In short
- Insurance companies pay Medicare agents. Agents can't charge you a fee to process your enrollment in a Medicare plan.
- Medicare Advantage and Part D premiums can't vary among people in the same plan, so using an agent doesn't change your price.
- CMS sets a yearly cap on first-year pay for Medicare Advantage and Part D enrollments, and renewal years pay no more than half of it.
- Switching to a similar plan pays the agent the lower renewal rate, and leaving a plan in the first 3 months usually means the agent pays the commission back.
- Medicare Supplement commissions are set by each insurance company under state rules, not by CMS.
It's a fair question, and you should ask it of anyone who helps you with Medicare: how do you get paid? For a licensed Medicare agent, the answer is the insurance companies. You don't write the agent a check, and the price of your plan doesn't go up because an agent helped.
Here is how the money actually moves, and the federal rules that limit it.
Who pays a Medicare agent?
The insurance company does. When you enroll in a Medicare Advantage plan, a Part D drug plan or a Medicare Supplement through a licensed agent, the company pays the agent a commission. For Medicare Advantage and Part D, the company may keep paying a smaller amount each year you stay enrolled.
You never pay the agent directly. Medicare.gov lists charging you "a fee to process your enrollment into a plan" among the things plans and agents can't do. Federal rules also require Medicare Advantage companies to make sure beneficiaries "are not charged marketing consulting fees when considering enrollment."
Will your premium be the same with or without an agent?
Yes. Your plan costs the same however you enroll.
- Medicare Advantage: Federal rules (42 CFR 422.262) require a plan's premiums and cost sharing to be uniform for everyone enrolled in that plan. The plan can't charge you more because an agent enrolled you, or less because you enrolled on Medicare.gov.
- Part D: Each drug plan has one published premium in your region. The same plan costs the same whether you join through an agent, Medicare.gov or the company.
- Medicare Supplement: Each company sets its own rates by plan letter, age, sex, tobacco use and area, according to the Nebraska Department of Insurance. You can apply directly or through a local agent, and you pay the company's rate either way.
The commission is part of the insurance company's cost of doing business, the same way an auto or home insurer pays its agents. It isn't added to your bill as a separate charge.
How are Medicare Advantage and Part D commissions set?
CMS sets the limits. The rules live in 42 CFR 422.2274 for Medicare Advantage and a matching rule for Part D. They work like this:
| Rule | What it means |
|---|---|
| Yearly cap | CMS sets a maximum ("fair market value") for each enrollment, updated every year |
| Initial year | A company can pay up to that cap in your first year in a plan |
| Renewal years | Each later year you stay, the payment is no more than half of the cap |
| Like-plan switch | Moving from one Medicare Advantage plan to another, or one drug plan to another, pays the renewal rate, not a new first-year payment |
| Only months enrolled | Companies may pay only for months you're actually in the plan |
| Rapid disenrollment | If you change plans within your first 3 months, the company generally takes the commission back |
| Medicare Advantage with drugs | Only the Medicare Advantage payment is made, not a separate Part D payment |
The chargeback has exceptions. It doesn't apply, for example, if you enrolled with an October, November or December start date and then used open enrollment to change for January 1, or if you changed because you moved into a nursing home or started getting Extra Help.
CMS publishes the dollar limits in annual guidance. This page doesn't list them, because they change every year and should come straight from CMS.
Why do these rules matter to you?
They take a lot of the money incentive out of moving you around. Because a switch to a similar plan pays only the renewal rate, an agent doesn't earn a fresh first-year commission by moving you from one Medicare Advantage plan to another every fall. Because early changes trigger a chargeback, there's no reward for signing you up and then switching you in February.
That doesn't mean every product pays the same. A Medicare Advantage plan, a Part D plan and a Medicare Supplement are paid differently. A good agent can tell you plainly how they're paid and why a recommendation fits you.
How are Medicare Supplement commissions different?
Medicare Supplement (Medigap) policies are regulated by the states, so the CMS compensation caps for Medicare Advantage and Part D don't apply to them. Each insurance company sets its own commission schedule. The Nebraska Department of Insurance oversees the companies and licenses the agents.
What stays the same: the company pays the agent, and you pay the company's rate for your policy. Life insurance and final expense policies work the same way.
What rules do Medicare agents have to follow?
Plenty. Federal rules for Medicare Advantage and Part D require that agents:
- Be licensed by the state and appointed by every company whose plans they sell
- Be trained and tested every year on Medicare rules, scoring 85% or higher
- Record a Scope of Appointment before a sales appointment, listing the products you agreed to discuss. For 2027 marketing, which began October 1, 2026, the old 48-hour wait between the form and the meeting is gone.
- Record sales calls and keep the recordings at least 6 years
- Disclose that they don't offer every plan in your area, if they don't, and how many organizations and products they represent
Medicare.gov adds what agents can't do: call you unless you're a member or gave permission, come to your home uninvited, offer cash or gifts worth more than $15 to join, or ask for payment over the phone or online.
What does "independent" mean, and why ask how many companies?
An independent agent is appointed with several insurance companies instead of just one. That gives you more to compare, but no agent sells every plan. CMS requires agents who don't sell every Medicare Advantage plan in your area to tell you, and to tell you how many organizations and products they represent. You'll see that disclaimer on this site.
Bill is an independent agent who works with multiple carriers. A couple of times, the plan that fit a client best was with a company he wasn't appointed with. He either got appointed or found someone who was. The client's plan comes first.
How can you check an agent, and where else can you get help?
You can confirm any agent's Nebraska license through the Department of Insurance's agent and company search, which runs on the NAIC's State Based Systems lookup, or through the National Insurance Producer Registry. The department posts disciplinary actions against agents, and takes complaints at 877-564-7323.
You don't have to use an agent at all. Medicare.gov and 1-800-MEDICARE (1-800-633-4227, available 24 hours a day, 7 days a week; TTY 1-877-486-2048) show every plan. Nebraska SHIP (1-800-234-7119) offers unbiased counseling and doesn't sell insurance. Our guide to Nebraska SHIP and who helps with what and our comparison of a local agent vs Medicare.gov vs a call center lay out the options.
If anyone asks you to pay them to enroll in a Medicare plan, treat it as a red flag. Our Medicare scams guide covers who to call. For more on working with Bill, see the Working with Bill FAQ and the Medicare disclaimer. When you're ready, talk to me.
Frequently asked questions
No. Federal rules require Medicare Advantage premiums to be uniform for everyone enrolled in the same plan, so your premium is the same whether you join through an agent, Medicare.gov or the company. The same is true in practice for Part D. Medicare Supplement companies set their rates by plan letter, age, sex, tobacco use and area, and you pay that rate whether you apply directly or through an agent.
Not for enrolling you in a Medicare plan. Medicare.gov lists charging a fee to process your enrollment among the things plans and agents can't do, and CMS requires plans to make sure beneficiaries aren't charged marketing consulting fees. Agents also can't ask you for premium payment over the phone or online, because the plan sends you a bill. If someone asks you to pay them, call 1-800-MEDICARE.
CMS sets the maximum each year for Medicare Advantage and Part D, with a larger payment in your first year in a plan and a smaller renewal payment each year after. Renewal pay is capped at half of the first-year amount. CMS publishes the dollar limits in annual guidance, and they change every year. Medicare Supplement commissions vary by company and are not set by CMS.
CMS rules are designed to limit that. Payments are capped, a switch to a similar plan type pays only the lower renewal rate, and a change in the first three months usually triggers a chargeback. Rates can still differ between Medicare Advantage, Part D and Medicare Supplement products. Ask your agent how many companies they represent and why they're recommending a particular option.
Independent agents are appointed with specific insurance companies and can only enroll you in those companies' plans. CMS requires agents who don't sell every plan in your area to say so and tell you how many organizations and products they represent. You can always see every plan on Medicare.gov or by calling 1-800-MEDICARE, available 24 hours a day, 7 days a week.
Use the Nebraska Department of Insurance's agent and company search, which runs through the NAIC's State Based Systems lookup, or the National Insurance Producer Registry. The department also posts disciplinary actions against agents. To file a complaint, contact the Nebraska Department of Insurance at 877-564-7323. Every Medicare agent must be licensed by the state and appointed by each plan they sell.
Sources
- eCFR: 42 CFR 422.2274, agent and broker compensation and oversight (opens in a new tab)
- eCFR: 42 CFR 422.262, uniformity of premiums (opens in a new tab)
- Medicare.gov: Marketing rules for health and drug plans (opens in a new tab)
- Nebraska Department of Insurance: Medicare Supplement Fact Sheet 2026 (opens in a new tab)
- Nebraska Department of Insurance: Company and producer search (opens in a new tab)
- CMS: Contract Year 2027 Medicare Advantage and Part D final rule fact sheet (opens in a new tab)
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. 1-800-MEDICARE (1-800-633-4227) is available 24 hours a day, 7 days a week. TTY users can call 1-877-486-2048.
