Agents fight for Part D commissions

Medicare agents are fighting back against the recent decision by some health plans to discontinue paying commissions on Medicare Part D plans.

More than 600 agents signed a petition on Change.org, demanding that WellCare pay agents their commissions they earned from the sale of the carrier’s Part D plans. Health Agents for America posted the petition and circulated it among its members. HAFA is asking WellCare “to rescind its decision and to ensure that agents are compensated fairly for their work.

“HAFA argues that fair compensation is not just a matter of equity for agents—it’s a necessity for protecting the seniors who depend on them,” the association said in its petition. “HAFA’s message is clear: Without fair compensation, the system fails everyone—most of all, the seniors who need it the most.”

Meanwhile, the National Association of Benefits and Insurance Professionals issued a statement this week condemning the decision made by some health plans to stop paying Part D commissions.

“These decisions by health plans threaten not only the livelihoods of Medicare agents but also the communities they serve and the seniors who rely on their expert guidance to navigate the complex Medicare system,” said NABIP CEO Jessica Brooks-Woods in a statement.

Brooks-Woods said NABIP leadership reached out to WellCare/Centene senior leadership about the precedent they are setting in discontinuing commissions.

“We invite the leaders to talk about how these decisions will affect Medicare beneficiaries and their families. We are asking important questions and looking at all possible options to make sure our seniors and their trusted partners are protected,” she said.

Medicare Part D plans 'increasingly complex'

Brooks-Woods said Medicare Part D plans “are increasingly complex, requiring agents to stay current with ongoing training.

“These agents invest significant time in educating their clients, ensuring that seniors and vulnerable populations receive the personalized guidance they need to make informed healthcare decisions. Their work goes beyond enrollment, helping clients set up affordable medication options and resolving claim issues. For less than $4.60 a month per client, these agents are far from being money-driven; they are dedicated professionals committed to their clients’ well-being.”

HAFA cites Inflation Reduction Act

HAFA president and CEO Ronnell Nolan told InsuranceNewsNet said that carriers are using the Inflation Reduction Act as a reason for eliminating agent commissions on Part D plans. The Inflation Reduction Act imposed a $2,000 annual out-of-pocket spending cap on Medicare prescription drugs beginning in 2025.

“But not only is it cutting commissions, it’s removing the professional from that senior who needs help selecting Medicare Part D. We talk all the time about how complex it is to pick the right plan with the right medicine at the right price, and how people need an agent. Now WellCare has made this decision and said they’re going to blame it on the Inflation Reduction Act and they’re going to cut commissions.”

Nolan said her members told her they had signed contracts to represent WellCare during the upcoming open enrollment period before the carrier told them it would not pay commissions on Part D plans.

“The consumer deserves to choose a professional, if they want, and then the professional deserves to be paid. We shouldn't be asked to work for free,” she said.

Would have 'a chilling effect' on Medicare beneficiaries

Medicare beneficiaries would be harmed by the decision to stop paying Part D commissions, according to a statement by Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors.

“NAIFA is appalled by decisions that would have a chilling effect on Medicare beneficiaries’ access to personalize assistance by licensed professionals. NAIFA will work with the Centers for Medicare and Medicaid Services to communicate the implications of approving these prescription plans that will curtail personal service and offer solutions to protect our most vulnerable citizens," he said.

“There is no greater resource than a licensed agent or broker for consumers that are considering their Medicare plan options and looking for specific drugs and services to be covered. Agents and brokers educate clients on how Medicare works both broadly and in conjunction with other coverage options, research physician networks and prescription formularies for the plans to ensure a suitable health and drug plan is recommended. This decision could result in services being reduced or eliminated, harming consumers who rely on agents and brokers for their expertise and guidance especially as service needs arise after enrollment."

An agent gives his perspective

Mark A. Squires is president of Wise Choices Financial in Independence, Mo., and has worked in the Medicare market for more than 20 years. He told InsuranceNewsNet that most agents in the Medicare space are self-employed, or salaried with commissions paid to the agency.

"With Part D Coverage being a vital part of the Medicare puzzle, and arguably the most complex piece, Medicare beneficiaries need assistance in making sense of the maze of choices of coverage," he said. "Agents should not be expected to work without being paid. This leaves the Medicare population with few options other than doing their own research, contacting Medicare directly or contacting their SHIP. Neither Medicare personnel nor SHIP volunteers are permitted to make specific recommendations."

A huge part of the value agents and agencies provide to Medicare beneficiaries is ongoing service throughout the plan year, Squires said.

"In our organization, we refer to that proposition as 'lifetime claims support.' We document the service we provide and track the time used in servicing our clients, divided by product line. We invest more time per member on prescription drug plan questions and support than any other product line in our arsenal.

"Since we will not be paid, we cannot support the Medicare community."

Squires said his agency will continue to conduct prescription drug plan reviews for clients who have Medicare Supplements with a prescription drug plan.

"If the most appropriate PDP option based strictly on dollars and cents is one where we will not be paid, the agent will offer an A-B option. Option A is the plan the is most appropriate based on the dollars and cents with the caveat that we do not get paid, thus we cannot facilitate the enrollment. Nor can we provide any ongoing service in the plan year. Option B is a plan where we get paid and can offer a high level of service. If the member chooses Option A we will provide them with contact instructions for the carrier. If the member chooses Option B we will proceed as normal.

"This is not going to be good for the Medicare population."

WellCare did not respond to a request for comment from InsuranceNewsNet.

© Entire contents copyright 2024 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].