Tag Archives: AHIP

Why Many Insurance Agents Have Stopped Selling Prescription Drug and Advantage Plans

If you’ve noticed that fewer independent agents are offering Medicare Advantage (Part C) or Medicare Prescription Drug (Part D) plans, you’re not imagining things. Over the past couple of years, the Centers for Medicare & Medicaid Services (CMS) has introduced an increasing number of onerous regulations that have made it extremely difficult for many agents to continue offering these plans, especially independent agents who value personal service and client relationships.

While these rules were intended to protect consumers from misleading marketing, the burden of compliance has become overwhelming for many professionals in the field. Here’s a closer look at what’s changed and why it’s causing so many agents to step back.

The Call Recording Requirement

Perhaps the biggest change came when CMS began requiring agents and brokers to record every marketing, sales, and enrollment call related to Medicare Advantage plans (Part C) and Medicare Prescription Drug Plans (Part D). This means any discussion involving benefits, costs, or plan comparisons must be recorded, both inbound and outbound, and those recordings must be securely stored for 10 years.

That might sound simple, but for independent agents, it’s a major operational and financial challenge. Recording, encrypting, and storing every call securely requires specialized technology, data security systems, and compliance audits. If even one recording goes missing, an agent could face serious penalties. For small agencies and independent brokers, this rule alone has made it nearly impossible to operate efficiently.

Please click here for more specific details regarding marketing policies and FAQs for selling Medicare prescription drug and Medicare Advantage plans.

Increased Compliance and Oversight

CMS now classifies many independent agents and marketing organizations as Third-Party Marketing Organizations (TPMOs). Under these rules, agents must read lengthy government disclaimers at the start of every call or meeting, document every contact, and ensure all marketing materials are CMS-approved before use.

This includes websites, flyers, emails, and even social media posts that mention Medicare Advantage or Medicare Prescription Drug plans. Every piece of material must be filed through a formal process for review, which can take weeks. This makes it difficult for agents to respond quickly to client questions or market changes during the short Annual Election Period (AEP), which goes from October 15th through December 7th each year.

More Work, Less Reward

Despite the added workload and responsibility, commissions have not increased to reflect these changes. Agents still receive modest compensation for enrolling people in Medicare Prescription Drug plans and Medicare Advantage plans. So now, agents face hours of compliance documentation, call recording, and potential liability without a corresponding increase in pay. For many, it simply isn’t worth the time, risk, or stress. For more details, please click here to read my other blog called “Why You May Be Better Off Choosing Your Own Medicare Prescription Drug Plan (Part D)”

The Risk of Liability

Another issue driving agents away is the potential legal exposure. With every recorded call and piece of marketing material subject to audit, a single accidental error, like forgetting to read a required disclaimer, can lead to fines or the loss of certification.

Most agents take pride in helping clients find the best coverage possible, but with these new rules, even honest mistakes can be costly. It’s a high-stress environment for people who genuinely care about their clients.

A Shift Back to Personalized Service

Because of all this, many experienced agents are now focusing primarily on Medicare Supplement (Medigap) plans. These plans are not part of the CMS marketing system that governs Medicare Advantage and Prescription Drug plans, which means agents can provide clients with more individualized service and guidance without jumping through as many regulatory hoops.

With Medigap plans, clients get lifelong coverage that works seamlessly with Original Medicare, and agents can continue to provide the personalized advice and service that has always been the heart of this profession.

What This Means for You

If you are a Medicare beneficiary, you might notice fewer agents offering to review your Medicare Prescription Drug plans or Medicare Advantage plans this year. It’s not because they don’t care… it’s because the rules have made it nearly impossible to do so efficiently or profitably while still providing the level of service clients deserve.

The good news is that you can still review and compare these plans directly on the Medicare.gov website. The site allows you to enter your prescriptions, preferred pharmacies, and ZIP code to find the most cost-effective options in your area.

IMPORTANT: Medicare Prescription Drug plans and Medicare Advantage plans are annual contracts and they can change from year to year. What’s good this year may not be so good next year and it’s important to shop around every year!

Shopping for and signing up for a prescription drug plan isn’t difficult. I made a short video this past year that explains how to choose and sign up for a prescription drug plan. If you’d like to watch the video, please click here.

Final Thoughts

The Medicare program is complex and constantly changing. Most agents truly want to help people understand their options, but the ever-growing CMS compliance burden has pushed many out of this side of the business.

Although I’m an independent insurance agent focusing primarily on Medicare Supplement insurance, if you’re looking for unbiased help reviewing your options, please don’t hesitate to reach out. Even though I don’t sell Medicare Prescription Drug plans or Medicare Advantage plans, I’m happy to help you understand how they work and guide you toward resources that can help you make the best decision for your needs.

In my next post, I’ll explain why many Medicare beneficiaries are actually better off by NOT using an insurance agent to help them select their Medicare Prescription Drug plan and how they can easily and safely select a drug plan on their own using the Medicare.gov website.

About the Author

As an independent Medicare Supplement insurance specialist, I work with all the major carriers throughout California, Nevada, and several other states. I shop around for my clients every year during their 60-day annual open enrollment period under the California Birthday Rule to help them save money on their Medicare Supplement premiums. Many of my clients have saved hundreds—even thousands—of dollars on the same exact plan and coverage! Please click here to see what my clients have to say about my services.

