First, you have to choose between Traditional Medicare (for Medicare Parts A and B) and a private insurer’s Medicare Advantage or Part C plan. Then, if you’ll take Traditional Medicare, you’ll likely also want a Medigap supplemental insurance plan and a Part D prescription drug plan.

So, you may want to get help from a Medicare broker or agent (a broker works for someone who wants a Medicare plan; an agent represents one or more insurers). Almost one in three people aged 65 and older use one, according to Gretchen Jacobson, vice president of Medicare at The Commonwealth Fund, a health care research foundation.

“The Medicare population is growing, so more organizations are seeing that as an opportunity to sell Medicare policies,” says Josh Hodges, the National Council on Aging’s chief customer officer. “It puts even more pressure on consumers to make sure they’re getting the guidance and advice they need.”

Before hiring a Medicare broker, though, it’s important to understand how they work, how they get paid, and how to separate the best from the rest.

“Navigating Medicare is an incredibly complex process, and a broker is a good way to navigate that,” Hodges notes. “But you’ve just got to make sure you’re vetting the insurance broker like you vet any other professional.”

Scathing reports on Medicare brokers

Medicare Advantage plan brokers are more regulated than Medigap and Plan D brokers. But two recent Senate reports revealed seamy sales practices of some Medigap and Medicare Advantage plan brokers.

Sen. Elizabeth Warren’s (D-Mass.) recent investigative report, described the “pervasive, secret” sales incentives Medigap brokers working for major insurers receive.

In the 2022 Medicare open enrollment period, Warren’s researchers found, at least 32 companies provided cash bonuses and lavish vacations to places like Maui and St. Thomas as incentives to brokers for selling certain Medigap policies.

“The widespread use of secret perks raise questions about whether agents and brokers are recommending certain Medigap policies because they are the right fit for seniors, or because they yield credit toward the fanciest vacations or most generous bonuses,” the report concluded.

Last fall, Sen. Ron Wyden (D-Ore.) and the Democratic staff of the U.S. Senate Committee on Finance released a scathing report about the way Medicare Advantage plans are often sold.

It looked at Medicare Advantage marketing complaints from 14 states and found, among other things:

• Insurance agents telling prospects that their doctors were covered by their plans when the physicians were actually out-of-network, meaning the policyholders would need to pay out of pocket for them
• A Medicare Advantage insurance agent calling people 20 times a day, trying to get them to switch their Medicare coverage
• Medicare beneficiaries being disenrolled from their plans due to misleading and aggressive marketing practices of agents and brokers

Low-quality vs. high-quality medicare brokers

Selling Medicare policies can be highly lucrative. One insurance agency is advertising an upcoming “Six-Figure Medicare Agent Summit” in Salt Lake City, charging $200 to $5,000 to “help Medicare Agents grow and scale their business!”

Darwin Hale, CEO of Advocate Health Advisors, a marketing organization whose agents sell Medicare policies, says: “I’ve heard horrible stories of short-term, transactional” brokers who “basically wanted to make the sale and go away as soon as possible, never to be heard from again.”

High-quality brokers, Hale notes, “invest a lot of time and energy in the beginning of the relationship and the focal point is the client.”

How Medicare brokers get paid

You don’t pay to use a Medicare broker or agent. But how, and how much, Medicare brokers and agents earn by selling policies varies enormously.

Independent agents represent multiple insurers and work on commissions paid by the companies; captive agents work for just one insurer and receive a salary from the company as well as a commission with a lower rate than an independent agent’s.

By contrast, a broker lets you choose among different Medicare Advantage, Medigap or Part D prescription policies and then sends you to an agent once you’ve decided which to buy. Brokers are paid commissions from the insurers and the rates are set by state insurance regulators.

The umbrella agency for Medicare, the Centers for Medicare and Medicaid Services (CMS), sets maximum commissions for Medicare Advantage plans and standalone Part D plans, but doesn’t set minimum commissions, says Jacobson.

The Biden administration has issued a proposed rule cracking down on the marketing of Medicare plans by insurers and salespeople, “but it doesn’t touch agent commissions,” says David Lipschutz, associate director of the Center for Medicare Advocacy, at the recent American Society on Aging’s OnAging 2023 annual conference.

Typically, commissions are twice as much for signing someone up for a Medicare Advantage, Medicare or Part D plan than for subsequent years if someone stays in the plan, according to CMS.

