Medicare Broker Compensation
How I'm compensated for my service.
What is Medicare broker compensation?
We are often asked about how we are able to offer our services without charging clients. Well, the reason is, we receive Medicare broker compensation through the various products we offer clients. Because we pride ourselves on being transparent with our clients, we chose to disclose how we receive this compensation. Examples of our medicare broker compensation would be a Medicare Supplement Plan commission, a Medicare Advantage Plan commission, and a Medicare Prescription Plan commission.
We make our living implementing Medicare insurance plans for new enrollees as well as maintaining our relationships with current clients or those looking to make updates to their coverage. Our advantage as independent brokers is our ability to review, shop, and compare plans for clients through multiple insurance companies. Our true “advantage” is that our clients can choose the Medicare plan that suits them best and we are compensated on any plan they decide to go with.
If you would like to know more about our Medicare Supplement Plan commission or Medicare Advantage Plan commission, just ask. As an example, many of our clients are surprised to hear that the Medicare Advantage Plan commissions pay us a much higher commission than our recommended coverage route of going with a Medicare Supplement Plan and Medicare Prescription Plan. In fact, it’s more than both combined!
We offer both plan types as brokers, but many times we get asked why we advocate for clients to look at the Medicare Supplement Plan route first. This is important, as you should know there is no conflict of interest when we advocate that our clients consider the Medicare Supplement Plan and Medicare Prescription Plan route before considering a Medicare Advantage Plan.
We work on behalf of our clients, not an insurance company.
Our agency works independently of each insurance company. In essence, we independently represent insurers and provide objective, unbiased options from a variety of insurance companies. We do not receive a salary or any other form of payment from the insurance companies other than the commissions from the insurance plans our clients chose. If we are not able to provide our clients with the most competitive plan options, we are no longer in business.
We receive our compensation from enrolling new clients as well as compensation from our current client base who continue to use our service year after year. Therefore, maintaining a high level of service is our priority. In fact, offering you the most competitive rates with highly rated carriers is how we keep our clients happy. The commission we receive is paid directly by the insurance company. Here is an article from an objective source outlining the basics of commission structures for Medicare products throughout the country.
There are no hidden fees with us. You do not pay us, ever. You pay the insurance company directly (i.e. monthly premium for coverage). Payment is always controlled by our clients through direct billing or auto draft to the insurance company– your choice. The premium you pay for the products we offer is exactly the same as going direct to the insurance company’s call center. We receive our Medicare insurance plan compensation from the following products:
Medicare Broker Compensation:
The biggest difference between us and a captive agent is that we don’t work for an insurance company. As brokers, we work on behalf of our clients. If we unable to provide you with a product that suits your needs, we are not compensated for our service. Therefore, it is always in our best interest to provide you with transparent information, knowledgable service, as well as highly rated insurance plans.
We are only compensated when you choose to work with us. Here is an article from an outside source that outlines the compensation structure of a broker to confirm what I’ve shared with you. In addition, I’ve included Medicare agent/broker compensation from the government site of Centers for Medicare & Medicaid Services (CMS.gov).
Medicare plan premiums are exactly the same as going direct.
Again, our clients never pay us for our advice, or pay more than the monthly insurance premium charged by the insurer. Medicare insurance plans are priced 100% the same as going direct to the insurance company. We see it as a win-win for us and our clients. To illustrate, you get better service and plan choices. Subsequently, we receive compensation from any plan you choose. Lastly, when you work with us, you get to work directly with John, the broker. In contrast to an employee working on behalf of insurance company’s best interests. As always, you can continue to use the insurance company’s service resources online (billing/account information) in addition to our more personalized one-on-one service.
Medicare Supplement Plan Commission (Medigap)
When a client chooses us to help enroll in a Medicare Supplement Plan, we receive a Medicare Supplement Plan commission based upon a percentage of the monthly premium. You are not charged more than the insurance company’s premium for our service. The insurance company pays us a commission for the product you choose. We are paid a Medicare Supplement Plan commission on a monthly or annual basis depending on the insurance companies payout structure. The percentage also depends on the contract we have set up with the insurance company. If you have questions about this, just ask!
Medicare Supplement Plan Commission is based on your premium.
When it comes to Medicare Supplements Plans, our goal is to provide you a highly rated product with competitive rates. Remember, Medicare Supplement Plans are standardized. Therefore, there’s no reason to pay more for the same exact thing, right? We want you to be confident with any recommendation we make, knowing we’ve disclosed any incentive we have to offer that plan to you. Transparency is the key to our success as we know every insurance company is competing for your business.
