MAJOR Medicare changes AGENTS should know | Insurance 360 Ep. 27

Grab your calculators and compliance manuals — the Chief Insurance Nerd is here. Sam Melamed joins Insurance 360 to decode the latest Medicare and ACA twists, from AI influence and carrier exits to the “birthday rule” and shrinking dental benefits. It’s annual enrollment prep, agent training evolutions, Dr. Oz impacts, and a Pinnacle Championship Series sneak peak.

AEP is coming. Get ahead now.

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Transcript

Insurance 360: Episode 27
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Bob: Good morning everybody. Welcome another episode, insurance 360. Summertime. Always stuff going on, but you know, weather's at least a little bit better in most of the country. Although here in Pennsylvania where we are, it's. 60 degrees and raining pretty much every day.

Rob: We get the polar opposite of the weather.

Right. It's like, it's like it's either super cold, super hot. We don't tend to get the middle ground of the weather.

Bob: Yeah. Well, I always like to say we get about six or seven seasons where the rest of the country just gets four. We get, we get, we have winter, it goes into spring, then it goes into sprinter we like to [00:01:00] call it, which we don't really know, depending on the hour of the day.

And maybe we'll come back to summer a little bit, you know? Yeah. It kind of goes back and forth.

Rob: I never know when to retire my coats. 

So they're just on a coat 

rack all 

the time. All, all, all year round. 

Bob: Yeah. But we've got a really important conversation. We feel like today, like this is that time of year where everybody's starting to gear up for Medicare, ACA.

We know it's still like. Away. Right. But it's,

Rob: but it's in the forefront of our brains.

Bob: It's happening. It's happening. We're already seeing the certification stuff coming out. We should talk about that a little bit. We got AIP gonna be rolling in around the corner, so there, there is a lot going on, but this is a time where we sort of like, but laser focus, start preparing, getting a plan together.

We're stretching, we're stretching our, our, our Medicare muscles right now. Yeah. Right. Exactly. And so today we've got, um. I think is one of the guys in the forefront of what's going on in the industry right now. [00:02:00] Sam, Melamed from NCD. CEO,. Am I, am I right on your title there? CEO, President, Guy-in-charge-of-everything.

What are we calling you today, Sam? 

Sam: I'm the Chief Insurance nerd here at NCD. 

Bob: Yeah, I like it. I like it. Well, welcome to the, uh, episode. We're really glad you grabbed a couple of minutes for us. I don't have to tell you. There's a lot going on. Right? 

Sam: Absolutely. Every day it seems like there's so new changes that have ripple effects and so studying it, thinking about it, planning for it, that's the game right now.

Bob: Yeah, exactly. Lot, lot to plan for a lot. We probably still don't know. I'm surprised. Some more changes to come where maybe we're just, uh, gonna have to assume some things at this point until we get some more light shed on it . We'll try and drill in a little bit, get a little bit granular. I don't wanna just hit Sam up and say, "Hey, what's going on in Medicare?"

Because that could, we could be here for the next six hours or six days and going through everything that's kind of going on in, in the Medicare world these days. [00:03:00] But, how about we start, Sam, with January, 2025, new administration comes in. We start going through, we start seeing, there's always changes when a new administration comes in that goes without saying, CMS gets a new head and they've, we've now got officially Dr. Oz. Right. When this was all going on, what's your first thought? What's what? What hits Sam when all this is happening? 

Sam: The initial thought was that this will probably be an administration that will be somewhat confusing, as it was four years ago, but that they learned a lot of lessons last time and were gonna hire appropriately to really carry forth their agenda in a more professional and strategic way.

And I think we did see that, Dr. Oz was an interesting choice. He is of course a very prominent and famous doctor, but more than anything, he's a highly effective communicator.

And President Trump is very interested in having his cabinet be people who can. [00:04:00] Articulate effectively what his plans are, but from the first minute Dr. Oz was named, you would see him appear at conferences and you can see him talk with a depth and sophistication that I think surprised a lot of people. So in his early hires like Peter Nelson and Chris Klomp come from a different range of places in the industry. Peter Nelson, who's running the ACA side over there was able to bring out some pretty meaningful new regulations very quickly.

