The Centers for Medicare and Medicaid Services have proposed new rules governing the sale and solicitation of Medicare Advantage plans.
Medicare Advantage plans are private health plan options, sometimes referred to as Part C, that provide all Medicare-covered health care to those who have Medicare Part A and Part B. These plans sometimes include coverage for prescription drugs. Prescription Drug coverage (Part D) is also included in some of the new proposals.
These new proposals would:
- Ban door-to-door and cold-calling solicitations
- Prohibit sales activities at health fairs
- Prohibit sales activities in waiting rooms of health care facilities
- Level commissions for the first two years on Medicare Advantage and Part D
- Require training on federal regulations governing Medicare products
- Prohibit cross-selling of non-health products to Medicare Advantage and Part D enrollees
Though door-to-door solicitation is currently banned, the proposed regulations on sales activities at health fairs and non-service areas of health care facilities would make the prospecting and sale of Medicare Advantage and Part D plans more difficult. Health fairs and activities at health care facilities are a major component of how Medicare beneficiaries get information on the options available to them. “Overall, it’s a good step in the right direction to provide consumers with enhanced peace of mind,” said Mohit Ghose, spokesman for America’s Health Insurance Plans of Washington. “But we believe there needs to be a line of demarcation between going to a nursing home and having a health fair.” “It’s unclear as to whether or not a lead can be generated at a health fair, but members who participate find it’s a good way to get general information to the population,” said Jessica Waltman, vice president of policy and state affairs at the National Association of Health Underwriters in Arlington, Va. “Sometimes, because of a person’s living situation, agents might set up a meeting with them almost immediately.”
The proposal to level commissions on Medicare Advantage plans for the first two years is intended to discourage the “churning” of member policies to generate new commissions. Currently, most Medicare Advantage plans pay a higher first year commission.
A Training proposal would require all agents who sell Medicare products to receive training on the federal regulations that governs those products. They also would be tested on the rules. This, presumably, would be a single federal test to replace the individual carrier tests that are in place currently.
Finally, the final proposal would prohibit agents from cross-selling non-health-related products to Medicare Advantage and Part D enrollees.
AHIP and the National Association of Health Underwriters support CMS’ intent to protect seniors and Medicare beneficiaries, without restricting access to service from an insurance agent and information on the plan options available.
“The proposed rule, which prohibits the sale of more than one product at a single client meeting, would eliminate an opportunity for legitimate sales and raise the possibility that an agent couldn’t optimally serve the customer”, Ms. Waltman said. “For instance, if a client asked to meet with his life agent about Medicare Advantage and at that meeting requested a change to his life insurance coverage, the agent wouldn’t be allowed to make the change. “
“There is no protection to create a safe harbor for agents with existing clients to allow them to address their existing problems,” Ms. Waltman said. “We don’t want to put agents in the position of liability because the person asks a question,” Ms. Waltman added. “Are they not supposed to help the clients?”
“Feds propose tighter Medicare Advantage sales rules” by Darla Mercado, Investment News.com
“UPDATE: U.S. Medicare to tighten rules for private plans”, Thompson Reuters
“Medicare Program; Revisions to the Medicare Advantage and Prescription Drug Benefit Programs”, Department of Health and Human Services, Centers for Medicare & Medicaid Services