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Dwane McFerrin, Senior Vice President, Med Solutions, at SMS answers questions about whether the future for insurance agents working with Medicare is promising, what the future for Medicare Supplement in particular looks like, and how new regulations might impact licensed insurance agents.
Q. It appears Medicare Supplement, Medicare Advantage and Medicare Part D are destabilized. What does the future hold for independent insurance agents working with Medicare? Is the future promising for independent insurance agents selling Medicare?
A. You know, I've been in this industry now for over 40 years, and the one thing I've learned is when there's change, there's opportunity. And so as we've seen a destabilized environment, it becomes an opportunity. You should expect to see change in your career. And whether it's Part D, Medicare Advantage or Medicare Supplement, things have a way of going in three-year waves. And, it only takes extra reimbursement from the government, a regulatory change, and the environment is totally changed. So I guess I would encourage you to keep working hard, and good things will happen. The one thing about Medicare is it's recession-proof. And the demographics are working in your favor. And so I don't have any reason to be anything other than bullish about our future.
Q. Medicare Supplement rate increases have been quite high, and there have been no new carriers entering the market. What is the future for Med Supp in particular?
A. Medicare Supplement has been challenged with high utilization, really ever since the pandemic when so many procedures were put off. And, we're still seeing the effects of high utilization. You combine that with drugs, like some of these weight loss drugs have certainly had an impact on pricing on Part D. We've seen utilization be high, and we're starting to see, I think, some early signs that things are starting to stabilize more on the Medicare Supplement market. I would expect perhaps another year of strong rate increases, in some cases as high as 20%. But the consumers, in many cases, they don't have a PPO now in many rural areas. So Medicare Supplement is the plan choice. I would highly encourage you to look at high-deductible G, packaging it with hospital indemnity plan. And those hospital plans haven't had rate increases and/or extra other benefits like dental. So package ancillary products that really don't have a history of rate increases with the high-deductible G as another way to save money for your clients.
Q. How will new CMS marketing regulations and other federal laws being proposed for 2027 affect compliance requirements and sales practices for Medicare insurance agents?
A. How will new CMS regulations, even proposed legislation, affect our business going forward, whether it's from a sales standpoint or from a consumer standpoint? And this early notice, this prenotice — not the final rule that came out from CMS — was actually very good news. Scaling back the number of, if you will, hurdles that an agent would need to face.
One of the ones I love the most is agents that do a Medicare workshop, they don't necessarily have to wait until the next day to do an enrollment. So huge change in terms of Medicare workshops. And Medicare workshops are very, very popular. People need information. They want information. In many cases, they're ready to enroll right after that meeting. And now that's being possible.
So January 26 is actually the date where CMS required all of the comments from their regulations. But it was really hard to pick, to be picky, if you will, on what CMS had proposed — there was so much good relief. We're talking about record retention not being 10 years, for example. I think it was five is what was proposed. So many friendly actions.
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