What Are Medicare Agents and Brokers?

Licensed Experts to Help You Make Choices

Medicare and its numerous plans can be quite confusing. Friends and online guides can be very helpful but having an expert to guide you in choosing the best plans for your individual needs has its advantages. This is where Medicare agents and brokers come in.

What Are Medicare Agents and Brokers?

A Medicare insurance agent is a licensed expert that helps you review and evaluate Medicare plans and their benefits, and guides you in choosing a suitable one.

There are two kinds of Medicare insurance agents. The first is the independent Medicare agent. This type of Medicare agent works with many different insurance companies and can enroll you in health plans from any of them.

The second kind is the captive Medicare agent. Unlike independent agents, captive agents partner with only one insurance company and are limited to plans from that particular insurer when assisting Medicare beneficiaries.

A Medicare insurance broker is quite similar to an independent Medicare agent. They're not bound to just one insurer. They can educate you about and enroll you in plans from different insurance companies.

Older woman meets with Medicare agent
 Terry Vine / DigitalVision / Getty Images

Independent vs. Captive Agent or Broker

Independent Medicare agents and brokers may seem like the most intuitive choice to make. They have some advantages over captive agents.

For one, because they represent different insurance companies, you get to choose from a wider variety of plans when working with them. And because they're not employed or bound to just one insurer, you're more likely to get objective recommendations from them.

However, the downside is that there's a chance they don't have comprehensive expertise on the plans individually simply because they represent so many.

On the other hand, working with a captive agent means that you get advice and recommendations from an expert who likely has extensive knowledge of the health plans they sell. The disadvantage with captive agents is that you don't get to explore techniques from other insurance companies that may fit your needs better.

How Can a Medicare Broker or Agent Help You?

Medicare agents and brokers are very knowledgeable about Medicare plans. Every year they have to complete training and pass a test on their grasp of Medicare and its health and prescription drug plans. Here are the main ways Medicare agents and brokers can help you:

Review Health Plans

Buying health coverage can be expensive. For this reason, you want to make sure that you end up with a plan (or combination of plans) that suits your needs the most. But Medicare plans, their benefits, rules, and exceptions can be quite overwhelming to navigate on one's own.

A Medicare agent or broker can help you streamline your options and eventually settle on one. They'll speak with you and gain a solid understanding of your finances and health needs and then offer you plans that fit within those established parameters. Once you make a decision, the agent will enroll you in the plan.

Evaluate Your Current Coverage

Medicare agents and brokers can help you review your current coverage to see if it still meets your needs. If it doesn't, they can present you with options to choose from and help you change plans.

Save You Time and Effort

An advantage of using an experienced Medicare agent or broker is that you can maximize efficiency on your search and still get great value. Without assistance from an agent or broker, if you want to have a variety of options to evaluate, you have to interface with different insurers—a process that can be time-consuming.

Assist With Medical Underwriting

If you try to purchase a Medigap plan outside of your open enrollment period, the insurance company doesn't have to offer you the same premium offered during your open enrollment premium. Instead, they can decide to go through the process of medical underwriting.

An underwriter will assess your current state of health, and use that to determine the plan's premium. The insurance company may also choose not to enroll you in the plan at all because of underlying health conditions (if any).

A Medicare agent or broker is well-positioned to help you determine if you'll meet the underwriting requirements for the particular plans you're considering.

Do You Pay?

No, you don't pay any fee for the assistance of a Medicare agent or broker. Using their services is completely free.

So how then do they get paid? Their compensation depends on the kind of agent or broker they are. Some agents are employed directly by the insurance companies they represent. In contrast, others have merely have contracts based on enrolments they make.

Most agents get paid by commission. When they enroll someone in a plan, they receive a payment for the first year of the policy. And for every subsequent year the person remains on the plan, the enrolling agent or broker gets the initial amount.

The commission they receive for enrolling someone in a plan is not fixed. It's determined by the contracts they have with the insurance company.

Considerations for Choosing One

There are a few things you should look out for when selecting a Medicare agent or broker to assist you. 

  • Experience: You should go with an agent or broker with substantial experience selling Medicare plans in your state. Plan availability, benefits rules, and exceptions differ from state to state. So you should go with an agent or broker with substantial experience selling Medicare plans in your state.
  • Licensure: Ensure that the Medicare agent or broker you select is licensed in your state. You can check with your state insurance department to verify this. All you need is the agent's license number, which you can get directly from them or find on their business card.
  • Recommendations: Choose a Medicare agent or broker that comes highly recommended by the people they've worked with. Ask the agent to provide you with references you can contact. Get in touch with those references and find out their experience working with the agent or broker.
  • Plan specialization: Ask about the plans the agent or broker you're considering specializes in (if any). For instance, some Medicare agents and brokers focus only on enrolling beneficiaries in Medigap plans. And so, if a Medicare Advantage plan would instead be a better choice for you, you won't find out because the agent might not present them to you.

A Word From Verywell

Using the services of a trustworthy and knowledgeable agent or broker can speed up your search. Plus, you don't pay anything for it. So while you don't have to work with a Medicare agent or broker, if you decide to, make sure they're licensed and have a good reputation. You can use the Centers for Medicare & Medicaid Services' (CMS) search tool to find one in your area.

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  1. Centers for Medicare and Medicaid Services. Agent broker compensation. Updated October 3, 2019.