The Centers for Medicare & Medicaid Services (CMS) administers the Medicare program and has strict guidelines governing Medicare agents selling Medicare plans at private insurance companies. While it isn't required that consumers work with a Medicare insurance agent, it can be extremely beneficial. Navigating all the Medicare rules gets complicated and having an expert to guide you through the process is often invaluable.
What Is a Medicare Agent?
A Medicare insurance agent is a Medicare expert who helps you review and evaluate your Medicare plan options. They help you compare the benefits and coverage you're eligible to receive and guide you to a suitable option. They also make recommendations on whether you need supplemental insurance and help with prescription drug, dental and vision policies.
Every state requires Medicare agents to obtain a license before selling insurance to the public. They must complete training and pass a test every year to ensure they have a solid understanding of the different types of Medicare health and prescription plans and related services. A good Medicare insurance agent will be thoroughly knowledgeable on available coverage, patient eligibility, election periods, provider networks, etc.
Different Types of Medicare Agents
There are two distinct types of Medicare insurance agents: captive and independent. Both have pros and cons you should consider before choosing one.
Captive Medicare agents partner with a single insurance company, so they're limited to the plans offered by this insurer. They can't enroll Medicare beneficiaries in health plans not offered by the insurance company they work with. While this could significantly limit your plan options, captive agents tend to have extensive knowledge of the health plans they sell since there are fewer of them.
Independent Medicare agents aren't bound to a single insurer. They work with numerous insurance companies and can enroll Medicare beneficiaries in health plans from any of them. Therefore, you should have a wider variety of health plan options compared to working with a captive agent. They also may be more objective since they're not employed by just one insurance carrier. On the downside, it's possible an independent agent won't be as knowledgeable on all the plans they sell simply because there are so many of them.
Medicare Agent Versus a Broker
A Medicare insurance broker is essentially an independent Medicare agent, so you'll likely hear these two terms used interchangeably. You may even hear brokers referred to as an independent broker agent. Like independent Medicare insurance agents, brokers can sell Medicare plans for multiple insurance companies and help beneficiaries enroll in the optimal plan for their needs. No matter what they call themselves, all agents and brokers must follow specific marketing and selling rules set forth by CMS to prevent Medicare fraud and pushy sales tactics. They're under strict oversight and risk losing their license if they don't follow these rules completely.
What Does a Medicare Insurance Agent/Broker Do?
About three months before you turn 65, you'll enroll in Original Medicare Part A and Part B through the Social Security Administration, if you weren't automatically enrolled. Private insurance companies assist you with other parts of Medicare. Additional options they can help you with may include:
Medicare Advantage, also called Medicare Part C, takes the place of Original Medicare, and often covers things it doesn't.
Medigap, also called Medicare Supplemental Insurance, helps cover costs that Original Medicare doesn't like deductibles, copayments, coinsurance and emergency medical care outside the U.S.
Prescription drug coverage, also called Medicare Part D, helps pay for prescription medications.
Medicare insurance agents talk with you about your budget and health goals, then help you choose and sign up for the option(s) that fit these parameters. You can work with an agent when you first sign up for Medicare or later if you decide you need to change plans because the one you have isn't meeting your needs.
Agents receive a commission from the insurance company providing the plan to the Medicare beneficiary. CMS caps the commission amounts agents may receive, which it sets annually based on fair market value. They can't directly charge you a fee to process your plan.
Benefits of Working with a Medicare Agent
Navigating all the plans, benefits, premiums, copays, exceptions, and complex rules of Medicare can quickly become overwhelming for someone unfamiliar with the process. It gets even more complicated when you're combining plans, such as combining Medigap and prescription drug coverage with your Original Medicare Parts A and B. Obvious benefits of working with a Medicare agent include making it easier to understand your options and helping ensure you sign up for the right products. Independent Medicare insurance agents also:
Answer all your Medicare questions in detail but ensure you understand how it works
Explain the various types of Medicare coverage and detail the pros and cons of each
Save you time by showing you options from multiple companies
Walk you through the plans specifically available in your area
Help you compare all your options based on your budget and medical needs
Ensure you find the most cost-effective plan
Calculate whether you'll meet the underwriting requirements, if applicable
Assist you with the enrollment application, ensuring it's accurate and complete
Make sure your application gets sent to the health insurance company for review
How to Find a Medicare Agent
You can find a Medicare agent near you using the Find Local Help search tool on HeathCare.gov. Each state also has a state insurance department with the primary function of protecting consumers. These departments license insurance agents and brokers and often allow you to check the license status of someone claiming to be a licensed agent/broker on their websites. You can also lookup licensure on the National Association of Insurance Commissioners (NAIC) website if it's not an option on your state insurance department's website. Finding a licensed Medicare insurance agent trained to help Medicare beneficiaries choose the right plan for their needs and budget can make a huge difference in the quality of your healthcare coverage.