The Centers for Medicare & Medicaid Services (CMS) has introduced a proposed rule, CMS-4205-P, aimed at amending current regulations for Medicare Advantage and Part D programs. This proposal, set to take effect for the 2025 contracting year beginning September 30, 2024, includes significant changes in Medicare marketing and communications policies, particularly concerning agent and broker compensation as outlined in Section 1851(j) of the Act. These changes are expected to have a substantial impact on the Medicare sales distribution landscape.
We recognize that this approach could have some drawbacks, particularly as this policy would, in effect, leave agents and brokers unable to directly recoup administrative costs.
– The Centers for Medicare & Medicaid Services
These changes impacting FMO/Agency support, training, technology, and other items will impact beneficiary choice by reducing the agents that are not only offering Medicare Advantage but offering a wide variety of plans. In essence, this rule will have the opposite effect of what is being put forth.
In addition, the notion that small regional plans are getting anti-selected just does not stand up to what we see in the market. The free market year over year has varying top carriers including what regional carriers increase market share. The best plans for individual Medicare beneficiaries are what will continue to drive what plans are sold, period.
Key Aspects of the Proposed Rule Involve…
Eliminating Administrative Fees/ Overrides
The proposed rule intends to abolish compensation above the CMS maximum for individual agents/brokers, including overrides/admin fees paid at agency levels and higher. This could significantly affect agencies, especially those at the FMO/NMO level impacting the support, technology, and services being provided to agents. Find additional details on the Pinnacle 2025 Proposed Rule page.
Restrictions on Services Provided to Medicare Agents
Agencies and uplines may no longer be able to offer services such as quoting, enrollment platforms, such as Connecture and Sunfire, CRM software, support services such as website creation, logo designs, compliance guidance, discounted E&O and CE’s, marketing plan guidance, and agent/agency contracting.
Impacts on Different Agency Types
While all agencies would be impacted, LOA agencies and those focusing on ancillary product sales or who offer Medicare as a secondary service might find it easier to adapt to these changes. Agencies that are heavily focused on Medicare Advantage will be greatly impacted.
Changes in Marketing Reimbursements & Health Risk Assessments (HRA) Fees
The proposed rule plans to prohibit reimbursement payments/marketing allowances to agents/brokers for expenses and eliminate payments for completing HRAs.
Modifications in Commission Structures
Commission rates would continue to be standardized. This would include a small administrative increase that would in no way compensate for all of what would now be needed by agents.
Operational Adjustments for Agents & Agencies
The absence of uplines could necessitate direct contracting with carriers by agents and agencies, potentially leading to delays. Additionally, questions usually addressed by uplines must be directed to the carriers. If, and how quickly would carriers staff up to meet the huge demand of contracting, certifications, product training and more.
Our Industry’s Voices Need to be Heard
The CMS-4205-P proposal is a comprehensive document addressing these and other areas, detailed over hundreds of pages. The proposal is open for public comment until January 5th. CMS encourages professional and constructive feedback, particularly focusing on the value provided to clients and the potential impact of these changes on service capabilities. Comments can also be submitted through Regulations.gov.
What about Pinnacle?
Our team at Pinnacle will continue to be there to support your business and have made available resources for you to navigate and understand the 2025 Proposed rule and how it will impact not only your business but your Medicare clients. For more information, go to our 2025 Proposed Final Rule page for more detailed information on the rule and how to comment.
Reach out to a Pinnacle team member today with any questions.
1 (800) 772-6881 x7731 | sales@pfsinsurance.com
Bob Brzyski
Vice President, Marketing
Contact a Pinnacle Representative if you have any questions.
1 (800) 772-6881
support@pfsinsurance.com
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Marc Spira
7 Virginia Street
Valley Cottage, NY 10989
(845) 709-7384
marcspira@gmail.com
January 4, 2024
To whom it may concern,
I am a licensed insurance agent who has been working in the medicare market since 2011. Prior to beginning my career in insurance, I was a Director for a Fortune 100 company. During that time frame, I had a number of employees whose lives were upended by the complexities of the medicare world when their loved ones aged in. It was at that time that I became interested in understanding this very complicated industry. I have found the work extremely gratifying, knowing that I am truly helping people understand their options and explaining them in an unbiased manner that alleviates the stress and hours of work required to make an educated decision that optimizes the benefits that medicare can provide for each of my clients, individually. To date, I work with approximately 500 clients who primarily reside in New York, New Jersey, and Connecticut.
CMS has proposed a rule that would eliminate payments to FMOs. In my opinion, this would be an absolute disaster for independent agents, such as myself. It would remove all technical and marketing support, in addition to some of the financial support, that I have received that has truly contributed to my success as a Medicare Specialist. My FMO has organized seminars for me, taken care of all approved marketing materials, and, in the last few years, has provided technology that has made it possible to visually demonstrate all of the options available to my clients in a succinct, organized manner. They have also provided recording technology that allows me to be compliant at all times. Without my FMO and the benefits they provide, I would struggle to replace the technology and marketing support that has been so flawless to date. I am not sure if I could actually remain in the business if this support is taken from me.
I ask that you request that CMS not eliminate administrative payments to FMOs and allow specialists, like me, to continue to make a difference when it comes to advising Medicare clients in this complex and confusing market. In closing, I chose this career as it allows me to be accountable to my clients, only, offering them the best advice regarding coverage for their individual needs.
Thank you for your prompt attention to this serious and pressing matter.
Sincerely,
Marc Spira
Medicare Specialist