New proposal would standardize broker commissions, add mental health services and more

The federal government is continuing its efforts to protect older Americans signing up for Medicare coverage for the first time or switching to a new health plan during open enrollment.

Among the enhancements included in a proposed regulation that could go into effect in 2024, commissions for insurance agents and brokers who enroll beneficiaries in Medicare Advantage (MA) plans, the private insurance alternative to original Medicare, would be standardized. This move is designed to deter agents and brokers from pushing beneficiaries toward those MA plans that pay higher commissions.

The role brokers and agents play in helping enrollees decide what Medicare plans to sign up for is key, especially during the annual open enrollment period, which runs Oct. 15 to Dec. 7. The Centers for Medicare & Medicaid Services (CMS) has made several moves this year to try to make sure consumers are getting accurate and fair advice.

Medicare cracks down on misleading TV ads

Already in 2023, CMS announced a crackdown on misleading advertising. The agency reviewed 2,323 television ads between May 1 and Oct. 23. According to CMS, it refused to approve 22 percent — or 521 — of the ads.

Anyone regularly watching broadcast or cable TV will have noticed that this year some of the celebrities who in past open enrollment periods have flooded the airwaves, including former Star Trek star William Shatner and comedian Jimmy Walker, are virtually nonexistent. Ex-NFL quarterback Joe Namath has still appeared in some spots, but his pitch is considerably toned down.

“By prohibiting certain TV ads, cracking down on predatory marketing practices, and putting into place new requirements for plans, agents and brokers, and third-party marketing organizations, among other efforts, we can ensure people have the information needed to make the best health care choice to meet their needs,” Meena Seshamani, CMS deputy administrator and director of the Center for Medicare, says in an emailed statement.

Standardizing commissions

Under the proposed rule, broker and agent commissions for the sale of a Medicare Advantage plan would be set at $642. Currently there is a $611 cap on such payments, but because that’s just an upper limit, not a fixed amount, CMS says commission amounts vary — and that may be leading to consumers’ not getting the best advice.

“Financial incentives to agents and brokers, more readily paid by large plans, can result in beneficiaries being steered to some Medicare Advantage plans over others based on excessive broker and agent compensation and other bonus arrangements — rather than recommending plans based on the prospective enrollee’s best interests,” CMS officials say in a fact sheet explaining the proposed regulation.

If that provision of the new rule is adopted, says Brendan Rose, an AARP government affairs director, “it will allow enrollees to have greater peace of mind when they’re engaging with a broker or an agent that they’re not being steered into a product that may not be right for them.”

Other proposed changes

Rose says there are other aspects of the proposed rule that are important for Medicare Advantage enrollees to be aware of.

Mental health coverage. The proposed regulation requires that Medicare Advantage plans pay for services provided by marriage and family therapists as well as mental health counselors.

Original Medicare recently added these therapists and counselors as providers whose services Medicare would cover. According to CMS, about 400,000 of these providers will now be eligible to enroll in Medicare and can begin billing the program for their services on Jan. 1, 2024. The proposed regulation would add a new coverage category for MA plans called Outpatient Behavioral Health, and those providers would be included in that category.

“This rule will provide an incentive to MA plans to expand their networks to include these types of therapists, which they don’t include now because Medicare hasn’t paid for them,” Rose says.

Extra services status report. Medicare Advantage plans would, under the proposal, be required to send each one of its enrollees a letter six months into the year informing which supplemental benefits they are entitled to but haven’t yet accessed.

CMS says that while more than 99 percent of MA plans offered at least one supplement benefit to Medicare enrollees, and most often provided vision, hearing, fitness (usually a gym membership) and dental services, a low number of enrollees actually take advantage of these benefits.

“To ensure the large federal investment of taxpayer dollars in these benefits is actually making its way to beneficiaries and are not primarily used as a marketing ploy, the proposed rule requires Medicare Advantage plans to engage in minimum outreach efforts so that enrollees are aware of the supplemental benefits available to them,” CMS says in a statement. The letters would also be required to clearly explain the scope of each supplemental benefit, any out-of-pocket costs enrollees would have to pay to take advantage of these benefits, and whether there are network providers associated with each benefit. The plans also would have to provide a customer service number if beneficiaries have questions.

Rose called this “a commonsense proposal that would remind you of what your extra benefits are and how you can take advantage of them.”