I’ve written before about why you should not trust health insurance agents. As is often the case, the answer lies in financial incentives. In Medicare Advantage, insurance agents earn different commissions based on the Medicare Advantage plans they steer you to. If insurers pay them more to steer you to a worse Medicare Advantage plan, they have a powerful incentive to mislead you.
What’s worse is that insurers don’t pay any commissions for agents to enroll you in traditional Medicare. And, increasingly, they do not pay commissions to sign you up for a stand-alone Part D plan, which most people need in traditional Medicare. Centene stopped paying commissions to insurers who enrolled people in their Part D stand-alone plans in 2024.
To the extent insurers pay commissions for enrollment in Medigap plans–supplemental coverage that fills gaps in Medicare–the commissions are significantly lower than the commissions in Medicare Advantage.
For reasons that I do not understand, the federal government caps commissions that insurers can pay insurance agents but allows insurers to pay different commissions to insurance agents for different Medicare products and Medicare Advantage plans. As a result, increasingly, insurers are reducing or eliminating commissions on certain Medicare Advantage plans–often the best ones–so that agents won’t recommend them. And, CMS allows commission changes mid-year.
Adjusting or eliminating commissions mid-year is an insurer tactic that hurts less savvy people with Medicare and that the Centers for Medicare and Medicaid Services should not permit. Rylee Wilson reports for Becker’s Payer Issues on several insurers that have recently changed their commission structure for Medicare products. For example, UnitedHealth stopped paying commissions on more than 100 of their Medicare Advantage plans, including their PPO plans, which provide coverage outside of your community.
Blue Shield of California similarly stopped paying commissions for some of its Medicare Advantage PPOs earlier this month. Cigna stopped paying commissions for some Medicare Advantage PPOs last year. Elevance and Aetna also ended some commissions.
Here’s more from Just Care:
- Caring for mom, dad, older adults: Ten key pieces of information you need
- Medicare Open Enrollment: Don’t trust insurance agents
- Medicare Advantage needs an overhaul
- Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
- You still can’t trust Medicare Advantage plan provider directories
