Ocasio-Cortez Proposes Bill to Limit Compensation for Representatives of Medicare Advantage Organizations

Press Release

WATCH HERE

Washington, D.C. - Today, Representative Alexandria Ocasio-Cortez (NY-14) discussed her new bill to limit the compensation that may be paid to agents and brokers by for-profit health insurers with Medicare Advantage plans in the Health Subcommittee of the Committee on Energy and Commerce. In 2022, agents and brokers received $10 billion in compensation from for-profit insurers, up from $3.9 billion in 2014.

The proposed bill would require the Secretary of the Department of Health and Human Services to establish a maximum compensation amount for an agent, broker, or other third party representing for-profit insurers offering Medicare Advantage plans. The legislation also redefines what that compensation entails so those for-profit insurers cannot continue to provide agents and brokers with financial perks like bonuses and vacations in exchange for signing individuals up for specific Medicare Advantage plans. Overall, this legislation will ensure that agents and brokers are not influenced by the compensation offered by health insurers but are instead working with patients to choose the best plan for them.

Find Representative Ocasio-Cortez's remarks as delivered below:

"I want to thank the committee leadership for including my bill in today's hearing as well. And I want to talk about an aspect of Medicare Advantage today that we actually haven't focused on much this Congress, and that's on the agents and brokers who sell Medicare Advantage plans.

Now, Dr. Whaley, when someone turns 65, they are often inundated with all sorts of information about the different Medicare Advantage plans available to them, correct?

That's correct.

And so, people, I mean, you turn on daytime television and you've got all these celebrities, you've got Joe Namath and William Shatner talking to you about Medicare Advantage plans. You get lots of mail. People really start getting tons of marketing about these plans.

And because of the money, the amount of money that these for-profit insurers invest in marketing, many people don't understand- to my colleague from Ohio's point- that Medicare Advantage is not Medicare, it is corporate, for-profit managed insurance, correct?

Correct.

Now, Dr. Whaley, if I'm turning 65 and I don't know the difference between Medicare and Medicare Advantage, I am faced with sorting through dozens of these plans and marketing. And that's where we encounter this issue of agents and brokers.

Dr. Whaley, in theory, agents and brokers work with everyday people enrolling in a Medicare plan that are there to help them pick the best plan for their health, right? Ostensibly.

I think that's how we would like it to work.

Ostensibly, that is how it's supposed to be set up.

What gets complicated is that the agents and brokers are paid by the health insurers for enrolling individuals in specific plans. That means that their decision making could potentially be clouded by compensation offered by these for-profit health insurers.

And in fact, some of these individual companies- say you have a Blue Cross Blue Shield Medicare Advantage plan or any other kind of company, UnitedHealthcare managed MA plan- they often will provide these kinds of kickbacks to the brokers that enroll people in their preferred plan, right?

That's correct.

And what are some examples of the compensation provided to these agents and brokers when they enroll individuals in any given Medicare Advantage plan?

They can include direct fees of up to hundreds of dollars, or they can include things like conferences at ski trips and all that type of stuff.

So like trips, you said and it's almost like a back door commission type of setup, right?

I think that's a good assessment.

And so, you're supposed to have the agents and brokers that are talking to your mom or your grandparent saying, we'd like to enroll, we think this plan is what's best for you.

But what that person doesn't know is that UnitedHealthcare is saying, we'll give you a vacation if you enroll people in our plan, or we'll give you a couple of extra hundred dollars if you enroll someone in a Blue Cross Blue Shield or a United plan or any other number of plans. And in your testimony, you stated that agents and brokers received $10 billion in this kind of compensation in 2022 alone, right?

That's correct.

That's $10 billion in taxpayer money. That's being- a lot of it is being funneled through these corporations.

And so that is money that is not going to care. It's going to perks and trips to Boca and financial incentives for brokers to enroll people out of traditional Medicare and into for-profit Medicare Advantage plans. That's almost three times, $10 billion is almost three times what they were compensated in 2014. So not only is this amount a lot, it is exploding.

And Dr. Whaley, they actually aren't fiduciaries either these agents and brokers. So they have no obligation to the people that they are allegedly supposed to help, correct?

Unfortunately, that is correct.

So, I have a sensible piece of legislation that would make- and I know there are a lot of good agents and brokers out there. But from a policymaking perspective, we shouldn't be relying on people to just do the right thing.

We do have compensation today that- or rather legislation today that limits and redefines what those caps are so that we can introduce some accountability into this system. And I hope we can have some bipartisan agreement on that.

Thank you. "

###