SelectQuote is still happy with the Medicare plan market, and the insurance agency is hoping for strong sales in the upcoming annual enrollment period.
But one of the big Medicare plan issuers it represents has changed its commission payment schedule, and that has forced the company to adjust its Medicare plan sales strategy for the upcoming annual enrollment period, company executives told securities analysts Friday.
The new commission structure "resulted in a temporary capital constraint, which prevented us from hiring a larger agent class," Ryan Clement, SelectQuote's chief financial officer, told the analysts during a conference call.
The cut in the number of Medicare agents will probably lead to a 10% to 15% drop in Medicare plan sales this fall, Clement said.
He noted that the issuer's overall commission payment rate is still attractive.
What it means: Clement's comments add to the evidence that the upcoming annual enrollment period could be challenging because of factors such as changes in federal Medicare plan support levels, Medicare plan marketing rules and Medicare Part D prescription drug plan benefit design requirements.
The annual enrollment period for Medicare Advantage plans and Medicare prescription drug plans for 2025 is set to start Oct. 15 and run through Dec. 7.