Whereas you saw on the Medicare side, they were probably taking it a little bit easier, not push through any wholesale change right away. And I have a lot of respect, all the people that I've met in the senior levels of the administration. They're really holding these dual thoughts in mind. On the one side know Cam, we strengthen these benefits that cost our country so much, but on the other side, how do we tighten the belt?

How do we make sure there's not waste, fraud, and abuse and get smarter and more thoughtful about that? And [00:05:00] so the previous administration was very active from a regulatory standpoint, but their guiding light was really what their regulatory aims were. There was less of a focus on what is this gonna cost the country?

And you saw things like the Part D stabilization program that they rolled out pretty last minute when they started anticipating how the IRA changes will actually look when they hit the market. And so you saw a lot of regulatory movement to accomplish their goals, but not a lot of focus on also, how do we save the United States Treasury money?

How do we make these programs more sustainable? Accomplishing both of those is very hard, right? You gotta do more with less. And so we see there's a real focus on technology over there, and Abe Sutton , and some of the other leaders are really pretty aggressive, about pushing out some of their ideas of what they wanna see from industry.

Bob: Yeah. Now it makes sense and. When we talk about, we've heard, I think more, more so than us who are in the industry. I think [00:06:00] everybody in the world, or at least in the United States, fraud, waste, and abuse is now something. Everybody knows what it is.

We talk about our good friend Elon, and, and you know, and to your point, they were out in the forefront, man.

They're there, transparent to a fault, good, bad, otherwise, you know, it gives you a lot to talk about, but I think we like the fact that, you know, we're getting minute by minute what their thought process is a lot of times. Where, you know, sometimes with the government you sort of just like see the final rule come out, for example, and you're like, "huh, where'd they come up with some of this stuff ," right?

Rob: Definitely wasn't from experience.

Bob: Yeah.

Rob: I'll tell you that.

Bob: And it, you know, it's nice to maybe have some thought process behind some of these things 

Sam: And fraud and abuse is really a very broad category. You see, there's plenty of discussion around upcoding and things like that where it's not necessarily fraud.

The regulations say that if someone does technically have this clinical education, you can upcode them that way. But the vibes and the feeling that [00:07:00] people had in DC where that industry was just looking for every hole in the regulations to be able to, push things. And so that's not truly fraud.

Maybe you can call it abuse, maybe not, but you're starting to see now Humana and UnitedHealthcare are the first carrier to say, oh yeah, there's some practices that we're even affirmatively supportive of eliminating some of these home health visits and things like that. And then you do have actual fraud, which does remain a big issue and I think that's one of the areas where CMS and some of their new leadership with a focus on technology and using AI tools is gonna be much better and more aggressive at rooting out actual fraud and so you, you hear this a lot from med sub carriers, for example, they'll say, yep, wound care or some of the ambulatory or some of the, you know, there's always some of the DME spaces, there's always some new treatment, some new code that doesn't really have a limit to, and there will be actual fraudsters [00:08:00] who will find their way there.

And so there've been a few announcements over the last couple months of prosecutions of actual fraud, and I think we're gonna see a lot more of that come to light. 

Bob: I mean, we did an episode with the team over at Mutual of Omaha speaking of MedSupps and it stuck with me because talking about the fraud they had said at some point we all of a sudden saw like individuals ordering like. Hundreds of catheters. And of course it's like, "Well, you probably don't need hundreds of them. Let's look at that. What's going on there?" And, it was fraud. They found like a big issue. And MedSupp, I'd love to talk a little bit about the MedSupp where, because I mean, there's big changes there too.

You talk about the Inflation Reduction Act, how Part D impacts the overall cost of people that are buying Medicare supplement. You got birthday rule going on, which, you know, from the sound of it. I mean, if you're a politician, it sounds like a great talking point, but what [00:09:00] are the ramifications and implications?

How's it impact the cost of, of a Medicare supplement? Right? I mean, there's a lot, a lot of moving parts there 

Sam: I talk frequently with senior executives at many of the major Medicare Supplement carriers out there, and I haven't noticed as challenging of a time to do business in the MedSupp market as right now.

