Agent Broker Compensation
One of the key benefits that consumers should know about is that they have a financial safety net, called the maximum out-of-pocket . This helps protect the consumer from unexpected and often expensive events, like a hospital stay. To understand how agents’ business decisions might affect a beneficiary’s plan choice, we simulated an online plan-shopping experience and compared plan choices against the options provided through Medicare.gov. Our analysis shows the important role licensed agents play in shaping Medicare choice for beneficiaries and the extent to which carriers rely on them for growth. It also shows how the agent business model may affect beneficiary choice and overall Medicare literacy. Based on our analysis, the average premium in 2020 for Medigap was $1,660, meaning an agent would be paid $322 for the first year and $166 as a renewal commission. Because premiums and rate adjustments for policies can vary, commissions may shift based on beneficiary, policy, and locati...