Why Non-Commissionable Medicare Plans Hurt Clients (And What You Need to Know)

A troubling trend is emerging in the Medicare landscape that directly threatens your access to unbiased guidance during one of your most critical healthcare decisions. Major insurance carriers are quietly eliminating agent commissions on select Medicare plans, creating what industry experts warn could be a significant disservice to beneficiaries seeking optimal coverage.

This shift toward non-commissionable Medicare plans represents more than just a business decision: it fundamentally alters the relationship between you and the professional guidance you rely on during Medicare enrollment periods. Understanding this trend and its implications is essential for making informed decisions about your healthcare coverage.

What Are Non-Commissionable Medicare Plans?

Non-commissionable Medicare Advantage plans are policies where insurance carriers have eliminated commission payments to agents and brokers who sell these plans. Despite this change, Medicare continues to pay the insurance companies their regular fees, creating what some industry professionals describe as a problematic compensation gap.

The scope of this trend is substantial. UnitedHealthcare made 15% of its PPO portfolio non-commissionable, impacting over 100 plans nationwide. Similarly, Aetna and Cigna Healthcare have designated select plans as non-commissionable across multiple states including California, Connecticut, Florida, Maryland, New York, Texas, Utah, Virginia, and Washington.

This means that when you enroll in these specific plans, your agent receives no compensation for their time, expertise, or ongoing service: despite the insurance company still receiving full payment from Medicare for providing your coverage.

The Financial Pressures Driving This Change

Insurance companies cite several factors driving their decision to eliminate agent commissions:

• The Inflation Reduction Act (IRA) has created significant financial strain through provisions like the $2,000 out-of-pocket cap for Part D prescriptions and expanded low-income subsidies

• Post-COVID utilization trends as beneficiaries resumed delayed routine care and treatments, increasing claims costs

• The V28 risk adjustment model and other regulatory changes affecting profitability

• Plan redundancy and rising operational costs requiring carriers to streamline their offerings

• Low profitability margins on certain Medicare Advantage products

These financial pressures have prompted carriers to seek cost reductions wherever possible, and agent commissions represent a significant expense that directly impacts their bottom line.

How Non-Commissionable Plans Hurt You as a Medicare Beneficiary

The elimination of commissions creates several serious problems that directly affect your access to quality Medicare coverage:

Reduced Access to Professional Guidance

When agents aren't compensated for selling certain plans, they may be less inclined to thoroughly research, present, or recommend these options: even when they might offer the best coverage for your specific needs. This limitation reduces your access to comprehensive professional guidance during critical enrollment decisions.

Biased Plan Recommendations

Because agents aren't getting paid to sell certain Medicare Advantage or Part D policies, they may not recommend those plans even when they would be the most suitable option for you. This creates a fundamental conflict where the agent's financial incentives may override what's genuinely best for your healthcare needs and budget.

Timing During Critical Enrollment Periods

Many carriers implemented these changes during the Annual Enrollment Period (AEP), when you're actively reviewing and updating your coverage. This timing creates additional confusion and disruption during an already complex decision-making process when you need clear, unbiased guidance most.

Loss of Ongoing Support

While existing clients retain their Agent of Record status for renewal compensation, new enrollments in non-commissionable plans may receive less ongoing support and service from agents who have no financial incentive to maintain those client relationships throughout the year.

The Broader Impact on Medicare Decision-Making

This trend extends beyond individual agent relationships to affect the entire Medicare advisory ecosystem. When professional advisors are discouraged from presenting certain options, the competitive marketplace that typically drives better coverage options and pricing becomes distorted.

Independent brokers, who traditionally provide objective comparisons across multiple carriers, face particular challenges when some of their best plan recommendations become financially unsustainable to support with proper service levels.

As discussed in our analysis of independent brokers versus captive agents, the value of unbiased guidance becomes even more critical when financial incentives are removed from certain coverage options.

What You Need to Know to Protect Yourself

Questions to Ask Your Agent

When working with agents during enrollment periods, take these proactive steps:

• Ask directly whether they receive commissions on the plans they're recommending
• Request to see all available options, including non-commissionable plans
• Demand objective comparisons based on your specific healthcare needs rather than compensation structures
• Inquire about ongoing support for non-commissionable plans you're considering

Conducting Independent Research

Don't rely solely on agent recommendations. Use Medicare.gov's Plan Finder tool to compare all available options in your area. Pay particular attention to:

• Total estimated annual costs based on your current medications and providers
• Network coverage for your preferred doctors and hospitals
• Prescription drug formularies to ensure your medications are covered
• Star ratings and quality metrics for plan performance

Seeking Multiple Opinions

Consider consulting with multiple agents or brokers to get different perspectives on your coverage options. Independent brokers who work with multiple carriers may provide more comprehensive comparisons than captive agents representing single companies.

Staying Informed About Changes

Medicare plans change annually, and commission structures continue to evolve. Stay informed about:

• Annual plan updates and benefit changes
• New non-commissionable designations that may affect your current coverage
• Alternative coverage options that may better serve your needs

Strategies for Agents Adapting to This Trend

For insurance professionals reading this, industry experts recommend several approaches:

• Leverage technology to improve efficiency and reduce service costs
• Focus on client retention to build long-term value from existing relationships
• Consider cross-selling opportunities with ancillary products to offset lost commissions
• Emphasize value-added services that justify fee-for-service arrangements
• Maintain transparency with clients about compensation structures

The Future of Medicare Distribution

This trend toward non-commissionable plans represents a broader transformation in Medicare distribution that prioritizes carrier profitability over traditional agent-client relationships. While carriers frame these changes as necessary for financial stability, the practical effect reduces the professional guidance available during one of your most important healthcare decisions.

The situation parallels challenges we've discussed regarding Medicare cost increases in 2025, where beneficiaries must navigate increasingly complex financial considerations with potentially reduced professional support.

Taking Action to Protect Your Interests

The emergence of non-commissionable Medicare plans doesn't mean you're without options. By understanding this trend and taking proactive steps, you can still secure appropriate coverage:

• Schedule consultations early in enrollment periods to allow time for thorough research
• Document your specific healthcare needs before meeting with agents
• Use multiple information sources beyond single agent recommendations
• Review your coverage annually regardless of agent recommendations
• Consider working with fee-based advisors who provide unbiased guidance regardless of commission structures

The key is recognizing that the traditional agent-client relationship may be compromised by these new compensation structures and adjusting your approach accordingly. Your healthcare coverage is too important to be influenced by factors other than your specific medical needs and financial situation.

By staying informed and taking an active role in your Medicare decisions, you can navigate this changing landscape while still securing the coverage that best serves your health and financial well-being.