It's not to say there aren't pockets of the country where the market seems to be stable and seems to be functioning fairly well, but when you talk to execs who are talking about taking very large rate, increase status, they're often saying, this won't even get us to profitability, this will just lessen the pain of how much money we're losing on these plans.

I think fraud is a real component of that, as is the regulatory movement, you know, MedSupp is really largely regulated on a state by state basis, unlike Medicare Advantage, where there's some state by state variation, but for the most part, [00:10:00] the regulations are really all federal. And so it's a lot easier for insurance and consumer groups in certain states to push their agenda where there just may not be the sophistication to understand how this plays out in the market.

And I, I don't have a perspective as affirmatively against the birthday rule, for example. I think the more important thing is there's some real trade offs. And when you enact something like a birthday rule, you effectively shift some more of the burden on healthier population because it's easier for people to who have a significant diagnosis or feel like they need the choice of a MedSupp network or a MedSupp market to be able to lateral in directly.

The birthday rule is not the only thing that's shifting that though. You're also seeing a lot more network disputes. And so there's separately a law that says this is more of a federal law, that if your [00:11:00] Medicare Advantage plan has major network disruption, then CMS can enact a special enrollment period for people who could then lateral into the Medicare Supplement market.

And so you see this divide play out with consumer groups really across the spectrum of every insurance type, right? There are some consumer groups who say you shouldn't be able to use a credit report. On your auto insurance, even though it's a tightly correlated factor with what future expected claims will be because we think there's some disparate impact, or we want people to be able to just get a guaranteed issue effectively.

And all that does is it shifts the cost and it says, okay, some people who are actually a better risk are gonna pay more money because people who are towards risk are not gonna pay a more tailored approach to that risk. Around healthcare in the country, you know, the Affordable Care Act, one of the main wedges that was used to pass it was this idea of preexisting conditions, that it shouldn't be a [00:12:00] sentence for someone who has a preexisting condition to not be able to buy insurance.

I think there's a lot of righteousness to that approach, and there's clearly trade-offs where if you don't need to buy insurance until you need it, then any people will opt out until they need it, and the easier you make it to move in there. The more they're gonna play games and just buy it really when they need it, which drives up the cost.

And so the data is pretty clear that states that. Implement a birthday rule. You do see rate increases in MedSupp market more significant than when they don't. And so there are certainly some members in those states who will benefit from that loosening of the rule. But it does a lot of disruption on the distribution side.

And often there will be either no commission or different commission level when someone is moving in on a guaranteed issue basis versus underwriting. And so all these things just cloud the market. 

Bob: No, it makes sense. And I mean, we've been seeing it, I mean, [00:13:00] with the Medicare supplements, I mean, we're not, this was like the first year I feel like we're not seeing any single digit increases.

Right. They're all the double digit increases, I think are, to your point, the norm. And it's probably not even what they need to get themselves to profitability. Yeah. So I mean, it's, 

Rob: it's, I was checking the other day, and I mean, you have companies like, like UnitedHealthcare tends to have. Pretty stable stuff 'cause they're never the cheapest.

Right? Yeah. And they had increases of 18% and then that's here. You know, obviously it's not nationally. I don't know what it's nationally, but when you're seeing 18% from a company that's really good at, at keeping rates. I mean, just imagine the smaller carriers that the cheapest rates now what they're gonna be.

Yeah. You know, it's, it's huge disruption really. 

Bob: Yeah. And what, what, Sam, you probably will see this, I mean, what's gonna happen if they can't afford individual, can't afford a MedSup. They could have, like you're saying, some preexisting conditions. They can't maybe shop around and move somewhere else. What they're gonna gravitate maybe to a Medicare advantage plan, [00:14:00] right?

To try and save some money. Uh, and an agent, you know, a lot of times they'll say, Hey, take a look at a PPO plan. Right? Maybe that's a little, gives you a little bit more flexibility, but that's not. Even realistic. I think even now we're seeing a lot of pullback on the PPOs, a lot of them getting pulled from the digital marketplace.

Either paper apps becoming non-commissionable. I mean, this is stuff we haven't seen before. This is like mid a EP all of a sudden. All the PPOs are off the, uh, connection and sunfire platform. For example. 

