sold you"? I sensed in your other post when you said that you were serious. I just wanted confirmation that you really were and not just saying that to make a point. That is going to make your new client feel all warm and fuzzy about their choice of agents.

And besides, do you really think that six years from now PFFS plans will still be around or that the current CMS rules and regs will still read as they do today?

You are getting all worked up about something that most probably will not even be an issue six years from now.

My biggest concern, and it should also be yours, is their new rules and regs regarding all the prohibitions as they relate to marketing. When you have been in this business for a while longer you will realize that it is difficult enough to project what is going to happen next year let alone six years into the future.

Originally Posted by MedSuppPro

I believe that disclosing this upfront is the most ethical thing to do. I hope you seriously don’t have a problem with that?

On the contrary, not only do I not have a problem with it, I would encourage you to tell that to every new client especially if you were contacting seniors in my area.

I think it is important for them to know that you will only help them if you are getting paid and once that stops that they will no longer be of any no value to you.

I really have no desire to get into a pissing contest with you. I just felt that your original post that started all this was just a little out left field since you were trying to project what may happen six years from now and actually going to tell that to new clients.

I had no idea that something that may happen six years from now has become such an emotional issue with you. Had I known I would have never brought it up. I really am very sorry I even mentioned it.