Centene to cut broker commissions on Part D drug plans for 2025

Centene will not pay brokers commissions to sign people up for their 2025 Medicare Part D prescription drug plans or to renew coverage, according to a notice published Monday by Pinnacle Financial Services.

In an email to brokers, the health insurer said that to "continue providing access to high-quality healthcare and Part D coverage that helps families and individuals, we have made a difficult decision — effective Jan. 1, 2025 — to cease new and renewal commissions for PDP beginning with the 2025 plan year.”

Centene did not respond to a request for comment on its decision.

The insurer pointed in the notice to shifting Medicare Part D policies tied to the Inflation Reduction Act of 2022, including the elimination of the coverage gap or "donut hole," a $2,000 out-of-pocket spending cap, shifting cost-sharing responsibility in the catastrophic coverage phase and a new cost-sharing smoothing option.

The National Association of Benefits and Insurance Professionals, which represents brokers and agents, said in a news release Tuesday that Centene’s decision threatens the livelihoods of its members and their clients. Association CEO Jessica Brooks-Woods said in the release she has reached out to Centene for an explanation of its decision.

Related: Centene eyes Medicaid expansions as membership dips

Last month, the Centers for Medicare and Medicaid Services announced updated broker compensation rates for 2025. The commission on a new prescription drug plan for next year is $109, while the commission on a renewal is $55.

Centene’s decision to cut broker commissions comes as insurers face growing financial pressures due to higher Medicare Advantage utilization and a looming Medicare Advantage rate cut.

The company announced earlier this month it would not sell its Wellcare Medicare Advantage plans in Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont next year. However, Centene said it would continue to sell Medicare Part D prescription drug plans in those states. Centene offered Medicare Advantage plans in 37 states during open enrollment for the 2024 plan year.

Medicare Advantage insurers also face uncertainty over marketing rules for the 2025 enrollment period. Last month, a federal judge in Texas ordered a stay against a CMS rule that prohibits insurers from offering volume-based bonuses to top Medicare Advantage marketers, suspending a cap on broker fees. Insurance trade groups filed a lawsuit in May to block the rule and the case is ongoing.