Sam: There's a lot of discussion about what's gonna happen this year and there's a couple major national carriers that will have some news around their PPOs and potential commission levels on the MA side.

Uh, I do think that we will continue to see meaningful pullback from the PPO market for certainly national carriers who feel like that has a place in their product strategy. The fact is that the choice that [00:15:00] members really appreciate does come at a cost, and the greater choice does lead to greater claims.

And as the carriers continue to experience MLR headwinds, I. We're just gonna see that as another important lever that they'll pull back on. And so as long as there's many PPO MA options, the shift from MedSup that becomes unaffordable to MA is, uh, got some differences, but it's not as meaningful. But as the availability of those PPO plans potentially goes away in the MA market, it really makes that shift a more dramatic and significant one.

Bob: Yeah, no, it makes sense. And I'm really interested this year to see what happens with premiums, because I think when you look at the statistics, you're looking at 60, if not more percent of the MA sales or zero premium products. So if costs are going up, utilization's going up, you've got the [00:16:00] inflation reduction act that impacted.

The Part D premiums, the government obviously stepped in with the, with, with the, you know, last minute to save the Part D pricing structure. Um, August. Scared about that, that's for sure. Yeah. The stabilization act came, came in, but, but it will be this be the year where people are gonna shift a little bit from the zero premiums because if you to keep it a zero premium, you gotta offset it somewhere.

It's gonna be in the benefits. Right. Or the commissions or, or something. 

Sam: Yeah. When we talk to carrier executives, uh, behind closed doors, what we generally hear is they feel like the $0 premium will be the last benefit to go. They'd rather make cuts to some of the supplemental benefits. They'd rather find savings elsewhere because they.

When faced with a choice of free or paying something, it does become a more stark decision point. I have long been in favor of a required minimum price for Medicare [00:17:00] Advantage. I think just human psychology is that when you don't pay anything for something, it's harder to evaluate, it's harder to access it.

You spend less time thinking about thinking about it. And so in my view, there should be at least some DI cost for every MA plan, but. That's certainly not the current regulation. And so I, I suspect that this year, especially given the fact that all the major carriers are sharing MLR challenges, uh, United Healthcare most noteworthy because they did not share that last year when many of the other carriers were starting to see emerging trends of a higher MLR.

And so this year I do expect we'll see continued pullback on some of the embedded supplemental benefits. And there's, there's really a perfect storm there where you have the new regulation that requires plans to notify their members mid-year of any unused supplemental benefits. And so that by itself will probably drive up utilization and expense there, but also benefits [00:18:00] activation is a very big talk these days.

In the agent broker community and some of the platforms, there's a lot of discussion about benefits activation. How can agents be more impactful in really not just enrolling a member in a plan, but helping them access the benefits? So when you think about something like the supplemental dental benefits that have been embedded in Medicare Advantage plans, we saw, uh, until last year for about five years, a runup in the value of those benefits in a meaningful way.

And the, the market generally said we get a lot of marketing value from this and not a lot of utilization. So it's a really good bang for your buck when you're trying to grow on the MA plan. But a lot of agents are now being more upfront about helping their members actually access those dental markets.

We set your first. Appointment for you. Let us help you find a dentist. Let's make sure you have these valuable benefits that are embedded here, or you're gonna, you're gonna [00:19:00] start to use it. And so that is also driving up the level of utilization beyond what was projected there. So my suspicion is that we'll see a few plans start to introduce a premium where they had none.

But this is not the year for wholesale change there. And I do hope that over the next few years, the market does move in that direction. I think it'll be a net positive for all that I make. Barriers. 

Bob: Yeah, that's a, that's a great point because we've been preaching about the ancillary benefits. For forever, I feel like, and I think, you know, the plans have sort of had the, the dental vision hearing in there and some of them, you know, had really robust benefits.

But I think with some of these changes you could see a lot of pullback on some of these other benefits. So we always do tons of training on the standalone products, which I think I'm, I'm just ready for this to be the breakout year, right. You know, if you're not offering a standalone dental [00:20:00] vision hearing, like, you know, give you a little plug like the National Care Dental, which has been at the forefront of that market for, you know, some years now, um, or hospital indemnity.

You know, I think you're gonna be really doing a. Uh, dissatisfaction to the client who's not gonna have it, you know, in the same way as part of the plan. Yeah. Yeah. 

Sam: I don't expect an explosion of standalone sales only because of how busy people are gonna be. There's gonna be a lot of changes before AEP as the new plans come online and the first looks happen.

There's gonna be material pullback in some of those embedded supplemental benefits. But I think many agents who are already busy during AEP are gonna just be overwhelmed this year, like they were last year. With the opportunity to help more and more members really understand the movement and the difference in the changes that are happening.

I. In our internal projections, we do think that starting in March, April, may of next [00:21:00] year is really the inflection point where there's heightened awareness now already. But there is the practical reality during AEP of just how much time do you have in, in your day, and how many people do you need to help?

And with the shifts in the PDP market, there's, there's gonna be, you know, even more complications and probably more non-commissionable options. So we do think that now is the time for heightened awareness for standalone benefits, and there's a lot of secular tailwinds. You know, you have the embedded benefits being reduced at the same time you have some PPO plans going non-commissionable and some potential changes to marketing funds and to administrative payments.

And so distributors who need to compete for access to customers. They are going to need to look at, well, how can I help my members with more benefits and potentially also have higher total LTBs? And then we know that the, the research is very clear that when you [00:22:00] sell someone, both a Medicare plan and standalone ancillary.

Your retention on the core Medicare plan is gonna be higher as well. So we do see a lot of factors that have led to some meaningful growth this past year gonna continue over the next 12 months or so, and as we get through the A DP and agents have more time on their hands, I think we're gonna see a real inflection point around ancillary.

One other point I would make about ancillary is that by far the most common response we receive. When we talk to a member, you know, if, if someone sells an NCD dental policy, we'll do a welcome call to the member and walk 'em through their benefits and help them access and maybe set their first appointment.

And what we're seeing is that by far the most responded answer when someone has asked, why didn't you have a dental plan for the last three years? You just bought a new one. The answer is no one asked, or I didn't even know you could buy that. I [00:23:00] used to get benefits from group and someone called me about Medicare, but no one's called me about dental or about vision.

And so teaching a generation of agents to ask the question and to generate the prompt is very important. There's also the reality of the divide that for the last few years selling Medicare wasn't necessarily selling in a conventional sense. You are really giving something away. You are spending a lot of time helping them figure out what's the right choice and how do you do it, but actually taking premium from someone in exchange.

You know that that value exchange is in some ways a new discipline for a lot of agents in both the Medicare and ACA market. And we're starting to see a lot of smart FMOs say, now is the time where we really have to build that muscle to just ask the question. 

Bob: Yeah. I know we've, we've done trainings and, and there's so much.

It's just getting that them to [00:24:00] ask the question to your point, right. Putting it in the process. Right. It's just like a checkbox, like, all right, we're going doctors and your, your hospitals and, and your prescriptions, and you need a standalone dental. And, you know, going through it is just, if it's not part of their process, they're just not going to do it.

Right. If they, it's just something that has to be trained, um, that just hasn't been there before. 

Sam: That's right. Question. Have your dental bills been in the last 12 months, like the last time you went and bought glasses, and what'd they cost you? Right? Do you have eyes? Do you have 

Bob: Exactly. Would you like to keep them healthy and, and working, right?

Yeah. Yeah. And, and just talking a little bit about the overall cost, I mean, which is impacting everything. You know, I, I read a interesting article, I don't know if you saw this, that came out from deft. I think it was last week, they, and they talked a little bit about the fact that [00:25:00] people in the ACA world are putting off a lot of care until they get into Medicare, which is causing a spike in claims in, in Medicare.

Like, so it's interesting that they, they have coverage, but you know, they're, they're saying the coverage is gonna be better. I'm gonna put it off for another year before I get something done. You know? Are you seeing some of that with some of the data? 

Sam: I haven't seen direct data other than, you know, George Dipples report over at deft and they're always amazing with what they're, uh, what they're talking about.

