Enter the Bounty Hunter Insurance Agents

[By Dr. David Edward Marcinko; MBA]

[Publisher-in-Chief]

As a health insurance agent and industry insider for more than a decade, I know first hand that the agents and brokers who enroll senior citizens in Medicare Advantage (MA) plans often make more on those members than the health plans themselves. 

Example:

For example, up to $400-600 can be spent on an insurance agent/broker fee by the health plan, contributing to a total member acquisition cost that can exceed 10% of the premium dollar. And, this commission fee or bounty on “grandma” – much like a bulls-eye target on her back – was much higher back in the day. Hence, all the “free” seminars, luncheons, trinkets and other senior citizen freebies cloaked as information dissemination.

Acquisition Costs High

Even if Medicare Advantage plans could deliver the actual health care benefits at a considerably lower cost than traditional Medicare Fee for Service (FFS); it is very possible that the entire savings could be consumed by member acquisition costs.

Assessment

Now, as a doctor, insurance agent, financial advisor, health economist and future MC patient, I believe that traditional Medicare is a very tough act to follow; and is still the best deal around, by far. Now, try to convince my dad.

Conclusion

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Filed under: Ethics, Financial Planning, Health Insurance, Insurance Matters, Op-Editorials | Tagged: commissions, HMOs, insurance agents, insurance brokers, Medicare Advantage, Medicare HMOs, Medicare Plus Plans | 12 Comments »