Note: The proper term for what some people call a “Medicare Agent” in this situation is a “licensed insurance agent.” Licensed insurance agents help you find and enroll in Medicare plans, but they are not directly affiliated with Medicare.
Navigating Medicare can often feel like trying to solve a complex puzzle. So many plans, so many insurance companies, and so many sales pitches.
Which plan is actually right for you? Who can you trust?
If you’ve wondered how licensed insurance agents fit into this puzzle, particularly how they’re compensated for their services, you’re not alone.
Licensed insurance agents are typically paid commissions by the insurance companies whose plans they help people enroll in. This doesn’t necessarily mean their advice is biased or that they don’t have your best interests at heart.
There’s a bit more to the story, and it’s important to understand the full picture so you can navigate Medicare confidently.
Here’s How Licensed Insurance Agents Get Paid
When a licensed insurance agent helps you to enroll in a plan, the insurance company they represent usually pays them a commission.
For Medicare Supplement plans, the commission is typically a percentage of the plan’s premium, which means the licensed insurance agent’s payment would get a higher percentage if the plan’s cost were higher.
For Medicare Advantage plans, the commission is a flat fee that’s decided by the government (CMS).
Medicare Advantage Regulations and Safeguards That Protect You
For Medicare Advantage in particular, The Centers for Medicare & Medicaid Services (CMS) regulates how licensed insurance agents are paid to protect you. These regulations include caps on commissions to prevent licensed insurance agents from pushing higher-cost plans unnecessarily.
They’re also trained to follow strict guidelines that prioritize your needs when recommending plans.
Licensed insurance agents should typically present you with options that fit your medical needs and financial situation, not just the ones that offer them the highest pay.
Choosing the Right Licensed Insurance Agent: Red Flags and Green Lights
In an ideal world, every licensed insurance agent would have your best interests at heart. However, it’s wise to approach this decision with a healthy dose of skepticism.
A trustworthy licensed insurance agent will be transparent about their commission structure and how they’re compensated.
They should also be more interested in understanding your needs than pushing specific plans. Be wary of licensed insurance agents who don’t fully explain your options or seem to promote one plan heavily without saying why it works for your unique situation.
Also, if you want a way to test whether an agent is unbiased, ask them which plans they’re certified to represent. If they don’t represent all of your available options, that’s a red flag. How can they be unbiased if they only represent 1 or 2 plan types?
What Does a Good Licensed Insurance Agent Look Like?
A good licensed insurance agent brings immense value beyond just enrolling you in a plan.
They can help you understand the complex Medicare rules, potentially avoid costly penalties, and select a plan that genuinely covers your specific healthcare needs.
Their guidance can save you time, money, and a lot of headaches.
A respectable licensed insurance agent views their commission not as a goal in itself but as a byproduct of providing valuable, client-focused service.
So…How Do You Know a Licensed Insurance Agent Is Truly on Your Side?
It’s valid to question whether a licensed insurance agent’s recommendations are influenced by their potential earnings.
To navigate this, don’t hesitate to ask direct questions about how they get paid and why they’re recommending specific plans.
A licensed insurance agent who’s truly on your side will welcome these questions and provide clear, satisfactory answers. They’ll usually be an advocate for your needs, guiding you through the Medicare maze with your best interests as their compass.
Potential Signs of a Trustworthy Licensed Insurance Agent:
- Transparent Communication: A good licensed insurance agent is open about how they are compensated and how it might influence their recommendations. They don’t shy away from discussing commissions and are clear about their relationship with Medicare (they aren’t directly affiliated with Medicare) and insurance companies selling Medicare plans.
- Listening Skills: They spend more time listening than talking. By understanding your healthcare needs, financial situation, and concerns, they can provide tailored advice that genuinely benefits you.
- Comprehensive Options: Instead of pushing a single plan, a trustworthy licensed insurance agent presents a range of options. Did you know some agents only contract to represent a few options? Those agents are clearly biased because they can’t talk to you about plans they don’t represent. Instead, look for an agent who represents all of your options so they can help you compare them. They should explain the pros and cons of each, ensuring you understand how each plan aligns with your specific needs.
- No-Pressure Sales: You never feel rushed or pressured to make a decision. A reputable licensed insurance agent knows that choosing a Medicare plan is a significant decision and gives you the space and time to consider your options.
- Educational Approach: They aim to educate rather than sell. This includes explaining the different parts of Medicare, how plans differ, and what potential penalties and costs are involved, ensuring you make an informed decision.
- Follow-Up Support: A reliable licensed insurance agent remains accessible even after you’ve enrolled in a plan, ready to assist with any questions or adjustments your changing needs might require.
Red Flags to Watch Out For:
- High-Pressure Tactics: If a licensed insurance agent pressures you to make a quick decision or sign up for a plan without giving you time to consider, it’s a clear red flag. A good licensed insurance agent respects your need to take your time.
- One-Size-Fits-All Recommendations: Be cautious if a licensed insurance agent seems to recommend the same plan to everyone, regardless of their unique needs. This could mean that they’re not contracted to represent other plan options, so they’re not showing them to you.
- Lack of Clarity: If a licensed insurance agent is vague about plan details, costs, or how they’re compensated, consider it a warning sign. Transparency is key in a trustworthy agent-client relationship.
- Unwillingness to Explore All Options: A licensed insurance agent who dismisses your questions about different plans or doesn’t provide clear comparisons may not have your best interest at heart.
- Overemphasis on Upselling: Be wary if a licensed insurance agent focuses on getting you to buy additional products or more expensive plans without a clear, needs-based reason.
Recognizing these signs will equip you to choose a licensed insurance agent who genuinely seeks the best outcome for you.
Remember, a good licensed insurance agent should feel like a partner in your healthcare journey. They’ll guide you with expertise, integrity, and respect for your individual needs.
That’s exactly why our licensed insurance agents work on salary, NOT commission. Because if someone is on commission, how can they be unbiased? At PlanFit, our only incentive is to make sure you find the right plan for your needs. So if you’re interested in getting professional help at no cost to you, click here to set an appointment with a licensed insurance agent.
Empowerment Through Understanding
Understanding how licensed insurance agents get paid empowers you to make informed decisions about your healthcare coverage.
A good licensed insurance agent is a valuable ally in your healthcare journey. With the right knowledge and questions, you can find an agent who genuinely has your back, ensuring that your Medicare plan fits your needs.
Remember, the goal isn’t to find just any Medicare plan; it’s to find the right plan for you. With the right licensed insurance agent by your side, you can achieve this goal with confidence and peace of mind.
If you’d like to chat with a PlanFit-approved licensed insurance agent, you can click the button below: