ELLY GRIMM
• Leader & Times
Changes to the Medicare Advantage market have needed to happen for a while and recently, some action was taken to help with that.
Federal regulators have begun rolling out a series of rule changes aimed at tightening oversight of the Medicare Advantage market after a congressional committee found the average U.S. senior citizen paid nearly 10 percent higher, or more than $200, annually, for Medicare premiums.
Cristin Bishop Hopkin, chief operating officer and insurance expert for The Brokerage Inc., said work has been going on with making these changes for a long time.
“In 2005 when the modernization act of Medicare Advantage, was born as a law, that was really when we got into that business. Prior to that, we were selling individual health major medical Medicare supplements and a lot of life insurance and group health plans,” Bishop Hopkin said. “After 2005, Medicare Advantage became a product we were able to offer to our clients, and we were one of seven what they termed as FMOs, or Field Marketing Organizations, offered the United Healthcare contract. That launched us to really work across the United States.”
That pattern of growth, Bishop Hopkin said, is what increased the recently seen scrutiny.
“What we're seeing is as this reaches scale, it becomes a major line item for our federal spending dollars and I think Congress felt the pressure to step in. And from the side of insurance agents, I'm not opposed to it because there are some aspects that need changes,” Bishop Hopkin said. “We've had a lot of changes within the plans and it's too big not to ignore anymore. And this is a program I think everybody wants to see continue, and that means we've got to pour into it. We've got to figure out what is working, what is not working, and how can we make the program better so it does last for generations to come.”
Bishop Hopkin said there has been much adaptation taking place to accommodate the extra scrutiny.
“Compliance is a big piece we are just jumping into. I think everybody can agree we need oversight, we need to make sure we all are working for the same the same person, which is the client, at the end of the day,” Bishop Hopkin said. “As FMOs and agents, we're holding ourselves a little more accountable from a compliance oversight. We specialize in being in the field with our clients, so we like to sit across the kitchen table and work to understand what they are trying to accomplish with their health care. We want to make sure these senior citizens truly understand what they're enrolling in. We want to meet the client and discuss with them what's best for them and make sure they get into the to the right plan. I feel like carriers are also getting a little more conservative with their marketing and benefits that are being offered. There used to be all these TV commercials that said X plan had a $0 premium but left out the fine print, essentially, and those definitely aren’t around as much anymore. Agents now have a little bit more of a defined process that they need to follow in terms of making sure the client really understands the plan and the type of product they're enrolling in. And I think that's a good thing because there’s less chance for the client to feel misled. Carriers are coming out with commercials that are more educational to potential clients, and I love that because that’s what it should be about. The benefits themselves are also changing, and you're starting to see carriers step back from a certain market, or they're reducing a certain benefit, and I think all of that is just the market is maturing, and we're trying to figure out what makes sense, what's being utilized, what the clients need.”
With some of those changes, Bishop Hopkin said there will be some effects for senior citizens when picking out their plan.
“I think the plans are going to be a little bit simpler and it'll be easier for us to explain everything, and I think that's a good thing. I think a good insurance agent will be able to go into a market where maybe a plan exits, and be able to talk about a Medicare Supplement, which is a great option as well,” Bishop Hopkin said.
Bishop Hopkin said she is in support of the recent regulatory work, though there are still some improvements that could be made.
“I am very supportive of what’s been done so far, and I think we need to have a balanced place to land,” Bishop Hopkin said. “But I do think sometimes, with what is trying to get accomplished at the end of the day, we don't fully realize the effects. For example, in the Inflation Reduction Act, there's so many good things about that. But then, with the max out-of-pocket for drugs for seniors going down to $2,100, in turn, a lot of drugs, especially specialty drugs are very expensive. So now that cost is taken on by the carrier, and I don't think that was the intention, but that's what's happened. And now the carriers are having to go back and say ‘Okay, now I've got to take on a lot of cost, so where else can I pull from?’ And that, in turn, is where you're seeing, maybe some benefit reduction, or they're saying, ‘I'm not going to focus on this market’ or ‘I'm going to pull out of this market.’ And that's where you see some of that disruption, and it’s something we have to watch. I do appreciate how it's raising the bar for our industry. I think it pushes agents or agencies out of the business who are not really living and breathing our industry, which I'm okay with, because at the end of the day, it's about our clients, and we want the best insurance agent in front of them.”
Overall, there is a lot to watch out for, Bishop Hopkin said.
“I think the biggest thing is we know Medicare Advantage is not slowing down, it's really becoming a more mature market,” Bishop Hopkin said. “And with that maturity comes higher expectations for everybody involved. And I think that's a positive step for the future of the program.”
