Medicare Advantage Providers Withdraw and Cut Agent Compensation
Medicare Advantage providers, including some major insurers, are beginning to withdraw from certain markets at an alarming clip. And many that remain are choosing to reduce or eliminate compensation for licensed agents who serve Medicare beneficiaries.
As a result, licensed agents who focus on Medicare policies may be wondering why so many providers no longer value the trusted advice that they provide to beneficiaries.
The problem first surfaced in April 2024, when the Centers for Medicare and Medicaid Services (CMS) issued regulations that revised Medicare Advantage and Part D agent and broker compensation. Those regulations went into effect in October of 2024.
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Late last year, the National Association of Insurance Commissioners (NAIC) sent a list of questions to CMS, raising concerns and questioning the agency’s handling of Medicare Advantage plans.
In response to a question about reduced agent compensation, CMS stated that they are only allowed to determine the maximum fair market value for initial and renewal enrollments, and that Medicare Advantage and Part D sponsors can determine compensation below that, even to $0.
CMS was explicitly clear that their regulations allow these health carriers to determine compensation levels up from $0 to fair market value but not exceeding it.
Earlier this year, in response to providers significantly reducing or eliminating agent compensation, the Big “I” voiced its concerns in a joint letter to Congress. In addition to raising concerns over these regulations with Congress, the Big “I” sent a joint letter last week to CMS Administrator Mehmet Oz expressing similar concerns and encouraging action.
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The Big “I” is working with an alliance of health agent groups including the National Association of Benefits and Insurance Professionals (NABIP) and National Association of Insurance Financial Advisors (NAIFA) to push back on providers that have decided to abandon Medicare beneficiaries and not recognize the valuable role that licensed agents play in the process.
As any progress on Medicare takes place, the Big “I” will provide members with updates in the weekly News & Views e-newsletter.
Corey Miller is Big “I” director of federal government affairs.
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