Is Your Distribution Channel Management Strategy Prepared for Medicare Open Enrollment?

This post is part of a series sponsored by AgentSync.

How to scale your insurance organization effectively and efficiently during AEP and beyond

‘Tis the season! Medicare open enrollment season, that is. It’s also time for Medicare beneficiaries to find the Medicare Advantage plan that best suits their unique needs. For insurance carriers, agencies, and MGA/MGUs, the annual enrollment period (AEP) is the time to change your efficiency and demonstrate that your organization is agile enough to handle increased business without letting producer experience fall by the wayside.

The insurance industry is facing heightened pressure during Medicare open enrollment

Medicare Advantage enrollment grew by more than two million beneficiaries from 2023 to 2024, with an estimated 32.8 million eligible people enrolled in some type of plan.

That’s a lot of people who will be looking to insurance agents in the next few months for help understanding the details of the Medicare program and navigating the ins and outs of enrollment. The pressure is on for insurance companies to step in and appoint enough producers at this time to handle the growing share of business. Is your organization agile enough to navigate this temporary expansion, or is the influx of manufacturers leaving you struggling to stay afloat?

For the unprepared, Medicare’s open enrollment season means:

Recorded administrative costs

Hiring, onboarding, managing, and outsourcing additional providers during Medicare open enrollment increases the workload of your existing workforce tenfold. If your current operations aren’t set up for growth, you’re stuck paying existing employees to work extra hours or paying to hire additional administrative staff to handle the extra work. Without the ability to scale operations quickly and efficiently, open enrollment can be a real lose-lose situation for an organization’s bottom line.

High compliance risks

More manufacturers mean more licenses to verify and follow. Traditionally, on-board and off-board manufacturers (and everything in between) come with a host of regulatory requirements for each state the manufacturer sells in, and so does Medicare open enrollment.

In fact, agents and brokers tasked with enrolling people in Medicare Advantage plans are held to strict regulatory standards such as those set by the Centers for Medicare & Medicaid Services (CMS). In April of 2024, CMS introduced changes to the rules it sets for Medicare Supplement, Medicare Advantage, and Part D insurance carriers and agencies. We’ve published a full explanation of the rule changes and their implications, but here are a few changes that insurance companies can expect to see in this year’s AEP:

• Changes to Medicare payment requirements: The 2024 Medicare final rule strengthened several payment conditions. As a result, carriers can anticipate aggressive disclosure requirements. CMS is also expanding its ability to recover overpayments, meaning carriers and agencies will likely face more backlash on claims.
• Timely access and prior authorization: Although the new pre-authorization rules won’t take full effect until 2026, active carriers are already taking steps to introduce more uniformity and transparency to their operations. The changes include tighter turnaround times, more detailed customer descriptions, and the adoption of APIs for an automated and simplified pre-authorization process.
• Marketing protection: Stricter rules regarding advertising and marketing disclosures for Medicare Advantage and Part D plans mean that carriers are tightening their advertising compliance reviews and require manufacturers to submit more materials for review.

Unhappy producers

Even the smallest drop in system performance can cause significant delays in the production run. Slow and inefficient onboarding means long wait times before a producer can make a sale. If the systems your organization relies on to manage distribution can’t scale without disruption, manufacturers suffer.

Lest you forget, Medicare open enrollment happens every year, which means that the information you provide to manufacturers this year will influence their partner decision again in the future. If the overall producer experience in your organization is inefficient, time-consuming, and messy during this year’s AEP, there is a good chance that producers will not return, and you will continue to spend more time, money, and resources on recruiting next year. .

In addition to an effective and agile distribution channel management strategy, these results are an excellent guarantee for insurance companies, agencies, and MGAs/MGUs navigating the annual Medicare enrollment period. But AEP is not the only example where it pays to be able to accept a change in the calculation of producers. Consider how your current systems can handle:

• Hundreds of emergency rides after a natural disaster
• Participating in a merger or acquisition
• Rapid market expansion or entry into new verticals

Best practices for a successful Medicare enrollment season

With millions of seniors and people with disabilities seeking support, the Medicare open enrollment period is undoubtedly a busy time for our industry. Done right, AEP allows your organization to demonstrate how efficient and structured it is to measure its operations. But without the right preparations and tools in place, it can quickly become stressful and expensive. Set yourself up for success during Medicare open enrollment by following these best practices:

1. Prepare workers in advance with adequate training and resources

Medicare enrollment can be a confusing time for beneficiaries. Between researching different options, understanding changes and nuances, and navigating federal websites, it’s no wonder that many people don’t end up changing plans at this time.

Experienced producers are very important to your carrier’s open Medicare season enrollment. It is a good idea to provide any educational materials and resources that can help producers familiarize themselves (and their beneficiaries) with the various Medicare programs and their benefits well in advance of the AEP. And don’t forget to include the 2024 CMS rule changes and their impact on your distribution capabilities in your training.

2. Dial in your onboarding process for a premium developer experience

Set yourself up for a successful AEP this year and the year after by establishing a positive, enjoyable producer experience and working relationship from there. If you still rely on individual manufacturers to manage their data during onboarding, you introduce inefficiencies and compliance risks to your business. These factors slow down the manufacturer’s ready-to-sell speed and encourage frustration.

Now consider the benefits of using an automated solution to automatically capture and process manufacturer data, removing time-consuming manual labor from your distribution partner’s plates, and ensuring that data remains complete, accurate, and accessible. Creating an efficient and positive experience fosters loyalty and encourages manufacturers to engage with you again year after year.

3. Prioritize flexible systems and automated solutions for ease of scaling

If the proliferation of NPNs negatively affects the performance of your system, navigating the AEP effectively will be challenging to say the least. More flexible systems can turn that challenge into an opportunity by allowing you to quickly adapt to an influx of manufacturers with little or no business disruption.

By investing in software that allows you to maintain operational integrity as you scale outside adding overhead, you’re improving your distribution processes to handle not only seasonal cycles like Medicare open enrollment, but other changes your organization may face in the future.

The most successful organizations stay ahead of the curve by investing in technology that integrates with their existing systems and can scale up (and down) to meet changing market demands and conditions without losing value.

Can your distribution channel strategy handle Medicare open enrollment?

Or, more importantly, can it handle open enrollment without sacrificing compliance, increasing administrative costs, and/or negatively impacting the producer experience? If the answer is no, it’s time to consider updating your distribution channel management strategy to include more modern, scalable solutions.

Crush Medicare’s open enrollment season and turn your distribution network into an asset that drives growth, rather than a bottleneck with AgentSync. Whether you’re looking to streamline your onboarding process, strengthen your compliance efforts, or strengthen your business operations to handle future growth, we’ve got you covered. Talk to an AgentSync expert and start transforming your distribution channel management strategy today.