Primerica Move Raises Questions About Medicare Market Stability
The company is giving up a newly acquired health arm partly due to "an uncertain regulatory environment."
Primerica is giving up on a newly acquired Medicare plan distribution firm after just three years.
The life insurer and financial services distributor said Tuesday that it will pass e-TeleQuote Insurance on to a “third party who has not yet been identified” by Sept. 30.
The Primerica board believes that the senior health distribution market is “increasingly challenging” and that the market “is facing an uncertain regulatory environment,” the company said.
Primerica agreed in 2021 to acquire an 80% stake in the Clearwater, Florida-based holding company that owns e-TeleQuote through a deal that had a total maximum value of $575 million.
What it means: Primerica’s move raises questions about whether tougher conditions in the Medicare plan market will simply squeeze some players out or whether turmoil will disrupt the upcoming annual enrollment period.
The enrollment period for Medicare Advantage plans and Medicare Part D prescription drug plans for 2025 is set to start Oct. 15, as early general election voting is underway in many states.
The timing means disruption could affect the presidential and congressional elections as well as older clients’ ability to pirchase Medicare plan coverage.
The backdrop: Medicare provides coverage for Americans ages 65 and older, some people with disabilities and people with kidney disease severe enough to require dialysis.
About 32 million of the 64 million Medicare enrollees use Medicare Advantage plans to meet “Original Medicare” cost-sharing requirements, and 14 million use Medicare supplement insurance policies to fill in the gaps. Stand-alone Medicare drug plans have 23 million insureds.
In recent years, Medicare program managers have responded to reports of high issuer profits by adopting tougher reimbursement rules.
Program managers have also adopted regulations that could eliminate issuers’ ability to pay for agent support services. Instead, the maximum agent commission for a new enrollment would increase by $100. The current cap is $611. Agent groups say the typical value of issuer-funded support services has been about $200.
A federal judge in Texas has blocked implementation of the agent pay regulation. Medicare program managers are fighting the stay.
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