CMS spending more time on Guidelines For Medicare Sales Agents
Posted Nov 12 2008 8:42pm
This brings about a good question when it comes to paying commissions on selling health insurance, why do we need to pay this and not have some additional revenues paid here go towards claims? The reason I say this is so many of the health insurance brokers are just web sites that bring many carriers and their plans and prices in to a “dashboard” for the consumer to select one. After the fact, if you need help from the insurance carrier, do you do you go back to the website, no, you get in touch with the carrier. Commission paid from selections made from websites, well that is what we have quite a bit of out there.
Would seem to make more sense to have one centralized location to shop first off, and second not have to then go and look at still another website on how the folks who sell insurance are rated? It’s a very crazy situation here and no wonder we all get dizzy. Now when I need help on my car insurance, yes my broker is there to help and I can speak with them locally, so that is a bit different.
Now I realize there are also the “in person” sales that occur too, but in the past, those tactics have been abused with consumers not getting the type of coverage they need and being mislead, especially seniors, which you could not have missed that in the news.
There should be a better system in place, again, especially when website is collecting commissions for a single purchase transaction, and that would certainly leave more money in the till without commissions being paid for consumers accessing the site for the selection process. With all the constant changes in programs and coverage too, I would think internally the insurers would be in a better spot to also stay on top and be able to give accurate information too.
So now we have CMS involved in yet another area outside of patient care and that is setting rules and guidelines for the folks that sell insurance, and this take time away that could be dedicated to other areas. Policing this along with compliance has to be one big nightmare and headache. Just a thought, but taking some of the middle people out of the picture could certainly stand to improve not only cost but the administrative nightmares associated with it as well.
Just my guess here but it would certainly be easier and less costly for CMS to run a couple servers with the insurers plans listed, (and this way they could run audit trails too on what is done online with the carriers) for the consumers to use for the selection process instead of an web full of brokers all competing for the same business.
There would be no favoritism towards one carrier or the other at this point, let the data servers do the work with some real business intelligence and real time reporting services the agency could use in studies and let’s save some more money and send the dollars over to the claims departments. This would also make the process so much easier for community outreach programs to help seniors too. BD
CMS in September issued new rules governing insurance companies, agents and brokers regarding the marketing of Medicare prescription drug plans and MA plans. The rules stipulated, among other things, that commission for sales agents would be required to conform to a structure used in other parts of the insurance industry. First-year commission for a new customer could not exceed 200% of the commission for the next five years, in order to remove the incentive for agents to "churn" beneficiaries between different plans each year.
The new guidelines revise those from September by stating that agents and brokers should receive compensation that reflects fair-market value based on previous commissions, adjusted for inflation for similar products in the same geographic area. In addition, compensation for policy renewals must be exactly half of the compensation paid for that beneficiary in the initial year of the six-year compensation cycle established in the September rules. Agents and brokers who enroll beneficiaries in plans that do not meet their needs should receive reduced compensation, according to the new principles.