If and when your rates increase, we are not paid on the new “increased amount”. We are paid on the initial premium. Therefore, it is in both our best interests to review your rates each year or every two to three years to find the same plan that provides you with a more competitive (lower) rate. We want our clients to be satisfied with the products and service we offer. Ask us anytime about our Medicare Supplement Plan commission.
Medicare Advantage Plan Commission (Part C)
Just like Medicare Supplement Plans, we are paid directly from the insurance company for brokering a Medicare Advantage Plan. We are typically paid an annual Medicare Advantage Plan commission the first year you enroll. Subsequently, we are paid a monthly Medicare Advantage Plan commissions each month you’re covered under that same plan. The structure of commissions may vary depending on how the agent/broker has set up the contract with each insurance company.
Our clients never pay a cent more than going direct to the company’s call center. In fact, our compensation is a fixed amount regardless of your monthly premium. The commission is structured and negotiated by CMS, the insurance company, and state it is issued through. To be clear, we are paid the fixed amount regardless of the premium you pay for the Medicare Advantage Plan. We receive the same Medicare Advantage Plan commission on a $0 premium plan as we would with a $100+ plans. We will help you breakdown each plan option to find the best value for all plans available to you. You can simply choose the plan that works best for you. We are then compensated by the insurer of the plan you choose once your enrollment is complete.
Medicare Advantage commission is not based on your premium.
The amount we are paid for helping you enroll in the plan of your choice is the same amount whether it is the first plan you enrolled in or a plan we recommend you consider moving to for the next year due to the plan changing its coverage. The initial first year enrollment may have higher payouts to the broker or agent than the residual commissions paid every year thereafter. I like to clarify this so our clients know that if we make a recommendation for a new Medicare Advantage Plan, there isn’t much of an incentive to do so since we will be paid a commission if you keep the old plan as well. It comes down to what plan is going to give you the best coverage for you initial year in Medicare as well as each year after. As plan are subject to changing each year, it’s common for clients to move Medicare Advantage Plans. Again, we are compensated for helping you maintain your plan annually. Therefore, contact us so we can service your plan as well as answer questions about your coverage when you have questions.
We are able to offer independent advice to our clients as we are able to provide plan comparisons from multiple plans and multiple insurance companies. If you ever have a question about a new plan available in your area, or something you’ve seen on television, please contact us. We will help you review the plan to see if it’s something that you would benefit from changing to during the Annual Enrollment Period (AEP) for the following year.
Medicare Advantage & Prescription Drug Plan Compensation
Medicare Advantage and Medicare Prescription Drug plan commissions are not based on a percentage of premium. Therefore, you can be confident when reviewing plans with MedicareSupplementMentor.com that we have no incentive to direct you towards a specific plan based on your monthly premium.
Medicare Prescription Drug Plan Commission (Part D)
Similar to the Medicare Advantage Plans, we are paid a fixed amount from the insurance company for enrolling clients in Medicare Prescription Drug Plans. The Medicare Prescription Plan commission we receive is not based on the premium you pay for the Medicare Prescription Drug Plan, just like Medicare Advantage Plans– both fixed commissions. We are compensated exactly the same for a $10 a month plan as we are for a $100+ a month Medicare Prescription Drug Plan. Medicare Prescription Plan premiums that our clients pay monthly to the insurance company are exactly the same as the premiums for those who enroll directly through a call center for the same plan. Yes, 100% the same. We receive a Medicare Prescription Plan commission for helping you initially enroll in the plan. We are also compensated each year you choose to stay in the plan and continue coverage with that particular insurance companies Part D product.
Medicare Prescription Plan commission is not based on your premium.
When we recommend to move your drug plan during AEP, it is likely because the plan you’re currently in has changed. For example, it may not cover your prescription list as well the upcoming year. Medicare Prescription Drug Plans are the plan type that change most often year to year. You’ll likely be making updates to your drug coverage every year or every couple years to keep up with annual changes. We help our clients review Part D plans every fall when they ask us for advice. If you have more questions about how Medicare Prescription Drug Plans work, and/or how we are compensated for providing this service, please contact us. We would are more than happy to review your current plan and answer any questions you may have.
Broker compensation transparency is the key to our success.
Whether it be your first plan enrollment, or moving to another plan, we will disclose our Medicare broker compensation. We will outline how we are paid for implementing your plan as well as any annual residual commissions, if applicable. We look forward to helping you shop and compare Medicare insurers to find your Medicare insurance plan.
