What Are Commissions Like

Medicare Advantage

Medicare Advantage as well as Medicare Prescription Drug Plan maximum commissions are regulated by CMS the organization that runs Medicare. Most carriers pay maximum street level commissions to agents. We'll look at 2022 numbers since elections for AEP 2021 are for policies starting in 2022. Here's the 2022 grid:

Let's break some of this down.

"Initial Year" commissions generally means the first time a client has been enrolled on Medicare Advantage or Medicare Prescription Drug Coverage. Generally this is for people first entering Medicare. This amount is generally paid regardless of when in the year the policy is written and it is usually paid in two separate payments.

"Renewal years" is generally a client who has been moved from one MA/ PDP plan to another one and the renewals the years there after. This is the annualized value of the renewal rate you're paid as long as the client keeps the policy with you. It will renew until the client moves off the plan. This is what you'll be paid for most of your AEP business. First year commission is advanced, renewals are paid monthly, and generally these commissions are pro-rated if the policies are written after AEP.

PDP commission rates are only paid for stand alone Prescription Drug Plans. You don't get a second commission if you sell a Medicare Advantage plan with included Prescription Drug coverage.

AEP commissions (October 15 - December 7th elections for the following January) are not paid until January or February.

Medicare Supplement

Medicare Supplement policies are paid as a percentage of annual premium and tend to trail off after time.

Exact commissions vary from state to state, policy to policy, and company to company. Generally it is in the ball park of 20% from 3-7 years before the commissions start to trail off.

You can extend this commission period by re-writing the client with a new carrier if their rate goes up to save them money.

The average annual premium is around $1,400.

Carriers offer to pay an advance and it's common for them to charge a nominal interest rate on advances.

Ancillary Lines

Products like DVH (Dental/Vision/Hearing), HIP (Hospital Indemnity Plans), and Cancer plans pay as well. These plans tend to be first year heavy with minimal renewals.

Actual commissions vary based on product, carrier, and state, but are generally in the 50% of annual premium for first year.

Selling a $300 annual premium plan tacked on to a medical plan can be a real sweet $150 bonus and can seriously add up. We can train you to help attach these policies to up to 50% of your sales.