Inside the Industry: Navigating the Medicare Commission Cuts with Marcie Strouse
Inside the Industry is a recurring video series hosted by AgencyBloc to take an insider's look at the health, group benefits, and senior insurance industry. Learn more about what's happening right now, what it means for your agency, and how your team can stay ahead of these changes.
Transcript for the Episode
Note: AB denotes Allison Babberl, and MS denotes Marcie Strouse.
Allison Babberl: Welcome everybody. My name is Allison Babberl. I'm the Content Marketing Manager here at AgencyBloc, and I'm joined for our next edition of Inside the Industry with Marcy Strouse, Co-Owner and Producer for Capitol Benefits Group. Thanks so much for joining me today, Marcie. I know we've been talking a lot about these changes with UHC and the cuts to commissions and how frustrating it is for the agents. So do you want to kind go over what's happening and why it's like a really frustrating thing for agents but also for the carrier side?
Marcie Strouse: Yeah, yeah, thank you. So, yes, thanks for the opportunity to come on and talk about this. This is such an important topic for us in the agent community. I think the frustrating part for us is sometimes the trickle-down effects or the unintended consequences of legislation tend to drive things in the market. And as agents and brokers, we have had to be adaptable and be willing to jump in even when things are not necessarily the easiest for our members and our clients and especially us as agents. And so with the Inflation Reduction Act came some changes coming into 2025. And with that, that really upset that Medicare market and made it a little bit more difficult to keep premiums down. And some of that is due to the fact that one of the biggest pieces is that we have this now $2,000 out of pocket cap in the plan.
And so that piece of it, I think, was not necessarily intended by CMS regulations to be a $2,000 cap, meaning the retail cost actually impacts that. So for instance, if you have a $2,000 drug, but maybe your cost share is only $500, month one, you have now met your $2,000 cap, even though you only paid $500 out of pocket for that. So we actually feel like that could have been an error, and maybe it was supposed to be a true out where people are paying $2,000. However, regulations are regulations. And so when that happened, of course, all the carriers had to really adjust for risk. And we had a lot of plans in the market that were very minimal premiums. For instance, we had a plan that was like a $5 plan here in Iowa, one that was a 50 cent plan here in Iowa. We actually saw those premiums increase quite significantly. So a $5 monthly premium was going up to a $40 monthly premium.
And so it did create a lot of issues in that market, but then of course, unfortunately, agents tend to be the first on the chopping block. So if a carrier comes in and realizes like, my gosh, our risk is increasing, and now all of a sudden we have to really increase our premiums, now how do we actually justify or, you know, make it reasonable to also give a cut of that to the agent? And I would argue all day long that the value that we provide is like nothing else. And so sometimes it's, like if the agents just completely left this market, CMS would be absolutely up in arms if they had to actually deal with the regular service stuff that we deal with on a regular basis. And a lot of that, too, is that beneficiary market. You know, so these are people that are in our communities. A lot of them are family members to us or, you know, family of friends. And so we are building these really important relationships and that market can be very scary to them coming into it initially. And then as changes happen from year to year, you have to remember that these people are living on budgeted incomes. For the most part, they're retired. And so for them to have something really big come in and change that can be very scary for them. So again, that value of the agent is so, so important. We are there advocating for them. We are fighting for them with the carrier. So if a claim doesn't get paid appropriately, or maybe a benefit doesn't get applied appropriately, then we can come in and help to be that advocate where they're not managing that system completely on their own. you know, it's frustrating again that the commissions are being cut, but, you know, we've seen through over the last several years where just through regulation changes that, you know, in Iowa we had, I think it was over 50 carriers at one point or 50 plans that were available in the PDP market. Now it's down to like 7 carriers and like 15 plans. And so unfortunately, it just removes competition. And we don't want to see that either. We really want to have a competitive marketplace. But unfortunately, these things are happening. for us, again, like I said, we have to adapt. We have to figure out ways that we can support that beneficiary, but then also just our communities in general.
AB: Definitely, and you know, I think it's such an important thing for agents to realize their really crucial role in this market and use their voice to tell their carriers, tell their uplines, tell their senators, tell everyone the real need. I know personally, the agent I have for my insurance is amazing. I can call them day or night. I can always ask them my dumbest questions to make sure I fully understand what's going on.
And I have friends, have people I know that they don't even know who their agent is. And they ask me questions because they know I work adjacently to the health insurance industry. And I'm like, well, ask your agent. They're like, well, I don't know who it is. We have to call this 800 number and I have to put on hold and all of this stuff. And I always get a different person when I call in. And it's really frustrating. And I think you're right. CMS would never want to deal with that. So it's so unfortunate where we are right now with these cuts, but what are some steps that agents can take to maintain their profitability with the enrollment season coming up? We're only a few months out. I know cross-selling is a big thing, but what are some other ways agents can maintain their profitability into this enrollment season, even looking at some of these commission cuts?
MS: Yeah, I think that's a great point. you know, obviously, whenever you're working with any anybody in this health insurance space, you're always looking to see, know, how can we manage risk for them? So, you know, looking at policies that might help along the long term care side of things. And that can be a little bit more challenging once they're already into that Medicare space. But there are some products out there that agents can look at to help to support that. The other thing, too, is these some of these like dental and vision policies that are out there, you're not going to get a huge commission, but when you're looking at that, then you actually have the ability to at least round out any of those specific needs that they have. so cross-selling is always something that is important. I just would really go back to the fact that we do have to use our voice. We have to be talking to not only our state legislators, but federal legislators.