For example, the national maximum initial commission for a Medicare Advantage Part D plan is $601; it’s $301 for a renewal on that type of plan, according to the Tidewater Management Group, a marketing firm for Medicare agents.

Brokers and agents also tend to earn higher commissions selling Medicare Advantage plans than Medigap plans or Part D prescription drug plans.

What Medicare brokers and agents say

Last fall, when the public opinion research firm Perry Undem held focus groups with over two dozen Medicare brokers and agents, they heard that these salespeople generally recalled getting higher commissions for enrolling people in Medicare Advantage plans than Medigap plans.

“Medigap plans and Medicare Advantage plans often have incentives for enrollment targets,” says Jacobson. “So, for example, if you enroll 20 people in a company’s plan over a one-week or two-week period, they’ll provide a bonus for every person you enrolled.”

The commission structure of Medigap plans also incentivizes the sale of plans charging higher premiums, the brokers and agents says. And, they noted, commissions for standalone Part D plans were viewed as too law and not worth their time.

“According to the brokers and agents, insurers now are oftentimes not even paying a commission for standalone Part D plans or paying a really low commission for those plans,” says Jacobson.

Most of the brokers and agents says they’d personally choose Traditional Medicare with Medigap over Medicare Advantage plans. The reason? Better coverage and choices, especially as people get older.

“Beneficiaries lack information, however, about how brokers and agents winnow down plan options and what role financial incentives might play in the advice they give,” a February 2023 Commonwealth Fund article about the focus groups says.

How to find a good Medicare broker or agent

A good Medicare broker “knows which doctors are keeping people happy and which [insurer’s] front office is behaving,” says Hale. “A good broker builds trust and rapport.”

If you want to hire a Medicare broker or agent, Hale advised, get referrals from your doctors as well as from friends and family members on Medicare. Then, “interview a broker the same you would a Realtor to get a few quotes on your house,” he adds.

You may also want to look at the National Council on Aging’s (NCOA) Medicare Standards of Excellence list to find agents and brokers working in your best interest. Currently, four organizations have completed NCOA’s review and training process to meet its Standards of Excellence.

The standards include ensuring: you won’t be inappropriately steered to buy insurance products; agents won’t be paid differently based on the company or plan they recommend; you can choose from a broad range of the best coverage options; you’ll get comprehensive information about those options and plan choices; you’ll get excellent and prompt service and the insurance brokerage and its agents comply with Medicare and state insurance regulations.

The four companies now on the list are: Alight Retiree Health Solutions (for Medicare Advantage and Part D plans); Ask Chapter; Fidelity Medicare Services (for residents in 17 states) and Medicare Choice Group.

When choosing a Medicare broker or agent on your own:

Ask how long they’ve been selling the plans and how they’re trained 

“At least three years of experience, in my opinion,” says Hale. “If it’s a new salesperson with a manager who’s guiding and training them, that’s okay.”

Ask how many health insurers they represent, and which ones 

“I would encourage older adults look for brokers who have a wide variety of plans,” says Hodges.

The Commonwealth Fund’s focus groups found that brokers don’t sell all plans in their geographic area; they chose which to sell based on how fast insurers answered their questions, client feedback and sometimes plan benefits. By contrast, Affordable Care Act Marketplace [salespeople] “are required to sell all the plans,” Jacobson says.

Ask how, and when, you can reach them 

“They should have open communication,” says Hale. “They should give you their cell number and make you feel comfortable to call them anytime.”

Later this year, the National Association of Insurance Commissioners expects to release a customized online search tool to let you see if someone is licensed to sell Medicare policies. Medicare agents and brokers need to be licensed.

Other sources of medicare information

NCOA’s Hodges and The Commonwealth Fund’s Jacobson says that to make smart Medicare decisions you could also contact your State Health Insurance Assistance Program (SHIP) for free, unbiased, expert information — but not recommendations of particular plans.

The U.S. government’s Medicare.gov site has detailed information about how Medicare and the various types of Medicare plans work, as well as a Medicare Plan finder tool and a guide to shopping for Medigap policies. There’s very little information about Medicare brokers or compensation on the site, though.

The American Association for Medicare Supplement Insurance site has a search tool to find local Medigap agents, too.

“I very much encourage people to buy Medicare the way they buy their house: thoughtfully,” says Hodges.