Another Health Plan Cuts Commissions — Is there a trend developing?
Is there a trend developing with health plans and their offerings under the Affordable Care Act (ACA)?
Raising rates, high-risk members, and cutting agent commissions continue to be challenges for all health insurance companies offering plans under the ACA. Some of the big plans still in the game say it’s too early to bail out, and they see the ACA as a big opportunity. But late last year, one of the largest health plans announced they would be pulling out of the ACA business. Following this news, multiple non-profit Co-Ops announced their closure, and, most recently, another large health plan providing ACA products is following suit, announcing late February they would be cutting commission on sales of individual health plans. We can all agree changes in the structure of the individual market need to happen, but how fast can these changes be made and still accomplish profitable enrollment goals?
With fewer options, will agents still be a necessary resource for the prospect?
In the last year, we have seen several health plans pulling back on their marketing and reducing the number of choices for the consumer. It appears health plans are still trying to figure out how to price the products and if they should pay commission to agents or have the prospects use online tools to navigate their health care options. Meanwhile, agents are left with less in their pockets and wondering if there is still an opportunity for them in the ACA.
If agents generally sell plans within the Marketplace, and these continue to dwindle, where will that leave the agent? With the uncertainty of how big plans will navigate the complexity of the ACA, it is anticipated that agents will redirect focus to Medicare for 2016:
Reason #1 — No doubt the Medicare space offers unprecedented opportunity! With the growing number of Baby Boomers, health plans and agents continue to see limitless earning potential (nearly 10,000 people turn 65 every day).
Reason #2 — Commissions for Medicare Advantage (MA) are typically paid on application submission for some of the large plans and include lifetime renewals, which means agents and agencies get paid as soon as an application is submitted, and, after 13 months of enrollment, the agent and agency receive a prorated monthly commission for the life of the policy.
Reason #3 — Year-round selling opportunities. These days, it’s not just about the open enrollment period — many agents find a great deal of opportunity with the dual-eligible (Medicare and Medicaid) population, as these individuals can enroll year-round.
Don’t get distracted by the ACA crisis, focus your time and energy on building a sustainable business in Medicare. For more information about Medicare, Field Marketing Organizations (FMOs), and year-round selling opportunities, please contact:
Carrie Barker-Settles
Director, Sales & Marketing Services
Gorman Health Group
cbarkersettles@ghgadvisors.com
Resources
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