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“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,” Cheryl Clark writes at MedPage Today. “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. …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. … 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….

“Among the report’s findings:

  • Most brokers and agents in the focus groups said they received higher commissions for enrolling beneficiaries in MA plans compared with Medigap supplemental plans with traditional Medicare, and one said the commissions could be three times higher. They receive more from selling MA than they do selling a Medigap, even when adding in the commission they get from selling a Part D drug plan.
  • Agents said many plans offer bonus commissions as high as $100 per policy when an agent sells a benchmark number of a certain plan — say 20 policies in a 3-month period — and that can ‘create an incentive for a broker or agent to steer clients to a plan regardless of whether it’s the best one for their clients,’ the report said.
  • For themselves, most brokers and agents said they would reject MA plans in favor of traditional Medicare with a Medigap, ‘believing that combination offers better coverage and choices than Medicare Advantage, particularly as people age.’ Said one broker, ‘If I ever have a medical issue, I’d want to be able to go to any physician I want.'” Cheryl Clark, “Medicare plan commissions may steer beneficiaries to wrong coverage,” MedPage Today.

Jeanne Pinder

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...