And so what I would encourage agents to do is, first of all, don't be afraid to reach out. Typically on the federal side, staffers are truly amazing and they really know and understand all of the details of what's going on. But they're always looking for true, you know, actual stories that are happening within their communities to understand these impacts. Because a lot of times it could take a year or two for that trickle down effect to really fully understand the challenges that are happening. And so, you know, we've had some agents come to us and we've tried to work with the insurance division. Well, are we able to just charge a consulting fee?
The other too to just remember, if you're selling PDP plans, is really where that impact is the most, hitting us the most is those prescription drug plans. Because again, typically those premiums are pretty minimal anyway, so they're just thinking we're just gonna cut this off and not pay the commissions. But in most situations, your Medicare supplements are paying a good chunk of a commission to you. So like our philosophy here at Capital Benefits Group is if we actually have your supplement and your drug plan, we're gonna still do that review for you. And it might actually look a little bit different from year to year, because if we're not receiving a commission, we might just be helping you walk through that Medicare.com process and enrollment, but we're really not ever gone from the equation. So again, this is like our superhero, right? Like we put on our cape and we recognize that these are people that are important to us in our communities. And so we wanna do that. The other thing too that I think is gonna be important for people to take a look at is as you start to see, especially in the MAPD, so that Medicare Advantage market, if you're starting to see them, pull back now on commissions or you know, maybe July 1st or sometime within the year, that probably is a pretty good indication that that might not even be a plan available next year. So again, we have concerns about that market shrinking and not having competition. And so we have to change the regulations is ultimately what it comes down to. We actually have to use our voice. We have to make sure that these things are being done because a consulting fee, I will tell you right now, the federal really don't even allow you in the Medicare space to charge a consulting fee, even if you're not paying, being paid a commission on that. we would rather than go down that path, we would rather just focus on how do we actually make that meaningful change and help them to understand. And the one big thing we can do is share those testimonials and share those client stories that we have.
AB: Yeah, and I think another really essential piece is looking at your book of business. Where can you strengthen those relationships, like you said, with cross-selling, double up some of those policies, make sure your clients have every policy they need to be protected, and they're all coming from you, if possible. I think the other thing is really looking at your commissions, tracking your commissions. I know you've told me in the past, Marcie, that you've worked places and you weren't even sure you were getting paid or paid appropriately or you know, you're keeping your fingers crossed that the carriers are right and the carriers are just as prone to error as you and I are and it's really critical that you're watching that. So looking forward into this new season, understanding the makeup of your book of business, where you can strengthen those relationships, and where you can really do your due diligence to ensure you're getting your commission payments. Because yes, they're being cut, they're dwindling. You want to make sure all the money you have coming in is correct because at the end of the day, this is your livelihood. And I think that's a really critical piece as well.
MS: Yep. I would second that and I will tell you my business partner, Tracy, she lives in the commissions world. She kind of insulates me from that so I thank God for her every day. But you know, she loves that piece because she can actually review and see if we are missing commissions. The other thing too is when the marketplace switching issue was happening, she was able to keep an eye on that and actually catch that a little bit sooner than some of our clients even realized that it had happened to them. And so for us, it helped us to
more proactive and engaged with our clients. But then too, yes, every dollar counts. And so making sure that you are getting paid and you're holding those carriers accountable to make sure that you're getting paid I think is critical. That is a very, very vital piece as well for sure.
AB: Yeah, and you saying that with the market shrinking, which is never what you want to see, the more options, the better, because that makes everyone have to work harder to provide better options and plans and more availability. knowing which ones are going away, having that key information of, shoot, I've had an MAPD through this carrier for this subset of my clients, and knowing that's going away is essential because you wanna be able to identify who those people are that will be affected and move them right away so they don't even feel that change, they don't feel that lapse, they don't get frustrated with you saying, hey, why don't I have coverage? Why am I having to wait? It's instantaneous because you already see it, you already know about it, you can act on it sooner. That's gonna build those client relationships for you and improve your client retention.
MS: Yep, absolutely. And we actually use the AgencyBloc workflows for a lot of our communications. Of course, we do all of that through the normal AEP season, just getting just the normal things out. Now with RxCollect, we're really excited to have all that information coming in. And so that is extremely helpful, but you're exactly right. So we get some big alert and especially around legislative changes that happen. does also make it very easy for us then to get a communication out and blanket everyone if it's something that's going to actually impact all of our message. Medicare beneficiaries. So we want to make sure we're on the front end of it and we're not waiting until we're hearing from our clients because that is going to cause stress and frustration and just, you know, a lot of unintended maybe feelings on the matter. But again, sometimes we don't have a whole lot of time. Meaning, something can be thrown at us. Last year was super frustrating. We were waiting until the very last minute to really fully understand those regulatory changes. And so it doesn't give us a whole lot of time.
I feel like as a Medicare agent and a lot of Medicare agents probably feel this way, it's like parkour everywhere. You you just have to be ready to jump and bounce and move from place to place and you just have to do it. You have to just get it done because you need to be there because really your clients need you. They rely on you. They trust you. And so we just need to make that voice extremely loud for all of our legislators to completely understand and not let them take us out of the equation. It is very important for us to be involved.
AB: Well, thank you, Marcie. Thanks for all the insights and we'll see you here next time for our next edition of Inside the Industry.
Posted
on Thursday, July 3, 2025
in
Inside the Industry
- commissions
- industry news
- open enrollment