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How Medicare Agents Are Paid

Why worry about how your Medicare agent is paid? It will help you identify their strengths, whether or not they are reliable or just in it for their check, and how to know you have a good agent.

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Through Themselves or a Company

It’s important to know where your agent is coming from and where their payment is sourced. They will either come from an independent agency, or through an insurance company. This is referred to as “independent” or “captive.”

Captive agents only sell Medicare plans through the insurance company they work for. So, they are unable to give you the full scope of your options. If you are just getting started with Medicare and haven’t settled on a plan yet, it is smarter to avoid captive agents until you can compare all of your options.

Independent agents can work with several Medicare providers in your area. This means, if you are looking for a wider scope comparison, you may benefit more from an independent than a captive agent.

By New Commission

Medicare agents, like all insurance agents, are paid the most when they have a new person sign up for a plan. They will either receive a flat dollar payment or a percentage. For most Medicare agents, a flat dollar amount is standard.

For example, the average 2024 commission for a Medicare Advantage plan is $611 for the initial sale. The good news about a flat payment versus a percentage is that they are less likely to push a more expensive plan.

Rather than receiving a percentage cut of something more expensive that may be out of your needs or price range, they will seek out the real best plan for you, because they get paid almost the same amount either way.

By Renewal

The other type of commission payment is by renewal. During the Annual Enrollment Period (AEP) from October 15th through December 7th, you have the option to change your Medicare coverage if you are dissatisfied.

Medicare agents are incentivized to keep your business by a renewal commission. They receive roughly half of the amount earned from the initial commission.

By receiving money for your renewal, agents are incentivized to keep you happy year after year.

By Servicing You Well

This means that they are also incentivized to provide the highest quality service to keep you coming back. One of the most important parts of an agent’s job, besides finding you the initial plan that fits your needs, is to provide service throughout your policy.

Have Medicare Questions?

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If you’re interested in learning more about Medicare, we can provide you with the answers you’re looking for. To learn more about how we can help you, call Shepherd Health and Wellness Benefits today.

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The purpose of this website is to provide general information on Medicare, Medicare Advantage, Medicare Supplement, Medicare Part D, and other health insurance related information. At Shepherd Health and Wellness Benefits, we believe that everyone should have access to the information needed to make an informed, confident decision about their healthcare. Calling the number on this site will connect you to a licensed insurance agent.

Shepherd Health and Wellness Benefits has researched government websites and publications in an effort to provide you with information. We believe the sources we use to provide information to be reliable. However, we do not guarantee or warrant the accuracy of this information. All materials on this site are for informational purposes only. The contents of this website are subject to change without notice. If you would like to find more information about the Government Medicare program, please visit the Official U.S. Government website for Medicare, located at medicare.gov.

Shepherd Health and Wellness Benefits is not connected with, affiliated with, or endorsed by the United States government, the Federal Medicare program, or a state agency. Medicare has not reviewed nor endorsed this information. Products sold by our team are backed by the insurance company’s guaranteed association and underwriting powers.

We are not connected with or endorsed by the United States government or the federal Medicare program. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options. Not affiliated with or endorsed by Medicare or any government agency. This website is operated by Kevin Thomas and Shepherd Health and Wellness Benefits (SHWB) and is not the Health Insurance Marketplace website at HealthCare.gov. This website does not display all Qualified Health Plans available through HealthCare.gov. To see all available Qualified Health Plan options, go to the Health Insurance Marketplace website at HealthCare.gov. Not intended for those eligible for Medicare. You need to be lawfully present in the United States and reside in the plan service area to qualify for medical coverage and/or subsidies. These policies have exclusions, limitations, and terms under which the policy may be continued in force or discontinued. This website is operated by Kevin Thomas and Shepherd Health and Wellness Benefits (SHWB) and is not the Health Insurance Marketplace website at HealthCare.gov. This website does not display all Qualified Health Plans available through HealthCare.gov. To see all available Qualified Health Plan options, go to the Health Insurance Marketplace website at HealthCare.gov. Not intended for those eligible for Medicare. You need to be lawfully present in the United States and reside in the plan service area to qualify for medical coverage and/or subsidies. These policies have exclusions, limitations, and terms under which the policy may be continued in force or discontinued. Interest and other guarantees in an annuity are subject to the claims-paying ability and financial strength of the insurance carrier that issues the product. Annuities are long-term vehicles. Many have surrender charges over many years, and withdrawals from an annuity prior to age 59 ½ may be subject to a 10% tax penalty. Reducing or skipping premium payments will impact the amount of interest paid and may impact how long the policy lasts. Accessing the cash value of a policy will reduce the available cash surrender value and the death benefit. A policy owner does not have the ability to make unlimited payments into the policy. If too much is paid into the policy, it will become a Modified Endowment Contract (MEC) and withdrawals and loans will be taxable. Policy guarantees are based upon the claims-paying ability of the issuing life insurance company. There are multiple ways to insure for long-term care needs. Options vary and some are less expensive than others, but may offer fewer guarantees. A financial professional can work with you to determine what coverage is right for you and how much coverage you should purchase. Health insurance doesn’t cover long-term care expenses. Medicare will cover some long-term care costs, but only up to 100 days (after a 3-consecutive-day stay in a hospital under treatment). Medicaid will cover long-term care expenses for individuals with assets of $2,000 or less (varies by state) and covered care may be limited to a nursing home. Paying for long-term care costs out of pocket may not be practical or cost-efficient for many people. When choosing a life product, make sure that life insurance needs are met long-term, especially if personal situations change — for example, marriage, birth of a child or job promotion. Weigh the costs of the policy, and understand that life insurance, and long-term care coverage linked to life insurance through riders, has fees and charges that vary with sex, health, age and tobacco use. Riders that customize a policy to fit individual needs typically carry an additional charge. The payment of long-term care rider benefits, as an acceleration of the death benefit, will reduce both the death benefit and cash surrender values of the life policy. Additionally, policy loans and withdrawals will also reduce both the cash value and the death benefit. Care should be taken to make sure that life insurance needs continue to be met even if the rider pays out in full, or after money is taken from the life policy. There is no guarantee that a rider will cover the entire cost for all of the insured’s long-term care, as this may vary with the needs of each insured. Final expense life insurance can be used by the beneficiary designated as needed rather than being limited to specific funeral services and providers. Final expense life policies will have a lower face value than most traditional term or whole life policies as they are intended for a specific purpose of covering those final costs rather than providing comprehensive support for surviving family members. This type of policy generally doesn’t require a medical exam, but premiums will be higher the older you are, and some benefit payouts may be limited during the first few years of coverage for those with significant health issues. Reducing or skipping premium payments will impact the amount of interest paid and may impact how long the policy lasts. Accessing the cash value of a policy will reduce the available cash surrender value and the death benefit. Policy guarantees are based upon the claims-paying ability of the issuing life insurance company.
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