How Medicare agents are paid
The chances are that we have all dealt with a sales rep or an agent in the past, who promised us the world in return for very little. They tell us that all the money we give is an investment into ourselves, and as consumers, we are left wondering – okay, then how do you get paid?
A medicare agent is a middle man who deals directly with both you as a consumer and the Medicare corporation. They are experts in their field, and they can be invaluable when it comes to defining what the different package plans and options mean and which is best for you. But the question around how these agents get paid is a good one – and from a consumer perspective, it all comes down to trust.
The fact is that if you don’t know how an agent is getting paid, it can be easy to start to view their suggestions and recommendations as a means to their own ends. Are they just suggesting a particular package because it is the one they will earn the most from? Are their suggestions really made in line with your needs and best interests?
From a consumer-organization point of view, letting you know how Medicare agents are paid is important to gaining that all-important trust.
How Do Medicare Agents Get Paid?
The first thing to note is that the agent’s fee does not get pushed onto you as a consumer. In fact, the main bulk of income coming to a Medicare agent is paid by the insurance company directly as a commission for every sign up to Medicare that the agent confirms.
How do you know that this commission isn’t coming from your own pocket? All you have to do is look at the figures. From a consumer perspective, a Medicare package obtained through your application will cost the exact same as one identified by an agent. No additional fees and no hidden extras.
Another avenue of income for Medicare agents comes from renewal commission, whereby the agent receives an additional commission bonus if you, the consumer, decide to renew the same Medicare package again.
Provided you move forward into your Medicare plan search with an independent agent who is not tied to one specific insurance company, you can rest assured that the service you are getting is unbiased and fair. It serves the agent to present you with a plan and package you are happy with – and if you decide to stick with the plan on a retainer, they will be rewarded for it.
How to Ensure You’re Working with a Good Agent
For the most part, any Medicare agent found through a reliable source will be working independently and thus will only operate within your best interests at heart.