Do I Need A Medicare Insurance Agent? With over 10,000 people turning 65 every day in the United States, there is a lot of interest in Medicare. Every day people are searching the internet and YouTube for articles and videos that help them learn about Medicare and the choices they must make for healthcare insurance in retirement. A question they often ask is, Do I need a Medicare Insurance Agent? What is an independent Medicare insurance broker and how can they help me?
Unfortunately, the governments Medicare & You Guidebook is more of a reference manual than the How-To Guide most of us need. It simply doesn’t provide an objective discussion of the pros and cons of the choices consumers must make when starting Medicare. This can be frightening considering that it is possible to make a serious mistake with lifelong negative consequences that cannot be undone.
So, to answer the question posed in the title of this video; Do I need an insurance agent or broker for Medicare? The simple answer is no. You can do this all on your own, if you wish. But the advice you receive from a good, experienced agent can be invaluable and it will cost you nothing. You don’t pay an insurance agent or broker. They are paid by the insurance company for referring your business.
A knowledgeable, independent agent or broker can help you make an informed decision. They can help you to understand the pros and cons of each of your choices so you can find the right plan for your needs and your budget.
Independent Medicare Insurance Agents or Brokers
In this article we are going reveal insights into why you should consider finding an independent insurance agent or broker to help you with your Medicare decisions. We will show the advantages an independent insurance agent can offer. Equally important, we will review what you should look for in an independent insurance agent or broker.
We will review How to determine if that agent or broker is qualified and experienced enough to provide the advice you are looking for. How to determine if the agent has your best interest in mind or may be more concerned with their commissions than your healthcare.
Medicare can be the best healthcare you have ever had. Bar none. It can also be a nightmare to learn. Learning Medicare is no simple task.
- You have to learn unfamiliar insurance terminology.
- All the different parts of Medicare “descriptively” labeled as A, B, C & D
- Medicare offers a decent reference guide, but no “How-To-Do-Medicare” that isn’t biased toward plans that may not be in your best interest.
- You can top all of this off with the nagging realization that you can make a mistake. If you do, you won’t know until it’s too late. It’s very likely you will not know the mistake you made until it’s too late to fix.
Here is the catch. When it comes to issues as complex as healthcare we all would like some help. Heck, I find myself wanting “help” or advice on much simpler decisions like choosing a place to eat or clothes to wear.
But none of us want to be sold something.
There is a huge difference between working with someone that is offering advice based on their knowledge and experience, versus being sold something. None of us want to walk away from a transaction wondering if what we just purchased was in our best interest or the salespersons.
So, with that in mind, here is what you need to know, the knowledge you need to arm yourself and help give you confidence that you’re getting the right advice. And choosing the right advisor.
Who Does My Agent Work for?
This article will be much more helpful if we tackle some of the insurance terminology first.
The first concept you should grasp is the difference between an Independent Insurance Agent and a Captured Insurance Agent. This is critical if you are seeking unbiased advice.
The Captured Agent
A Captured Agent is an agent who is an employee of an insurance company. That agent works for the insurance company and is restricted to offering those products that are in that company’s best interest. They do not represent you.
For example, if you were to walk into a Ford new care dealership and tell them you are looking for a new truck, that captured salesperson will show you their inventory of Ford trucks. They won’t consider if the better buy might be a Chevrolet or Toyota or Nissan. They are there to convince you that the best thing you can do is buy a Ford. It may be that the Ford is the best truck you can buy for your budget. But you won’t really know without also talking to the other dealerships.
If you are dealing with Captured Agents, you will need to speak independently to all the insurance companies to get a full view of your Medicare choices.
What is An Independent Medicare Insurance Broker?
An Independent Agent is not employed by an insurance company. The true independent agent has access to all or virtually all the insurance companies offering products in your area. That way, they can and will represent your best interest in helping you find the right Medicare plan for your needs and budget.
In Medicare, the true independent insurance agent’s mission is to represent the best interest of the client, not of any insurance company. That agent should have access and expertise in all Medicare supplement plans and Medicare Advantage Plans available to you, and help you find the one that is best for your needs. When that agent specializes in Medicare, they are referred to as an Independent Medicare insurance Broker.
To continue the automobile sales analogy, it would be like going to one person who can show you all the trucks available from all the different manufacturers. Then review with you the features, warranties, engines and options to help you find the exact truck you are looking for. It would make car buying a different experience, wouldn’t it?
Medigap Seminars; Independent Medicare Insurance Broker
As an aside, I have a lot of pride in Medigap Seminars as one of only a handful of truly independent Medicare insurance brokers. As one of the country’s premier Medicare specialists, we can work with any insurance company. In fact, we regularly get solicitations from insurance companies hoping we will offer their products. However, one of my responsibilities in representing my clients’ bests interest is applying my knowledge and experience to perform the due diligence need to keep my clients safe from choosing a company that can become a bad decision.
Caution: With Medicare products, many insurance companies have both captured agents and independent agents offering their products. One way to tell is by their email address. Most Captured Agents have their insurance company employer name in their email address and/ or on their business card.
