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How Medicare Agents Are Paid

Medicare agents are paid by commission for new sign-ups and renewals, but customers do not directly pay for their agent’s commission. It is better to choose a non-captive agent.


When a Medicare agent has a customer, they receive a commission. This is the main way in which they earn their money. In 2021, the maximum commission amounts are $539 for a new Medicare Advantage plan with drug coverage and $81 for a new Part D plan. This, however, is the maximum—not all states and regions provide this full amount.

Agents also receive a commission when their customers renew their plans. In 2021, the renewal commission maximums set by the Center of Medicare Services (CMS) are $270 for Medicare Advantage plans with drug coverage enrollments and $41 for Part D enrollments.

Supplement plan commissions vary greatly between providers because they are not as heavily regulated by the CMS. However, the typical commission is between 15% to 26% of the annual deductible.

These renewals are actually very beneficial to the consumer as well as the agent. Because agents are reliant on you to come back to them for renewal, they will stay up-to-date on your coverage and make sure all of your needs are taken care of, so that you are satisfied and come back. Not only that but because agents receive a very similar payment for a new enrollee, you know that if they are recommending you to a new plan, they truly want to help you, not just make money.

Buyers Don’t Pay Commissions

Don’t worry, however—when you buy a plan, you are not paying for this commission. Your price will fall under the same government standard no matter what. The insurance company as a whole pays this commission.

Why the “Non-Captive” Agent is Better for the Buyer

There are 2 main categories of agents—the “captive” and “non-captive” agent. Captive agents are tied to one specific insurance company, provider, and plan. So, when you work with them, they will be working very hard to sell you on their one specific plan rather than searching the entire market of availability.

The non-captive agent, on the other hand, is independent from any specific insurance plan. Typically, they work with an equally independent agency that searches for plans throughout the market. When you get advice or buy a plan from one of these agents, then, you know you are getting an unbiased, real perspective on what works best for you.

Choosing an Agent

When you’re choosing an agent, then, look for a non-captive agency. There is no real way to consider the agent’s commission rate in your decision, but just know that, as long as they’re non-captive, you can count on them to give you unbiased help and continued guidance throughout your time with them and the plan.

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