But fundamentally it makes sense. The, uh, the networks that most of the ACA carriers use are not true commercial networks. They're not as broad as the Medicare Advantage networks. They're really. Kind of skinny, a little bit more akin to a Medicaid network. And so there's no doubt that there are some people who are in that 63, 64 age who are looking to say, all right, well I can get this done when I'm, um, on the different network.

[00:26:00] But I don't actually see any of that data personally. 

Bob: Yeah, no, it makes sense. And Rob here does. All the training and the, he's really our, our IT guy over here. I mean, all the technology, to your point, the technology's growing. Ai, I mean, listen, people say AI for everything anymore, but I, I think there's a reality that there, some of this is gonna start taking hold, um, federal government.

I don't know how quickly they're gonna do anything with ai. They're still like. A mountain side with paper somewhere in Colorado, was it Pennsylvania?

But where, where do we see the technology taking, taking us? Right? I mean, start with the ACA market. I mean, technology was, it was, I, I don't know if Wild West was the right word, but I'm gonna say Wild West. I mean, there's been some big changes this year, right? Just even an agent of record field. So that's a big impact.

Sam: You know, the, uh, [00:27:00] ACA market has obviously experienced quite a bit of fraud, waste, and abuse itself. And, uh, Peter Nelson really had regulations pretty much ready to go very quickly after he got into that seat and they put out some of those regulations really aimed at addressing some of that fraud. You also see some of those same regulations make their way directly into the big, beautiful bell.

Of course, any change you make on a regulatory framework is probably unwind. It, it's able to be unwounded by the next administration, where it's something that makes it into the legislation is much more challenging. And so what was interesting to see the, um, the regulators really do the work to make sure that some of those proposed regulations, some of those draft regulations that are still under review after the comment period closed.

Would actually make their way, potentially directly into the legislation. And so I do think we will see CMS use a lot more [00:28:00] technology to sniff out waste, broaden abuse, and to really understand what's happening in the market and the leadership there. On the Medicare side, in particular with Ape Sutton and Chris Klum, they really come from a technology background and if you are going to improve the care.

That happens in the country while bending the cost curve and while honoring that, that priority to reduce the future burden on the country, it's just gonna have to have, uh, AI and new technology in place. In our business we're, um, conflicted, you might say about ai. I love technology. I became obsessed with AI as soon as we saw some of the tools come online.

And we do mandate that every executive in our company uses it daily and has paid accounts. I see a lot of opportunity for efficiency, but I also see a lot of opportunity for it to, uh, eat the soul of healthcare, so to speak, or further remove [00:29:00] that human touch. And, and I don't love where it's going there, so like we have debates internally at NCD, you know, my team will bring an AI idea, you know, we can, we can introduce this and we can get more effective or more efficient.

But, um, I'm conflicted often because sometimes I see that efficiency will come at the expense of human interaction. And you know, that's one of the things we pride ourselves on. We're the highest rated insurance plan administrator in the country, and we're obsessed about answering every call in 30 seconds or less and answering every email in 20 minutes and answer every text message.

And there's no doubt that technology could be useful. Could certainly save us some money, but it ends up reducing that human interaction. And so like our team said, you know, X percent of our member care calls are someone who just needs a new card. They need a new insurance card. Look at, we could do that through the robot, through the IVR, you know, push [00:30:00] this and push that and put your account number and we'll send it out in the.

Then we're taking away one opportunity from a member care team to have actually a non frustrating conversation with someone. Oh, here's a problem I can solve right away. I could delight them. I can go the extra mile. And it's one less opportunity for us to ask about someone's grandkid or their dog. And we're the only adult conversation Phil might have every day.

And so while AI for our business and. We also have some areas, especially around where it might impact the feeling of members and how it feels to be taken care of by people. There's something in our view that's still special about that. People centric. 

Bob: Yeah. Now we love that we sort of go by the same thing here is about talking to people.

I think the technology's great for. Efficiencies, right? We're all, everybody in [00:31:00] the industry is probably using some type of software, um, whether it's in the ACA side or the Medicare side to, to compare plans. And, but taking away the conversations, uh, you know, that's where, you know, you sort of lose some of that, right?