Beware of Insurance Company Branding
Also, a truly independent insurance agent does not advertise any specific insurance company. Some agents claim to be independent, but then only promote one or two insurance companies. If an agent has office signage or marketing material that promotes one insurance company over all others, they may have the ability to be independent, but not work that way. I know of many agents that are independent by contract, but 90% or more of their business is with one insurance company. They do this to qualify for trips and other bonuses.
Agent or Broker?
In most states, the term agent or broker is interchangeable when referencing an Independent Agent. In some states, an insurance broker is a separate license and refers to an independent salesperson contracted differently with the insurance companies. Consumers in those states may be required to pay the broker directly via a separate fee that is in addition to what they pay for their insurance. In reality, an independent Medicare insurance broker and an independent Medicare insurance agent are the same thing.
Independent Insurance Agents Near Me
It seems at least a couple times per month we field a telephone call asking us if we can help a person find an “Independent Medicare Insurance Agents Near Me”. Never mind the fact that we are Medicare specialists and help people with their Medicare in 49-states.
The simple truth is that there are not a lot of organizations like us. The probability of finding a true independent Medicare specialist with the experience and knowledge you need who happens to live within driving distance of your home is minimal at best.
The Best Advisors are Seldom Local
Why? Specializing in Medicare insurance and making a living at it is tough. Unlike other insurance products such as life insurance or annuities that have high up-front commission payouts, most Medicare plans spread out the commissions paid to the agent over six to ten years. For example, instead of being paid $1,500 for a life insurance policy, a Medicare policy might pay the agent $189 up front, then $20 per month for the next five to six years. Because of this, most people that try to specialize in Medicare can’t make a living focusing on Medicare. It takes too long to develop a cash flow that is greater than your bills. Think about that for a moment. At $20 a month, how many policies must you sell just to pay your bills? The average agent trying to specialize in Medicare may only sell two to four policies per month.
Because generating a positive cash flow is so difficult with Medicare, the agent might only sell insurance part time. Yes, there is a large percentage of agents in this industry who tell you they are career agents but in reality, only work insurance part time, out of necessity. I will show you how to tell if that’s the case in a moment.
Also, some may be full time in insurance, but their focus is on other insurance products. They focus on products with higher upfront payouts. Medicare is just a small part of their business. These are not specialists; they are Jack-of-All-Trades.
Either scenario can be an issue with you, the consumer, because you will need a person who understands Medicare in depth and has enough experience to offer good, useful advice. You will want a person that specializes in Medicare, not a jack-of-all-trades, expert in none.
How to Find an Independent Insurance Agent for Medicare
First step in finding the right agent or broker to help advise you on Medicare (or any other insurance product) is to rule out those agents who may not have the knowledge and experience you should demand of an advisor.
Check Out Their Website
The first thing I suggest is to take a good look at the agents’ website. You can learn a lot about both the individual and their business focus.
An experienced agent who is a Medicare specialist will have a site designed specifically for people researching Medicare. They may include dental, life or other ancillary products, but the focus will be on Medicare
Scroll down to the footer of the site. An experienced agent will include affiliations with healthcare insurance groups, The Better Business Bureau and possibly other insurance associations.
Avoid The Jack-of-All-Trades
The jack-of-all-trades agent may have a mix of Life & Health insurance plus what is referred to as Property Casualty Insurance (Cars, Houses, Renters etc.) These are two separate fields of specialty. They require sperate licenses. They are so different that I would argue no one person can be an expert in both.
Like you, I too am a consumer. Of course, I don’t need a Life & Health insurance advisor. That’s me. But I do need an advisor for my home, auto and business insurance. I use a person / agency who is a specialist in Property & Casualty. Not someone who dabbles in both. The person I choose to work with has decades of experience with that one insurance specialty.
Do They Have a Brick & Mortar Office?
Lastly, check for their business address on the web site. Google maps is a powerful tool to find where they are located. Is it a business or residential address? If it’s a PO Box or if there is no address, then it is likely this person is a one-person shop working from home.
I have nothing against people starting a business from their home. Many of us have worked from home at some time or another. However, the agent that does not have a team behind them will not have the robust customer service you may need in your future.
How to Tell If They Are Full-time in Insurance
The risk to you is that not only might this person not have the experience in the business to offer solid advice, but they may not remain in the industry. This leaves you with no one to reach out to when you need them in the years ahead. Having a dedicated Medicare Advocate for ongoing customer services is a unique benefit only provided by Medigap Seminars insurance Agency.
People who are new or not established in the business often do not have a business email address associated with their domain (website). It might by Johns-Insurance @gmail.com and so on. This is a dead giveaway they are not established.
Of course, a person who does insurance part-time has other responsibilities during most working hours. Is your prospective agent available during regular office hours? Do they return your call in the evening or weekends rather than during the day? That’s a part-time agent. Yes, this is much more common than most realize. Sometimes you should go with your gut feeling. If something seems off, don’t ignore your gut feelings.
Lastly, an agent that has a team to help him or her servicing clients seldom answers the telephone. One of the first step to growing a team and building a business is to hire a person to answer the telephones and schedule meetings. The person who is always answering their incoming calls is very likely working alone.
