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Medicare commissions are not as straight forward as we want them to be. Many agents are confused when they receive their commission deposits. That is why reading Medicare Commission Payments Explained may help unravel the mystery. It is important to note: commission payments require a certain amount of attention to detail.  

CMS and commissions

Each year the maximum allowable commissions for Medicare Advantage and PDP sales is set by CMS. The amounts vary by state and can usually be found online once they are available. Unfortunately, there are many different situations that determine how much of that commission an agent receives for each sale.

For the last several years, CMS has consistently raised the commission rates. The renewal amount differs from the amount agents receive for an initial enrollment. Renewal commission amounts also change annually and add up to half the amount of the initial enrollment commission rate. The rates are decided by state and each state is put into a group. The state groupings are (CA and NJ), (CT, PA and DC), (Puerto Rico and US Virgin Islands) and all the other states are in the “National” bucket.  The highest pay goes to CA and NJ, followed by CT,PA and DC, then the national bracket.  Puerto Rico and Virgin Islands pay the lowest amounts.

Watch a recorded webinar to learn more about commission payments CLICK HERE TO VIEW.

Initial payment, true up and pro-rata

In 2025, the max commission for an MAPD sale in CT is $705 with renewals at $353 for the year.  That sounds easy enough, but it is not that simple.  The amount of commission an agent receives depends on the situation.  We provide a breakdown below:

Medicare Advantage commission payments – new to Medicare 

If your client is new to Medicare, the carrier pays the full commission in two payments:  the intial payment, then the true up payment.  The two will total up to the full amount.  The renewal commission rate will be half of the full amount and pays over the course of 12 months starting in January. (Regardless of the effective date of the original sale).

New to Medicare Advantage but not new to Medicare 

If the client enrolls in a Medicare advantage plan for the first time, the commission is the same as a new to Medicare enrollment. The difference is how the carrier pays it out.  The commission is pro-rated.  In other words, the payment amount is based on the month the plan is effective.  So if someone is enrolled for a June 1 effective date, the agent receives 50% of the full commission. (They will be in the plan for 6 out of the 12 months.)  If the person is enrolled for a March 1 effective date, the agent receives 75% of the commission and so on. The renewal starts in January and the agent receives the full renewal amount.

Click here to find out what the 2025 commission rates are

Changing from one Medicare Advantage to another 

When your client changes from one MA/MAPD plan to another, the agent receives the same amount when they renew an MA/MAPD plan (half the new enrollment commission).  If you enrolled a PA client in an MAPD plan with a Jan 1 start date, the commission is $353. However, plan changes are also pro-rated and if you enroll a PA client in a plan with a March start date, you receive 75% of the $353. In other words, $264.75.

See what to do about non-commissionable PDP plans

Commission payments for AEP

The commission rules do not change during AEP although when agents receive their payment does.  Any clients agents enroll during AEP will not pay out until January. Insurance carriers are not permitted to pay them before then enrollment goes into effect. Therefore, most carriers pay out sometime during January.

Use the links below to learn more about our Medicare lead program and T-65 seminar program:

Medicare lead program

Medicare sales seminar program

Click here if you are ready to fill out an online contract and join the Crowe team

In some cases, Medicare beneficiaries miss an enrollment period due to a FEMA emergency. When this happens, beneficiaries may be eligible for a DST SEP. It is imperative that agents are aware of the New Medicare FEMA SEP rules to assist clients. The DST SEP is available to qualified individuals who miss an opportunity to enroll in a Medicare plan.

Medicare FEMA SEP  

The DST SEP is an enrollment opportunity CMS offers to Medicare beneficiaries affected by either weather-related emergencies or major disasters. The FEMA SEP lets those who miss a valid election period to either enroll in or disenroll from a Medicare plan. The enrollment takes effect the first day of the month after application is submitted.

This is only available in areas where FEMA, state or other local government officials declare an emergency or disaster. FEMA emergencies start when the incident occurs and lasts for two months up to one year after the start or the extension period begins.   

Important changes the the FEMA SEP

On December 3, 2024, CMS released a memo that announced changes to the DST election. These changes go into effect as of April 1, 2025.

If a beneficiary needs to submit an application using the DST election period either on or after April 1, 2025, the application must be submitted directly through CMS. Beneficiaries can call 1-800-MEDICARE or TTY 1-877-486-2048 to submit an application.

In other words, CMS will not accept applications that use the DST election even if they are broker assisted.

Any enrollment application that uses this election will be labeled as using an invalid election period. The plan will then attempt to contact the enrollee and obtain a valid election period. If the plan cannot verify a valid election period, the application will be denied.

Important: missing or invalid elections do not trigger the (RFI) Request for Information process. Therefore, beneficiaries do not have additional time to respond to the inquiry or correct their election.

Please note; applications and disenrollment forms will be updated to remove the DST election.

Reasons to use this SEP

There are varied opportunities to use the SEP. This ensures individuals have the coverage they need.

If the beneficiary resides where a natural disaster (earthquake, flood, wildfire, hurricane, tornado or other specific incident) resulting in a missed valid enrollment period. Sometimes disasters cause beneficiaries to have to leave their home. This may result in them missing their enrollment period and enable the use the FEMA SEP.

