The following is an excerpt from MedPage Today.
Agents and brokers who sell Medicare plan coverage often steer their clients to a Medicare Advantage (MA) plan because it earns them a higher commission compared with a Medigap supplemental plan with traditional Medicare that might better serve the beneficiary’s needs.
That’s the finding from a new Commonwealth Fund report that was based on responses from more than two dozen sellers of MA, Medigap supplemental, and Part D plans who participated in focus groups the fund organized in September 2022.
For example, one California broker was extremely candid: “A lot of times … you’re pushing an Advantage plan when someone wants a freedom of choice [of doctor], which would be a supplement plan,” the report said.
Incentives that are misaligned with that of the beneficiary “have financial consequences for beneficiaries, can affect beneficiaries’ coverage options down the road, and can affect Medicare spending,” Gretchen Jacobson, vice president of the Commonwealth Fund’s Medicare program and an author of the report, told MedPage Today.
“Ideally, [the system] should be more transparent on how brokers and agents winnow down choices,” she said.
The report is a timely one as nearly half of Medicare beneficiaries are now enrolled in MA plans, and as federal regulators try to tamp down MA fraud and denials of care, as well as higher per beneficiary spending for MA enrollees compared with those in traditional Medicare.
While brokers are required by a 2022 federal policy to inform clients that they don’t sell all plans in their area, they’re not required to reveal how many plans they sell or which ones, the report noted. There is no minimum number of plans they must search for a client nor is there a requirement that they disclose the names of the plans they searched.
Brokers said that in addition to commissions, another factor that influences their decision on what plans they offer clients is whether the plan made it “easy for me to work with.”
Along with a lack of information about how brokers narrow down plan options, beneficiaries lack information on “what role financial incentives might play in the advice they give,” the report said.
Read more about report’s specific findings here.
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