If it, if it was so easy just to, you know, put out on medicare.gov, you know, the agents wouldn't have been so important to use the other platforms, right. To explain it, because there's. 40 some plans in every, you know, every county, I think last, last toll, um, you know, and it's all these extra benefits and whatnot.

How do you know which one to pick? I mean, when you're talking to a client, if you were just to say, Hey, go on here and put in your zip code, you know, and, and pick a plan, I wouldn't know what to do. 

Rob: All I'm saying is, is I'm the guy that's on the phone and I'm like, speak to a human. Speak to a human. And like if, if only, and I'm sure there's plenty of people out there that are like me, if only we had some video and we could make a colo, like a montage, it would be hilarious.

Because [00:32:00] human being, human being, you know, it's like, but I can take care of this for you. Do you want me to do it hit too? And I'm like, no. Um, but I, I do agree with you. I think the human element to what our business is, because we sell intangibles. The moment you start intermixing the technology with it as well.

And then you'll also add on, um, seniors who might not be super cool with technology. Right. Um, not comfortable with it like we are. I mean, I grew up with it. Um, it's a little different at what we're dealing with now. I'm not saying a lot of our baby boomers aren't good with technology 'cause they also screw up into it.

But you do have a lot of people that just don't deal with it on a regular. Um, AI is always a hot button thing, especially with the carriers. I, I personally think you're gonna see a lot of that stuff in the black and white. They're, they're gonna take a lot of that gray area out, right? You see some of the life companies where they have AI doing the underwriting.

And that's cool. It's efficient, but you leave, you know, if that one person doesn't, you know, hit that third mark, maybe they're taking two blood pressure meds [00:33:00] instantly declined. Right. Whereas a human underwriter might, might let that slide so the person can get life insurance. So I do think there's positives and negatives with the efficiency side of it as well.

But you're also gonna start to see a lot of that human element just being taken right out of it. 

Sam: Yeah. That for the next administration in three and a half years, that's going to be one of the key topics because AI will progress to the point where it may in fact be as good or even better at adjusting all the prospect's information and helping them find the plan that's right for them.

There's a reality that people like buying from people more so than from machines and the feeling of safety and security that can come from looking another human in the eyes and saying, I'm entrusting you to help me with this, is just different than, than would be, would be with machines. And probably there will be some elements of the market that will be entirely machine based, but I'm, I'm a speciesist.

I love humans. [00:34:00] And I'm making a bet that that's not going anywhere for the long term. 

Bob: Yeah, no, we agree. We feel like it. Some of this in some way, these conversations about the agents have been going on for quite some time. Um, I think it's still the preferred way most people wanna do business, especially in, in the senior market.

I think that's, that's still true to this day. So, you know, we can always look to the future. I think AI is, is a great tool that we're all gonna start using more, you know, even if you're using it. But I, I agree. We, we, we, we still think that human element is, is key in, in our space for sure. 

Rob: Yeah. I'll say this, I always say, please, whenever I ask an AI something, because you never know.

It's all the same. You never 

Bob: know. Yeah, exactly. Exactly. Well, I think, um, with the chat, GPT say. They use so much extra power because they, people say thank you to them and put these extra things in there, and they're like, just don't [00:35:00] even thank, don't thank chat bt. It costs them millions 

Rob: of dollars when you say please and thank you to it.

So yeah. Sorry. Sorry. Open ai. Yeah, 

Bob: exactly. It cost you 

Rob: some money. 

Bob: True, true. So, Sam, final thoughts. Medicare, a c, a. Change has always been the norm in our industry this year. I mean, is gonna be no different. We're gonna have 20, 26 plans and open enrollment coming out here soon. Um, you know, what's the big picture thought?

I mean, just a lot of, a lot of moving of plans again, like, like last year, you know? Is that, is that what we're gonna see? Yeah. I would separate 

Sam: each of which have an immense amount going on with them, but it's sort of different and separate. Most notably, most of the ACA carriers are making money, whereas most of the Medicare carriers are not.