There is no charge for my services; I’m compensated by the insurance carriers, not my clients. My goal is to help you find the lowest premiums and provide the best personal service possible, year after year. Unlike many agents, I won’t disappear after you sign up!

If you enjoyed this blog and found it helpful, please leave your comments, questions, or feedback below and feel free to share this article with your friends!

Thank you!

Ron Lewis
Ron@RonLewisInsurance.com
www.MedigapShopper.com
(760) 525-5769 – Cell
(866) 718-1600 – Toll-free

Hey Seniors… If You Like Your Medicare Advantage Plans, You Can Keep Them, Period…Maybe Not!

obama-if-i-like-your-plan-you-can-keep-itSound familiar? Part of the Affordable Care Act (ACA), also known as Obamacare, aims to reduce federal payments to the Medicare Advantage (MA) plans over time, and these savings would help pay for some parts of the ACA. In other words, Obamacare is slashing Medicare and MA benefits, which will adversely affect seniors in order to pay for other new programs created under the law that aren’t even for seniors!

According to Robert E. Moffit, Ph.D., “The money is cut from hospital services, Medicare Advantage, skilled nursing services, hospice services, and other Medicare services. To be clear, the cuts do not target individual institutions or medical organizations suspected of waste, fraud, or abuse.” Moffit goes on to say that “The $716 billion in “savings” from Medicare are taken out of the program to pay for new spending in Obamacare. The cuts do not strengthen the Medicare program, nor do they extend the life of the Part A trust fund.” Consequently, the $716 billion that is being cut from Medicare will not enhance Medicare Advantage benefits, and there is speculation that these drastic cuts will also adversely affect traditional Medicare and Medicare Supplements as well!

One way it’s expected to do this is by requiring Medicare Advantage plans to have a “medical loss ratio” of at least 85 percent. This means the companies offering the plans would have to spend at least 85 percent of the money they get on actual medical care. In other words, insurance companies can use no more than 15 percent for administrative costs and profits. As soon as these changes were announced with the ACA’s passage in 2010, there were fears and rumors that this was the beginning of the end for Medicare Advantage plans.

Medicare Advantage PlanThe Centers for Medicare and Medicaid Services (CMS) recently proposed a 1.9% cut in Medicare Advantage payments next year. If these cuts are implemented, many fear that millions of seniors who currently rely on the Medicare Advantage program will lose the plans, benefits, doctors, and financial protection they currently have. Seniors and people with disabilities who are enrolled in Medicare Advantage plans would face premium increases and benefit reductions of $35-$75 per month, or $420-$900 per year. According to Oliver Wyman of America’s Health Insurance Plans (AHIP), these types of cuts could result in a “high degree of disruption in the MA market,” including the “potential for plan exits, reductions in service areas, reduced benefits, provider network changes, and MA plan disenrollment.”

In all fairness to the supporters of the Medicare Advantage plan cuts, Medicare Advantage plans were paid on average more per beneficiary than what Medicare paid for beneficiaries enrolled in traditional Medicare plans. One of the goals of the ACA is to equalize the federal spending over time, so the government pays the same amount whether a beneficiary enrolls in Medicare Advantage or traditional Medicare. Cuts to Medicare Advantage plans are part of the $716 billion in Medicare spending reductions the health law calls for over the next decade.

As an independent insurance agent, I work primarily with Medicare Supplement (Medigap) insurance plans, which is health insurance for people who are 65 and over. The alternative to Medicare Supplements is Medicare Advantage (MA) plans. Personally, I’m not a big fan or advocate of MA plans because they are much more restrictive than “original” Medicare Supplements. By that I mean you are restricted to the doctors and hospitals in the plan’s network. With Medigap plans, you can go to any doctor or hospital in the country that accepts Medicare, and if you develop a serious illness, you have much greater freedom and options, and you are not limited or confined to a specific network of doctors or a geographic area.

Health Care Reform2Medicare Supplements do not include prescription drug coverage. For that, you would have to purchase a separate prescription drug plan (PDP) called “Part D.” (“Part A” is hospital insurance, “Part B” is medical insurance, and Medicare Advantage plans are referred to as “Part C.”) MA plans usually cost less than Medicare Supplements and many MA plans include prescription drug coverage. Some of the MA plans also provide additional benefits such as dental, vision, and wellness, which are not covered by Medicare. For these reasons, enrollment in Medicare Advantage plans rose in 2014 by 8.9 percent to 15.9 million enrollees, which is up from 14.6 million in 2013. Obviously, these plans are still very popular.

As mentioned before, I am not too excited about MA plans because of the network and geographic restriction. If money isn’t an issue, I would recommend a Medicare Supplement plan over an MA plan. However, for many retirees, MONEY IS AN ISSUE as many seniors live on fixed incomes, and every dollar counts.

Because of the cuts, reduction of benefits, and increased costs to seniors, there is no question that millions of seniors who rely on the Medicare Advantage program will lose the plans, benefits, doctors and financial protection they currently have. And just like the ACA, this could cause another major disruption in the health insurance market and a lot of confusion for seniors and their family, which they really don’t need at this stage of their life.

Unless the proposed cuts to Medicare and MA plans are significantly reduced or eliminated, I think there is a good chance that many seniors will not be able to keep their MA plan, even if they like it, PERIOD!

What do you think?