Ronnell, Guy et al.: Please see the Update/Correction dated 4/16 above. The KFF data confirms your contention that commissions PMPM have not doubled. The cited averages divide total broker commissions in a given market by *all* enrollments in a given market, including those that are not broker-assisted. Meanwhile the percentage of enrollments that are broker-assisted has almost doubled since 2018. Commissions per marketplace enrollee -- counting *all* enrollees -- may have roughly doubled since 2018, but the commission paid to a broker for a given client certainly have not.
Love the article but one thing for sure is adding an extra step in the application does not slow down the process. An agent can get the needed information from a client from an official government document and plug it in the application later. But they can it access the application without getting it directly from the client. The agent also has to check the box to attest that they got permission. It takes less time than the two step consent form required by CMS that clearly does not work. This is the process in VA. Or the consumer can choose their broker from a list if available brokers while logged into their account. This sends an invitation to the broker who then must accept or reject the consumer as a new client. This is another option in both MD and VA. In MD the 2FA requires 4 pieces if identifying information if the broker wants to connect their account to the clients account. This information must be given to the Producer Call Center. If there is no broker attached they complete the process. If there is a broker attached the consumer must get the brokers Full name and NPN in some cases they ask for the agents Zip Code. Thus is done only once. The agent can only be replaced by the consumer. The tango process as it’s called MD takes a 5 minute phone call. Getting the numbers from the document and checking the consent box depends on how fast you can type. Once you do it once or twice it’s not hard and keeps the consumers data safe. Who cares about slowing down the process a few seconds with something that has already been proven to work. And with Health Sherpa’s streamlined application it will be simple. What you get upfront is data that’s later put on the application.
Thanks for your article. However, agent commissioners have not doubled, our commissions were cut approximately 90% after the passing of the ACA. Average commissions is $20 per month. If the policy stays on the books, commissions decrease. We would appreciate a correction. Thanks again!
Brokers have had commissions CUT significantly since the dawn of the ACA. This is easily proven.
Your statistics are also wrong because what KFF is doing is averaging $0 per unit in that time frame when carriers REFUSED to pay brokers and we worked for free.
For example, if policy A paid me $20 and policy B paid me $0 because the carrier refused to pay me, that doesn’t mean that I made $9 per policy. It means that I made approximately $20 per policy and more than half the time the carrier refused to pay me anything at all. This is why you are referencing a $9 per month commission.
It is highly misleading and completely inaccurate to suggest that when CMS required the insurance companies to actually pay the commissions that we earned that we were somehow doubling our compensation.
This was a great article.
But please issue a correction because it’s highly misleading at best to suggest that actually getting paid (which CMS now requires) is somehow doubling our compensation.
It isn’t. It’s requiring that we are paid. At all.
Guy, I am perfectly willing to acknowledge/report that brokers' experience does not reflect a doubling of commissions in the marketplace since 2018 -- though that is a national average and, if accurate, wouldn't reflect experience in every state. But keep in mind that I wrote that commissions appear to have roughly doubled since *2018* -- I realize that they went down radically when the marketplace first launched. I will issue a clarification to the effect that the annual averages cited by KFF don't seem reflected in brokers' experience. I am still waiting to hear from some brokers I have queried, and I would be happy to hear from more in comments here.
The averages KFF cites are based on data from Mark Farrah and Associates. The data includes this note:
"Broker fees per member per month are calculated by dividing the sum of all agent and broker fees and commissions and direct sales salaries and benefits in a state by the total enrollment (member months) in that state. Plans that filed a negative value for direct sales salaries and benefits, agents and brokers fees and commissions, or member months were excluded from this analysis."
I am frankly not sure whether that suggests that $0 commission sales were figured into the average or not, since zero is not a negative. I'll seek clarification on that point.
If the average does reflect zero-commission enrollments, it seems to me that suggests that while the average *commission* may not have doubled (or anything close to it), the available commission income may have. That is, zero-commissions should count in the average.
The fact that carriers completely REFUSED to pay ANYTHING for our work almost half the time doesn’t mean that we have been given this big raise now that carriers are explicitly REQUIRED by CMS to pay brokers commissions that have been earned.
It means we worked for free for any SEP (Special Enrollment Period) enrollees for several years.
Because the insurance companies refusal to pay ANY commission whenever they felt like it, many brokers almost didn’t survive.
And also, for perspective, let’s please look at the amounts involved. We are paid only an average of $20 per month or $240 per year. You would have to do 100 enrollments to make $24,000 per year.
An article that includes the completely false claim that brokers commissions have “doubled“ just distorts the situation and is simply not true.
How would you feel if your company just decided unilaterally that “we are not going to pay Andrew anything at all for his work.”?
Would you believe that your pay has somehow “doubled” when the government finally steps in and FORCES the insurance companies to pay you?
Ronnell, Guy et al.: Please see the Update/Correction dated 4/16 above. The KFF data confirms your contention that commissions PMPM have not doubled. The cited averages divide total broker commissions in a given market by *all* enrollments in a given market, including those that are not broker-assisted. Meanwhile the percentage of enrollments that are broker-assisted has almost doubled since 2018. Commissions per marketplace enrollee -- counting *all* enrollees -- may have roughly doubled since 2018, but the commission paid to a broker for a given client certainly have not.