Of course, you should also be checking for Social Proof. Does your agent have many 5-Star ratings from Google or from the Better Business Bureau? Keep in mind, anyone can write a Google Review, but they must have a separate Google for a review.
I also like Better Business Bureau reviews because the BBB confirms that the person was really a customer.
Our Better Business Bureau reviews here: https://www.bbb.org/us/fl/palm-city/profile/medicare/medigap-seminars-llc-0633-90602167
Now you have a good idea how to tell if they are full or part time. But how can you tell if they have your best interest in mind?
How To Shop for Medicare Plans
So far in this article we have covered some important things you will want to know about your Medicare insurance agent prior to working with them.
- Are they a captured agent or independent?
- Do they specialize in Medicare or are they a jack-of-all-trades?
- Do they work alone, part-time, or have a team for your support?
After you have the answer to these questions, the next big question is simply this; is the agent working with your best interest in mind, or are their commissions more important to them than your healthcare?
This is big and, obviously, important. Through sites like Facebook and other insurance message boards I am regularly fielding agent questions about Medicare as well as seeing how these agents approach their business. It is always disappointing to see that so many people in this industry put very little time into their own education. Even more disappointing to see how many allow their commissions to dictate the products they recommend.
You can tell if the agent is representing your best interests in two ways. The first is transparency regarding product commissions. The second is how they go about reviewing your options.
How Are Insurance Agents Paid
We make our living being paid a commission by the insurance company that you choose to work with. You pay nothing. My philosophy is that whenever I deal or consult with a person that makes their living off of commissions, I want to know what they are paid. How much commission is in each different product or service they offer? I want to know when a salespersons advice could be tainted by the commissions they might earn.
When you choose a policy based on the advice of an agent, don’t you want to have full confidence that you have made a fully informed decision and the advice you received was in your best interest and not the agents?
Here is what you should know
In general a Medicare supplement policy will pay the agent or broker a commission of 25% to 28% of your premium for about 6-years. A commission is built into your premium. Medicare supplement commissions are always based the first year’s premium, not price increases that may occur later. Some states have rules that can impact that structure, but an equal payout over six-years is a good rule of thumb.
High Premium states like Florida, Washington State, Connecticut and New York, will lower the payout on a percentage basis. This keep the amount of commissions per policy nearly the same as other states. I believe the average payout across the country for a Medicare supplement is about $240 per year for six years. If you pay your premium monthly, that commission is paid to the agent in monthly installments. $240 per year is equal to $20 per month.
At $20 / month, an agent has to sell a lot of Medicare supplements to make a living.
Commissions – Medicare Supplement vs. Advantage Plans
This is important: The highest commission product in Medicare, by far, is the Medicare Advantage plan. These are the HMOs or PPOs that may have low or no monthly premium. The commission rate is set annually by CMS (Center for Medicare and Medicaid Services). But Medicare Advantage Plans have lower benefits and are much more restrictive than Medicare supplement plans.
This brings us to the most obvious “Tell” that can help you determine if an agent is more commission biased that concerned about your healthcare.
Look for the Tell
What is it? It is when the first plan an insurance agent shows you is a Medicare Advantage plan. If an agent or broker first presents to you a Medicare Advantage plan, they may be more interested in their commissions than your healthcare. Why else would anyone try to sell you a type of plan with lower benefits and more restrictions first?
Here is why:
- MAPD is the Highest commission product in Medicare. It pays two to five times a Medicare supplement over your lifetime.
- MAPD is only right for about 10% to 30% of Medicare consumers. It has lower insurance coverage, more limitations in both doctors and service area and requires annual maintenance because the plans and doctors change every year! You are actually giving up your Medicare and giving it to a private, for-profit insurance company. Yes, a Medicare Advantage Plan is also called a Medicare Replacement policy. It replaces your Medicare.
- MAPD are typically the Medicare of choice for those on a very limited budget. It’s seldom the right plan for those that can afford even the lowest cost supplement.
- Lastly, and this is where you can make a permanent mistake. You can always move from a Medicare supplement to a MAPD. MAPD will accept you regardless of your health or health history. But in almost every state in the country you only have a limited window during your initial enrollment period to get a Medicare supplement plan without being judged by your health. If you miss that window and something happens to your health, you may never qualify for a Medicare supplement again and miss out on the benefits completely.
How To Find The Best Medicare Plans
The best way to approach Medicare is to first see if any of the Medicare supplement plans fit both your needs and your budget. These are lower commission products, but offer you, the consumer, more benefit and complete freedom of choice. Only if a Medicare Supplement does not fit your budget and needs should you then consider a MAPD plan.
Sure, the agent doesn’t get paid as much, but it makes for much happier clients.
The agent that has your best interest in mind will first help you evaluate the cost and benefits of a Medicare supplement. Only if Medicare supplement plans do not fit into your budget should you start to look at your choices of Medicare Advantage plans.
Forewarned and Forearmed
A good independent agent that specializes in Medicare and has your best interest in mind can be an invaluable asset. But not all agents in this business are the same. Hopefully, you are now armed with enough knowledge to be confident in your decision on who to work with.
If you would like our help with your Medicare, please call us at 800-847-9680