749(!) commenters chime in on CMS's proposed Medicare rule

The Centers for Medicare and Medicaid Services (CMS)’s proposed Medicare rule for 2025 kicked the proverbial hornet’s nest. Discussion is closed now, but it drew 749 public comments compared to the 30 or so made on the proposed Marketplace rule. And, for good reason: the rule has a lot to say about two areas we in the health insurance industry care about: agent income, and the support they might receive from their uplines, or Field Marketing Organizations (FMOs). Between agents, consumers, carrier reps, and FMO employers, a lot is being said. What was the overall message from these comments, and will it have any impact? We can’t answer the second part – yet – but, we can show you where the battle lines were drawn.

How did we gather this information?

We reviewed the comments submitted to CMS on this rule (yes, all 749). For our purposes, we omit inaccessible attachments submitted– 132 comments in all. That leaves 617 text entries to explore.

We played detective and asked ourselves:

• Is it even related to the agent/broker compensation portion of the rule?
• Does it focus on agent compensation, administrative payments, or both?
• Is the comment in full support, partial support, or completely opposed to the regulations?
• Is the commenter an agent, carrier rep, consumer, FMO employee, or unknown?

Here’s where the fun begins…

Who has something to shout about?

545, or at least 72.76% of all comments are related to the agent/broker compensation proposal. Who are these civic-minded souls?

• 359 rose their hands as health insurance agents
• 50 say they are consumers
• 32 FMO employees threw their hats into the ring
• One lonely carrier rep added a comment
• 56 are “unknowns,” – we are unable to confidently identify them based on their comment

What do commenters say about agent/broker compensation?

In two words: a lot. 

130 (23.85%) comments focus solely on this topic. Of the 40 consumers writing in, 31 are in favor of a hard commission cap for agents and brokers. 44 of 45 unknowns are also in favor. And, not surprisingly, 37 of the 45 agents with something to say completely oppose the rule, with only 6  in partial support.

Consumers, largely unaware of just how complex our industry is, see this as an opportunity to dump on bad experiences they may have had with agents or detail skepticisms of the Medicare world in general. And, more than a few think agents shouldn’t be paid at all (which seems impossible if you ask us, but that’s the world we live in). 

Agents, by and large, rail against the new proposed compensation cap. While they appreciate the increase, they largely contend that an extra $31 does not provide fair compensation for the administrative tasks they perform and business expenses they incur. Items like Health Risk Assessments, travel expenses, and ongoing customer service topped the list here.

What do commenters say about administrative payments?

The vast majority of comments (314, or 57.61%), tackle CMS’s proposal to remove the legal framework for administrative payments, specifically to FMOs.

And boy, do agents let them have it.

Of the 273 agents commenting on this topic, 232 are completely against it, with 34 in partial support. Those in complete opposition accuse CMS of fundamentally misunderstanding the Medicare distribution channel. They endorse the services these administrative payments enable: multi-plan quoting and enrollment technology, product training, sales and service support, and marketing programs. In short, they do a lot to dispel the myth CMS appears to have bought into: FMOs are back-room dealers, putting thumbs on the scale to drive enrollments in certain plans. In their eyes, eliminating admin payments would cripple uplines, which would impact the agents’ ability to present a variety of plans to beneficiaries. 

The 34 partial supporters are interesting here, too. They largely appreciate what CMS is trying to do here, but challenge CMS to separate well-meaning FMOs -- those servicing their agents -- from those simply taking the money and running (or hiding). Instead, they strongly encourage CMS to beef up its enforcement capabilities to punish those acting outside the regulations' letter and spirit.

Consumers, as you might guess, uniformly support the proposal. FMO employees, naturally, do not support the proposal. And neither does the lone carrier rep.

Does anyone talk about both proposals?

Yep. 79 comments (14.49%) address both aspects of the rule. 47 of the 64 agents writing in express displeasure with both provisions. The 15 partial supporters generally embrace the compensation cap as a way to level the playing field across carriers. However, they oppose eliminating administrative payments to FMOs for all the reasons mentioned above.
No other audience shows partial support – FMOs are uniformly opposed, and 72% of consumers/unknowns support both regulations.

What else do commenters talk about?

A small but vocal minority of 22 commenters (4.03%) oppose the regulations and instead attempt to educate CMS on the Medicare distribution channel, as well as the differences between independent agencies and the TPMOs that trot Jimmie Walker and Joe Namath out on every daytime TV channel (and then some). These agents accept CMS’s overall premise –  misleading advertising and disingenuous steering is bad for beneficiaries – but explicitly encourage action against these bad actors – not the entire industry. We couldn’t agree more.

Ok. But what does it all mean?

The hornets are abuzz. CMS heard from two main audiences: consumers who read the proposed regulations, assume that wrongdoing is widespread, and want the regulations enacted, like, yesterday. On the other side is an audience of industry insiders who fear the double whammy of a hard compensation cap and the loss of FMO support will force smaller and independent agencies out of the industry – leaving beneficiaries underserved, or worse, at the mercy of those unscrupulous call centers CMS was trying to protect them from. 

We, of course, can’t say for certain what CMS will do. But, we do know they are legally obligated to respond to these comments in their final rulemaking. Three key questions we’ll be asking as we read the final rule (and comment responses) this spring:

• Did industry efforts to educate CMS about the distribution channel make a difference?
• Will CMS crack down on rule benders, like call centers and those fast and loose with overrides?
• Consumers came out in (relative) force. How much weight will CMS give to their endorsement of the proposed rules?

It’s clear by now that current CMS policymakers are doing what they think will protect consumers. It’s unclear, however, whether they fully realize the downstream impacts of their rulemaking.