The SEP is sometimes available when a beneficiary relies on a family member or other caregiver who is impacted by a disaster and they are unable to assist them during their enrollment period. 

Other instances that allow for SEP use include; inability to access Medicare plan information or submit a timely enrollment due to a FEMA declared disaster. Enrollees may also use the SEP when the beneficiary’s healthcare provider of facilities are impacted by the disaster. This can result in the inability to receive necessary information to make an informed decision.

Rules for Eligibility for Medicare Disaster SEP  

In order to use the SEP, the beneficiary must live in the are where the disaster occurred. They must have missed a valid enrollment period (AEP, IEP, OEP) during the time of the incident as long as they did not already make a change during the enrollment period. It is also acceptable for those who need assistance from another person to complete the enrollment or make healthcare decisions.

Who cannot use this SEP

Anyone who has already changed their plan during a valid election period can’t use the FEMA election to change it again. Beneficiaries must call 1-800-MEDICARE or TTY 1-877-486-2048 to submit an application in a timely manner to avoid missing their window to enroll. 

Because navigating Medicare enrollment period options can feel overwhelming, we will explain one specific enrollment opportunity. For beneficiaries seeking flexibility in healthcare coverage, Medicare supplements provide a good option. Because of this, the Medicare Supplement birthday rule is an important policy to understand. This rule, available in certain states, offers a window of opportunity to change Medicare Supplement (Medigap) plans without medical underwriting.

What Is the Medicare Supplement Birthday Rule

The Medicare Supplement birthday rule allows beneficiaries to switch Medigap plans annually around their birthday without undergoing medical underwriting. This means insurers cannot deny coverage or charge higher premiums based on health status during the designated timeframe.

Medicare supplement plans help cover out-of-pocket costs not paid by Original Medicare, such as copays, coinsurance, and deductibles. However, outside of the initial enrollment period, switching plans typically requires medical underwriting, which can be a barrier for those with pre-existing conditions. The birthday rule removes this obstacle during its specific enrollment window.

States That Have the Birthday Rule

As of now, the Medicare Supplement birthday rule is not a federal policy; it is enacted at the state level. Currently, 8 states including California, Idaho, Illinois, Kentucky, Louisiana, Maryland, Nevada and Oregon have implemented variations of this rule. Each state’s version differs slightly in terms of timing and eligible plans:

California

Beneficiaries have 60 days from the first day of their birth month to switch Medicare supplement plans to enroll in one with the same or a less benefits. They also have the option to switch insurance carriers during this period.

Idaho

Those who reside in ID have 63 days from their birthday to switch Medicare supplement plans with the either the same or less benefits. They can also switch to another insurance carrier if they like.

Illinois

Beneficiaries in IL have 45 days from their birthday to change Medicare supplement plans with either the same or less benefits. This rule only applies to plans with the existing insurance carrier or an affiliate of the current carrier. The affiliate carrier was added in 2024. In order to To qualify for the birthday rule in IL, beneficiaries must be between 65 and 75.

Kentucky

As of 1-1-24, KY allows Medicare supplement enrollees to switch to another supplement carrier that offers a plan with the same benefits as their current plan. They must switch within 60 days of their birthday.

Louisiana

In the state of LA, beneficiaries are given 63 days from their birthday to switch to another Medicare supplement plan with equal or lesser benefits. Enrollees are only permitted to enroll in a plan offered by either their current carrier or an affiliate of their current insurer.

Maryland 

As of July 1. 2023, beneficiaries have 30 days from their birthday to change Medicare supplement plans with either equal or less benefits than their current plan.

Nevada

In the sate of NV, the birthday rule allows beneficiaries 60 days form the first day of their birthday month to change supplement plans to one with the same or less benefits. It is also permitted to switch insurance carriers.

Oregon

Beneficiaries have 30 days from the first day of their birth month to switch Medicare supplement plans to another with the same or fewer benefits. They can also change insurance carriers.

Please note; beneficiaries and their agents must verify the state specific rules and timelines.

Watch a quick YouTube video on Medicare enrollment periods

How the Birthday Rule works

Each year plan enrollees should evaluate their current supplement coverage and decide if it still meets their needs. A licensed Medicare agent can help compare available plan options to find one that best suits the needs of the enrollee. They will also be able to advise of the applicable enrollment window using the appropriate birthday rule for each eligible state.

Beneficiaries must submit all applications before the enrollment period ends. Insurers cannot deny applications submitted during the birthday rule period. They are also prohibited from increasing premiums based on health conditions.

Benefits of the Birthday Rule

The birthday rule provides several advantages for beneficiaries. This includes the ability to adjust their coverage to better align with their healthcare needs and budget. It also allows enrollees an opportunity to change plans without fear of rejection.

Considerations for Beneficiaries

Although the birthday rule provides some significant benefits, there are a few important considerations:

State-Specific Rules: The availability and details of the birthday rule depend on where each beneficiary resides. It is not available in every state.

Plan Restrictions: In general, the rule applies only to plans that offer equal or lesser benefits, so beneficiaries cannot use it to upgrade coverage.

Timing: Those who miss the enrollment window must wait until next year’s birthday period to change plans.

Learn about Medigap guarantee issue rules; click here

The Medicare Supplement birthday rule is valuable for eligible beneficiaries. It provides an annual opportunity to change coverage without medical underwriting.