Love the article but one thing for sure is adding an extra step in the application does not slow down the process. An agent can get the needed information from a client from an official government document and plug it in the application later. But they can it access the application without getting it directly from the client. The agent also has to check the box to attest that they got permission. It takes less time than the two step consent form required by CMS that clearly does not work. This is the process in VA. Or the consumer can choose their broker from a list if available brokers while logged into their account. This sends an invitation to the broker who then must accept or reject the consumer as a new client. This is another option in both MD and VA. In MD the 2FA requires 4 pieces if identifying information if the broker wants to connect their account to the clients account. This information must be given to the Producer Call Center. If there is no broker attached they complete the process. If there is a broker attached the consumer must get the brokers Full name and NPN in some cases they ask for the agents Zip Code. Thus is done only once. The agent can only be replaced by the consumer. The tango process as it’s called MD takes a 5 minute phone call. Getting the numbers from the document and checking the consent box depends on how fast you can type. Once you do it once or twice it’s not hard and keeps the consumers data safe. Who cares about slowing down the process a few seconds with something that has already been proven to work. And with Health Sherpa’s streamlined application it will be simple. What you get upfront is data that’s later put on the application.
Thanks for your article. However, agent commissioners have not doubled, our commissions were cut approximately 90% after the passing of the ACA. Average commissions is $20 per month. If the policy stays on the books, commissions decrease. We would appreciate a correction. Thanks again!
Ronnell, if they're $20/month now, they've doubled since 2018 (as stated in the post), when the avg. was $9.79/month according to the KFF tracker. I could clarify that individual market commissions were much higher pre-ACA. KFF pegs the average at $12.79 in 2014. Do you have an average for the pre-ACA market I can cite? https://www.kff.org/health-costs/state-indicator/health-insurance-broker-compensation/?currentTimeframe=3&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Andrew this is COMPLETELY and totally FALSE.
Brokers have had commissions CUT significantly since the dawn of the ACA. This is easily proven.
Your statistics are also wrong because what KFF is doing is averaging $0 per unit in that time frame when carriers REFUSED to pay brokers and we worked for free.
For example, if policy A paid me $20 and policy B paid me $0 because the carrier refused to pay me, that doesn’t mean that I made $9 per policy. It means that I made approximately $20 per policy and more than half the time the carrier refused to pay me anything at all. This is why you are referencing a $9 per month commission.
It is highly misleading and completely inaccurate to suggest that when CMS required the insurance companies to actually pay the commissions that we earned that we were somehow doubling our compensation.
This was a great article.
But please issue a correction because it’s highly misleading at best to suggest that actually getting paid (which CMS now requires) is somehow doubling our compensation.
It isn’t. It’s requiring that we are paid. At all.
Guy, I am perfectly willing to acknowledge/report that brokers' experience does not reflect a doubling of commissions in the marketplace since 2018 -- though that is a national average and, if accurate, wouldn't reflect experience in every state. But keep in mind that I wrote that commissions appear to have roughly doubled since *2018* -- I realize that they went down radically when the marketplace first launched. I will issue a clarification to the effect that the annual averages cited by KFF don't seem reflected in brokers' experience. I am still waiting to hear from some brokers I have queried, and I would be happy to hear from more in comments here.
The averages KFF cites are based on data from Mark Farrah and Associates. The data includes this note:
"Broker fees per member per month are calculated by dividing the sum of all agent and broker fees and commissions and direct sales salaries and benefits in a state by the total enrollment (member months) in that state. Plans that filed a negative value for direct sales salaries and benefits, agents and brokers fees and commissions, or member months were excluded from this analysis."
I am frankly not sure whether that suggests that $0 commission sales were figured into the average or not, since zero is not a negative. I'll seek clarification on that point.
If the average does reflect zero-commission enrollments, it seems to me that suggests that while the average *commission* may not have doubled (or anything close to it), the available commission income may have. That is, zero-commissions should count in the average.
Andrew
Thank you for the note.
The study is completely off base.
For example, 20+0= 20 /2 = 10.
The fact that carriers completely REFUSED to pay ANYTHING for our work almost half the time doesn’t mean that we have been given this big raise now that carriers are explicitly REQUIRED by CMS to pay brokers commissions that have been earned.
It means we worked for free for any SEP (Special Enrollment Period) enrollees for several years.
Because the insurance companies refusal to pay ANY commission whenever they felt like it, many brokers almost didn’t survive.
And also, for perspective, let’s please look at the amounts involved. We are paid only an average of $20 per month or $240 per year. You would have to do 100 enrollments to make $24,000 per year.
An article that includes the completely false claim that brokers commissions have “doubled“ just distorts the situation and is simply not true.
How would you feel if your company just decided unilaterally that “we are not going to pay Andrew anything at all for his work.”?
Would you believe that your pay has somehow “doubled” when the government finally steps in and FORCES the insurance companies to pay you?
No. You wouldn’t.
Because it hasn’t.