A. This is a very good question. Since I work with retirees a great deal it makes sense that I know how I get paid.
When I am hired by an individual as an Insurance Counselor, I charge the client a fee. I cannot legally receive any remuneration from the insurance company. When I work as an insurance agent, things are a little different.
Medicare Part D and Medicare Advantage plans are not the same thing as Medigap. The Department of Health and Human Services regulates how insurance agents are compensated through the Centers for Medicaid and Medicare Services. When I help people with Medicare Part D or Medicare Advantage, the insurance company pays me a fixed sum of money. Regardless of which plan the applicant elects or how much premium they spend,
the payment is the same.
Medigap, also known as Medicare Supplement, is different. In most cases, insurance companies pay insurance agents a percentage of the premium that they receive each time an insured pays premium. That percentage varies from state-to-state and with the age of the applicant.
Most insurance agent’s commissions are between 18% and 22% of the premium that is paid. I have seen them as low as 10% for people under the age of 65 or older than 80. Only one insurance company with whom I am contracted will pay a fixed sum for Medigap.
Recently I have written a book to help people who are not entirely certain whether or not they need Medigap. If you want to learn more about Medicare Supplement insurance, click UNDERSTANDING MEDIGAP INSURANCE.