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.
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