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How much do insurance agents make from Selling Medicare plans?

How much do insurance agents make from Selling Medicare plans?

Selling Medicare plans is not for anyone. It takes a lot of hard work, commitment, constant education, and sales skills. If you’re thinking about selling Medicare, you’ll probably want to know how much money you can make. 

To give you a clear understanding, we’re going over all the basics, including how working with an FMO will not boost your commissions, but will make the administrative side of it much easier.

How Much Does an Insurance Agent Make From Medicare Products? - Medicare Insurance Agent

How Much Does an Insurance Agent Make From Medicare Products?

How much an insurance agent makes on Medicare sales depends not only on how many beneficiaries you enrolled, take the following into consideration.

  • Ad cost
  • Referrals incentives
  • CRM cost
  • Renewals 
  • New Enrollments
  • Business Cards & Flyers
  • Errors & Omission Policy 
  • AHIP Certification 

 

With the right strategy and FMO agency like Team Alvarez giving you admin support, leads, and training, selling Medicare products is a very rewarding business model.

Generally, insurance agents often earn two types of commissions when selling Medicare plans: A dollar amount per application (Medicare Advantage and prescription drug plans) or a percentage of the premium sold (Medicare Supplements). 

Medicare Advantage and Part D Commissions - Medicare Broker

Medicare Advantage and Part D Commissions

Medicare Advantage commissions are paid per application. Initial commissions and renewal commissions are how they get it. Typically, both Medicare Advantage commissions and Medicare Part D plan commission payments are paid one year in advance. 

In other words, the companies pay the full year’s commission upfront. 

When an agent creates a new sale or the beneficiary enrolls in a new, “unlike” plan, carriers payout first commissions (different types). 

Carriers pay renewal commissions to insurance agents every year and beyond if the beneficiary remains enrolled in the plan or enrolls in a new, “similar” plan (same type).

 

The maximum broker compensation for Medicare Advantage in 2022 will be $715 for original sales and $358 for renewals. 

 

According to the PDP, the nationwide maximum broker compensation for original sales in 2022 is $87 and $44 for renewals. 

 

Keep in mind that you may be eligible for commissions on both the MA and PDP plan types if you sell a Medicare MSA plan! (Because Medicare MSAs don’t include prescription drugs, you can sell a PDP alongside those MA plans.) 

The Centers for Medicare & Medicaid Services (CMS) establishes yearly maximum broker commissions for Medicare Advantage and Medicare Part D, but insurance companies are not compelled to pay these amounts. 

The amount you receive from Medicare Advantage and PDP sales may depend less on the carrier and your contract with them.

Medicare Supplement Commissions

Agents get a share of the premiums of the insurance they sell while selling Medicare Supplements. 

CMS does not specify a maximum broker commission for Medicare Supplements, unlike Medicare Advantage and Part D. 

These commissions differ from one carrier to the next and from and to the next.

As a result, there may be a big difference in payment amounts from one carrier to another. 

This depends on both the plan and the company. 

Some carriers pay the commissions as earned, but the majority pay on a 9-month advance, with a few paying up to a 15-month advance. 

Commissions With an FMO vs. Without an FMO - Medicare Broker

Commissions With an FMO vs. Without an FMO

Even if the commissions go through an FMO first, carriers pay independent insurance agents for the business they write. 

Agents need to understand that carriers and FMOs are paid separately. 

The relationship with an FMO is similar to your relationship with your clients. 

You don’t have to pay the FMO anything, just as your clients don’t have to pay you anything. 

Commissions are paid by the carrier, just as the carrier pays the FMO for their override.

As a result, earning money with an FMO is comparable to earning money without one. 

We believe that using an FMO will allow you to make more commissions! 

An FMO may give agents a lot of value in terms of training and back-office support, such as licensing, contracting, leads, marketing co-op, sales tools, submitting business, supplies, commission tracking software, and so on.

Either you are a seasoned agent or a new agent learn why Health Insurance Agents choose Team Alvarez Insurance Services as their FMO. 

You may be able to earn more sales as a result of the added assistance. 

A Note About 'Assigned Commissions'

An agent who works with an FMO frequently receives commissions straight from the carrier. 

In some situations, an FMO may request that agents “assign” their commissions to them (e.g., if they provide the independent agent with leads, advances, etc.). 

The carrier may ask agents to assign their commissions to their FMO in other cases (e.g., the carrier only pays direct contracts). 

When you allocate your commissions to the FMO, the carrier pays the FMO, and the FMO pays you. 

Agents who sign an Assignment of Commissions contract should be cautious because their upline may be able to keep their renewals if they want to leave.

If done correctly, Medicare sales are quite profitable as it offers multiple pathways for income and success. 

Your goals as an independent agent will emerge successfully by finding the right FMO and committing to a solid strategy. 

Hopefully, you now have a better view of how much Medicare agents may earn and that working with the right FMO will only help your earnings rise, not damage them!

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