Legal Contract Signing
A new proposal in Congress would limit how Medicare Advantage organizations compensate agents and brokers who help beneficiaries choose coverage, while requiring greater transparency around payments connected to enrollment.
The discussion draft, introduced by Rep. Alexandria Ocasio-Cortez, D-N.Y., would amend the Social Security Act to require the Department of Health and Human Services to establish a maximum compensation amount that agents, brokers and other third parties representing Medicare Advantage organizations could receive in connection with enrolling individuals in Medicare Advantage plans.
The proposal would also expand what counts as compensation. In addition to commissions, the bill would include bonuses, gifts, prizes, certain reimbursements and other monetary or nonmonetary benefits provided in connection with enrollment.
During a June 10 House Energy and Commerce Health Subcommittee hearing, Ocasio-Cortez argued that compensation structures could create conflicts when beneficiaries rely on brokers to navigate Medicare Advantage choices.
"When someone turns 65, they are often inundated with all sorts of information about the different Medicare Advantage plans available," Ocasio-Cortez said during the hearing.
She argued that beneficiaries may not always understand the distinction between traditional Medicare and Medicare Advantage, which is offered through private insurers, and said broker incentives could influence plan recommendations.
According to the lawmaker's office, agents and brokers received $10 billion in compensation from for-profit insurers offering Medicare Advantage plans in 2022, up from $3.9 billion in 2014.
The proposal would also prohibit Medicare Advantage organizations from entering into or renewing contracts with agents, brokers or other third parties if those arrangements prevent them from objectively assessing and recommending plans based on an individual's healthcare needs.
Beginning in 2028, the bill would require Medicare Advantage organizations to report certain agent and broker information, including whether an enrollee was signed up through an agent or broker and the type and amount of compensation paid in connection with enrollment. Some aggregate compensation information would be made publicly available.
Supporters of the proposal say additional oversight could help reduce potential conflicts of interest and ensure beneficiaries receive recommendations based on coverage needs rather than financial incentives.
Broker groups have argued that agents and brokers play an important role in helping seniors navigate an increasingly complex Medicare Advantage marketplace. They say compensation supports consumer education, plan comparisons and enrollment assistance for beneficiaries who may otherwise struggle to evaluate numerous coverage options.
The legislation would need to advance through Congress before becoming law.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.