Choosing the right 2025 Medicare Part D prescription drug plan or private insurer’s Medicare Advantage plan during open enrollment, which ends Dec. 7, is no picnic. In fact, 88% of users in an eHealth survey he said that buying a plan is confusing and overwhelming.
That’s why about one in three people in Medicare hires an agent or broker. (Independent agents represent multiple insurers and are paid by companies; brokers, also generally paid by insurers, allow people to select policies and send them to agents to buy.) But there’s currently a big problem with using Medicare agents.
Although 96% of Medicare Advantage and Part D plans contract with agents, Aetna, Hundreds (which sells Wellcare policies), CignaElevance (which sells Anthem policies), Humane and United Healthcare stopped paying agents commissions for some Medicare Advantage plans in certain markets.
Which insurers do not pay some agents
Centene, the largest Part D insurer, has stopped paying commissions on all of its stand-alone Part D plans. Aetna and Cigna are not paying commissions for some new Part D plans, and Aetna, Cigna, Elevance, Humana and United Healthcare have suspended commissions for some of their Medicare Advantage plans.
“This is not a decision we made lightly, but it was the right thing to do,” Elevance Chief Financial Officer Mark Kaye said at the UBS Healthcare conference, according to Modern Healthcare.
The Association of Health Insurance Programs (AHIP) did not respond Fortune request for comment on some agents and brokers who are not paid to sell Medicare policies.
In many cases, Medicare Advantage insurers’ businesses have grown so rapidly in 2024 that companies are capping commissions to limit sales.
“They say, ‘Oh my God, we have to tighten things up so we don’t get too much growth in a product that was already barely surviving,'” says Vijay Kotte, CEO of health insurance marketplace GoHealth.
Insurers are sometimes not even agents for paying policy renewals.
“The industry has historically viewed renewal commissions as a way to earn a commission as long as the member is in the plan — untouchable,” says Sam Melamed, founder Insurance forums online community for agents. The maximum Part D and Medicare Advantage renewal fee, set by the Centers for Medicare and Medicaid Services, is 50% of the initial purchase amount.
What this means for Medicare customers
Because some agents are not paid to sell certain Part D or Medicare Advantage policies, they may not recommend those plans even when they are the best choices for consumers.
Brokers and agents who do not offer all plans in an area must disclose that to clients, but are not required to say the proportion of plans they sell or how their compensation varies among plans, according to the Commonwealth Fund, a health research nonprofit.
“Unfortunately, the financial incentives of brokers and agents are not transparent to consumers,” says Gretchen Jacobson, vice president of Medicare programs at the Commonwealth Fund.
She believes that when insurers do not pay agents and brokers, “it is reasonable to expect that brokers will enroll their clients in plans that pay them commissions, which may not always be aligned with the needs of the beneficiary.” This is called management.
Mark Squires, a Kansas City Medicare agent who calls himself The Medicare Whisperer says, “Agents will be tempted not to mention plans they won’t get paid for.”
The year Medicare customers could use some help
If ever there was a year when Medicare buyers would want to hire an agent, this is it. Insurers are dramatically changing plans because of Part D rules that take effect in 2025 and financial pressure on some Medicare Advantage plans.
“Now more than ever, people need trained experts to guide them through their Medicare decisions,” says NerdWallet’s Elizabeth Ayoola. “While companies may be improving their bottom line by cutting commissions to these agents, older people unfortunately end up with the short end of the stick.”
Medicare beneficiaries can also get into trouble if they buy plans from unpaid agents: Agents can’t help them resolve preauthorization denials or appeal denied claims.
If an agent doesn’t have a contract with a non-commission-paying insurer, “we don’t have access to any information about the client’s specific policy,” says Squires.
Difficult situation
“There is no other profession that I know of in the United States, or perhaps in the world, that is required to work for free,” says Ronnell Nolan, president and CEO of Health Agents for America (HAFA). “So why the hell does an insurance company think insurance agents should be doing this?”
Melamed says that insurers not paying Medicare sellers is “one of the biggest explosions of discussion I’ve seen since we started Insurance Forums.”
Occasionally, in the past, health insurance would offer one or two Medicare Advantage or Part D plans without a copay, says Danielle Roberts, president of the Medicare Advisory Group of the National Association of Insurance Benefits and Professionals. “But this year has been off the charts,” she notes.
Medicare beneficiaries may not know that their agent does not suggest a Part D or Medicare Advantage plan because they cannot be paid to sell it.
But some agents still sell Part D and Medicare Advantage policies from insurers that don’t pay them. “Our policy has always been that if a plan where we don’t get paid is what works for our client, that’s what we’ll recommend,” says Squires.
The second, says Melamed Wealth“they say, ‘I just refuse to write business with a plan that doesn’t pay commissions.’
Motions to recover commissions
Trade groups of insurance agents tried to convince insurers to pay all commissions.
About 2,000 members of the Health Care Agents of America signed a Change.org petition to keep Wellcare paying Part D commissions. “HAFA argues that fair compensation is not just an issue of equality for agents — it’s a necessity to protect the seniors who depend on them” , the petition states.
The National Association of Benefits and Insurance Professionals called insurers directly.
So far, both attempts have been unsuccessful.
How to buy a policy without an intermediary
If you want a Part D or Medicare Advantage plan for 2025 and want to compare everything possible, go to Medicare.gov Plan Finder Tool. It allows you to see all the options for your area and compare out-of-pocket costs and coverage with each policy.
Some agents who are not paid to sell policies direct customers to the Medicare.gov site to purchase them.
“If I have a client who doesn’t take any medication, I tell them the options: ‘Here’s a plan that’s $12 a month that I could put you on, but there’s also this Wellcare plan (with no payers) that’s $0. I feel like you need to know for that. If that’s what’s best for you, here’s how you enroll on Medicare.gov,” says Roberts. “We’re actually losing money.”
After using the Plan Finder, if you want to buy a Part D or Medicare Advantage plan yourself, you can call the insurer to do so. Just remember that you won’t have an agent to help you if something goes wrong.
When agency fees could be refunded
Some Medicare agents believe the benefit cloud could disappear in 2025 or 2026, offering more choices to people buying policies.
“I believe with all my heart that in a year or two the insurance companies will be back with their hat in hand asking us to come back,” says Squires.
Roberts believes President Trump and the Republicans who control Congress could end the problem of paying agents for Medicare Advantage plans.
“Republicans tend to be more pro-Medicare Advantage than Democrats, so we could see changes that would make Medicare Advantage plans more cost-effective again, which could allow us to pay again for the 2026 plan year,” she says. “I’m less sure about part D.”
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