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Proposed Medicare Changes That Could Affect Agents

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As an insurance agent, you are the heart of distribution for carriers, providing a gateway of knowledge and understanding to consumers. The value of that service is the reason agents are compensated by carriers.

Our role as an FMO is to provide our agent and agency partners with the support they need, including keeping folks up to date on impactful policy changes.  There are proposed changes to the Medicare Advantage program for the year 2025, and if instituted, these changes will have a monumental impact on insurance agents, agencies, and FMOs.  Below, we have outlined how those changes could impact you:

**Limitation on Agent and Broker Compensation:** The Centers for Medicare & Medicaid Services (CMS) has proposed a rule that would cap the compensation that agents and brokers can receive for enrolling Medicare beneficiaries into Medicare Advantage plans. Specifically, commissions would be capped at $632, starting with the 2025 plan year. This change is a significant shift from the current structure and could impact the earnings of agents and brokers.

**Changes in Broker Support Services Payments:** CMS has proposed eliminating the current administrative support services payments and replacing them with a different structure. This could affect the way General Agencies that service brokers and agents are compensated for their administrative and support services, including marketing assistance, reimbursements, and co-op.

**Stricter Marketing Rules:** Medicare Advantage insurers are facing new regulations governing marketing, which could impact how agents and brokers promote these plans.

**Concerns Over Circumvention of Payment Rules:** CMS has expressed concerns that some Medicare Advantage plans might be compensating agents and brokers in ways that may circumvent existing payment rules. This could lead to stricter enforcement and potential changes in compensation models.

**Overall Policy and Technical Changes:** The proposed rule for Contract Year 2025 includes various policy and technical changes to the Medicare Advantage program, which could have broader implications for how agents and brokers operate within this space.

The claim is these changes are aimed at promoting competition, transparency, and health equity in the Medicare Advantage program. However, the reality is, these changes will bring significant adjustments to the way insurance agents and brokers operate, particularly in terms of compensation, marketing coops, marketing reimbursements and how they are able to operate and sell.

If you’d like to read the complete fact sheet from CMS on changes to Medicare Advantage and similar plans, you can find it HERE.