At least when you look at it from an MLR standpoint. And so on the Medicare side, I think you do see continued headwinds around planned [00:36:00] profitability. Uh. You have major Fortune 100 CEOs who have said to Wall Street, we are going to restore our margin on these products. Not overnight, but it is gonna happen and moving in that direction.

Um, you know, we're gonna continue to see that. There's certainly a lot of game theory happening with the different carriers and probably some news is gonna hit this week about some major carriers and, and some changes that they're gonna do. And then you'll see a ripple effect of other carriers, you know, kind of scramble.

But it seems likely that this year is gonna be similar to last year. A lot of plan exits, a lot of shifting, including some possibly during open enrollment of what plans are available on the shelf or what plans are easy to enroll electronically. And so Medicare agents are gonna really have their hands full.

Just servicing their current book and looking to grow a little bit on the ACA side, we don't have true clarity because the proposed regulations, uh, many of them are effective for the [00:37:00] 2026 or were proposed to be effective for the 2026 plan year. And so what we see a smaller open enrollment period as this was proposed.

Or will they say we're gonna delay that by a year? I think that's one of the new regulations that has a decent chance of being delayed. Um, that probably would be helpful to the overall industry, but the minimum threshold that you must pay at least $5 per month or for the first payment and no auto enrollment, some of those things are gonna radically reshape the market when you knew that 50% of your book could renew as is with reasonable rate increases.

Then you didn't need to spend as much attention there and you can really focus on the areas where there was more market disruption. It, it's still early, but probably six or seven states have released their ACA route rates that had been proposed to the DOIs. And you can kind of see [00:38:00] most of the states are delineating how much extra the premium increase is gonna be.

Assuming that there's not an extension of the enhanced premium tax credits and, uh, cost sharing, and that's still a huge open question. Really no one knows what is the size of the addressable market for ACA next year. It's gonna be dictated largely by whether there's a last minute deal for that or not.

And, um, those discussions have been delayed given the fact that the is right now just working on. Big, beautiful bill. So the ACA market is very much up in the air. I personally like the $5 fee. I think number one, it does make it easy for brokers to say, look, clearly we have a role here in making sure that there's not waste and fraud and abuse, although I'm sure there will be some that will find ways to pay it for them.

But I think generally it's a positive to require some sort of minimum payment so that people do value [00:39:00] what they have. It also, I think, makes an agent's business more durable. If you do need to re rewrite the policy every year you're doing a review, having credible conversation every year with your customer.

You are really earning your. Across a long period of time as opposed to just auto re-enrollment and the government pays for it when agents, brokers have less interaction. So it'll be fascinating. It'll be busy, it'll be nerdy and it'll be exciting. 

Bob: Yeah, so what I'm hearing is if there was an event in like September when there was a lot more clarity on all these things, where all the agents could come and actually visit with all the top carriers to.

Hey, what's gonna happen in both worlds, a c, a, and also in Medicare? That would make sense to probably attend. Sounds like a pretty big thing. That sounds like, and we just, it's a coincidence, but we happen to be having a big event in [00:40:00] Orlando. September 18th, and I'm pretty sure NCD is gonna be there, which is gonna be a great way to get all the updates on everything going on in the world is by coming to this event.

And I always, I always ask you to remind me this, but what's the cost to attend this event for agents? I think it's free. It's it's free. Agencies come and get all the latest and greatest information on what's going on. They get to hang out with you and everybody from MCD and all the other major carriers.

It sounds like a good deal, right? 

Sam: Sounds like a great opportunity. Definitely be there. 

Bob: Absolutely. September 18th, Kia Center, be there. Or B Square. There you go. All right, Sam, we, we know we took a bunch of your time today, man. A lot, lot going on. Lot of great information. Love it. Anything as it comes down the road, we'll be sure to pass on to the agents.

I mean, we're in touch all the time. I'm sure we're gonna see some [00:41:00] changes and some bumps in the road, but everything will become more clear as we get closer. Don't forget about certifications, certification season. My favorite part of Yeah, yeah, yeah. That time of year. It's coming man. It's coming. But uh, Sam, thank you again, Rob.

Appreciate it all your time today, Sam. Have a great rest of your day, man. Thanks guys. 

Sam: Thank you.

Bob: Thank you.