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Understand the Incentives to Sell Medicare Advantage Plans

Dear Colleague,

A previous video addressed the federal government’s crackdown on misleading advertising of Medicare Advantage Plans. Another previous video discussed federal litigation brought against a number of insurers offering Medicare Advantage plans alleging their use of inflated or inappropriate risk adjustment methodologies to increase plan payments.

Medicare Advantage enrollment has grown over recent years and it is clear there is BIG MONEY to be made by offering them. That Humana announced earlier this year its planned withdrawal from all commercial markets in order to concentrate on its government programs, particularly Medicare, underscores that reality. It seems quite counterintuitive that it could be more profitable to specialize in government products in favor of offering fully-insured and self-insured products to younger, healthier populations.

But I digress. Today we want to focus on how lucrative it is for insurance brokers to sell Advantage Plans. Internet research shows that commissions vary by state but at the high end for 2024 are $762 for a new enrollment and $381 for a renewal to a low of $611 for a new enrollment and $306 for a renewal. The potential to earn commissions when an individual decides to stay in original Medicare is so much lower. There are commissions associated with selling Medicare supplements but they are much smaller because those products are providing coverage after original Medicare has paid. There are also commissions on the sale and renewal of Part D plans but those are also much smaller because Part D plan premiums are relatively modest.

We are fee-based consultants who don’t accept commissions from insurers but we often are included in email distribution lists that are informative. I have copied and pasted below from a recent email I received:


Earn up to $150,000 for years with residual income from Medicare Advantage.

The trick is having the best FMO!

We are a family-owned FMO, and we offer you … Proprietary Medicare products with training Training and back-office support, Top-of-the-line sales marketing assistance, Contracts with top carriers and commissions, and more!

Download Our “Unlock the Secrets to Skyrocketing Your Medicare Sales with These 17 Proven Strategies”

We have removed links from this email copy but otherwise it is exactly what was forwarded to me. Of course, this field marketing organization (FMO) works to provide support to brokers and agents to increase Advantage Plan sales but the email perfectly underscores the incentives at work.

There are ethical, reputable brokers who listen to their clients and help them make good decisions about whether to stay in original Medicare or choose an Advantage Plan. Nevertheless, the incentives to sell Advantage Plans are very clear.

If you are an individual transitioning onto Medicare or considering your choices during Annual Open Enrollment, become informed about your options and do your homework. And don’t be confused by a friend or colleague who might have an Advantage Plan as a result of retiree medical. Those are far kinder, gentler products with richer benefits than what an individual can buy. Everyone should be well informed about healthcare coverage options. You don’t want buyer’s remorse.