Where a Medicare Advantage Broker Comp Proposal Falls Short

For anyone who’s been in the Medicare insurance industry as long as I have, especially those who’ve worn hats from agent to marketer to field marketing office owner, you know that change is a fact of life.

But what I’ve been most heartened about all these years is that, despite everything thrown at us — from new regulations, to constantly changing technology, to a more fragmented consumer environment — we keep moving our industry forward: for our agents, our businesses and, most importantly, our clients

FMOs are product distributors that provide support services for agents.

But we’re more than that. We’re also coaches, and supporters.

I’m proud to be part of a nationwide FMO community that’s working tirelessly to ensure that, no matter the changes we face, agents feel supported and empowered to grow their businesses and deliver peace of mind to their clients.

That’s the essence of the agent-FMO relationship: the understanding that we have the agents’ backs — and, by extension, their clients’ backs — when it comes to helping them find the right coverage for their unique needs.

Now, unfortunately, our ability to do what we do best for our agents is being threatened, and this time, it’s not from outside forces, but from those within our own industry.

The ACHP Proposal

The Alliance of Community Health Plans, a group for nonprofit regional health plans, has released a package of proposals that includes a strict cap on the amount of support a Medicare Advantage plan can provide an agent or broker, on top of the existing federal limit on sales commissions and other producer compensation.

ACHP claims that some producers get too much cash from some plans, and that this may lead to those producers steering clients toward the plans that spend the most on sales support.

Let me be clear: We all share a desire to improve the Medicare Advantage program and ensure that agents and consumers alike are protected from bad faith actors and suspect practices. But ACHP’s latest recommendations aren’t the way to achieve that.

ACHP’s proposal of a cap on total broker compensation is misguided and disingenuous, and not only risks negatively impacting the valuable support that agents deserve, but consumer choice and protection, too.

First, it’s important to remember that the broker commission per enrollment maximum is set by the Centers for Medicare and Medicaid Services, the agency that sees the Medicare and Medicare Advantage programs, as a fair market value item. Period. End. Stop.

In truth, what ACHP is proposing — in particular, its suggestion for capping administrative fees — will undercut FMOs’ ability to provide the value-added services that so many agents rely on to serve their clients.

The Tools

Conveniently, the ACHP proposal will actually “steer” consumers towards ACHP members’ preferred plans, which are often limited in scope and may not be in consumers’ best interest — depriving the consumers and their trusted agents of the opportunity to consider the breadth of options available to the consumers in their areas.

One example is quote-and-enroll software tools.

All true FMO partners offer these tools to their agents, which show all available plans in a ZIP code and include features such as searchable information about a plan’s doctors, other care providers and prescription drug benefits.

These tools position agents to make sure the product they present is the most comprehensive choice for their clients.