The Medicare landscape is undergoing yet another significant change for 2025: some carriers are making specific Medicare Advantage (MA) plans non-commissionable. This can feel like a daunting shift, but remember—change often brings new opportunities for growth and innovation. Here's a rundown of what's happening, why it's happening, and how you can adapt without missing a beat during the Annual Enrollment Period (AEP).
Why Are Certain Medicare Advantage Plans Going Non-Commissionable?
Four carriers—Aetna, Cigna Healthcare, Elevance Health (formerly known as Anthem Blue Cross Blue Shield) and Medical Mutual—announced in November 2024 that they will no longer pay commissions on certain MA plans in specific markets for policies effective January 1, 2025. While renewals for existing members remain unaffected, this adjustment applies to new enrollments during AEP.
So, why this change? The main reason appears to be financial stability amid the effects of the Inflation Reduction Act (IRA). New IRA-driven adjustments, such as capping Part D out-of-pocket costs at $2,000 and eliminating cost-sharing for certain vaccines, require Medicare Advantage plans to adapt their spending models. This move to make certain plans non-commissionable may help carriers manage these increased expenditures.
Time During AEP—A Challenge or an Opportunity?
AEP is traditionally the busiest time for Medicare sales, as it's the window when beneficiaries can change or update their coverage. By introducing non-commissionable plans now, carriers are likely aiming to mitigate rising costs associated with increased utilization rates post-COVID.
For agents, this change could initially seem frustrating. But remember, the flexibility you've built over time in this field is an asset, allowing you to adapt and refocus on the needs of clients without losing momentum.
How to Maintain Success with Non-Commissionable Medicare Advantage Plans
The primary takeaway? Continue to offer these non-commissionable plans if they genuinely meet your clients' needs. Yes, they won't bring in direct commission income, but consider the bigger picture. Each satisfied client represent potential referrals, cross-selling opportunities, and long-term retention—all valuable for your book of business.
Happy clients are more likely to return for additional services and may even introduce you to friends and family. Earning loyalty through excellent service is a powerful way to keep your business growing.
Diversify Your Offerings: Cross-Selling and Ancillary Products
At Advocate Financial, we don't only offer Medicare to our agents. We also offer, ACA, Ancillary, Dental, Vision, Hearing and much more. Selling additional product lines is one of the best ways to counterbalance the impacts of non-commissionable plans. Ancillary products and life insurance not only generate income but also provide comprehensive coverage options for clients.
Here's how to approach different ancillary options:
Affordable Care Act (ACA) Plans
Adding Affordable Care Act (ACA) insurance to your portfolio expands your client base and diversifies your revenue streams. Offering ACA plans enables you to serve families, younger individuals, and clients who may need coverage before they age into Medicare. Building these relationships early can lead to smoother transitions into Medicare down the line, making ACA a smart addition to your offerings.
Final Expense Insurance
Many clients are unprepared for the high costs of final arrangements, which can easily reach up to $10,000. By discussing final expense insurance, you can help clients plan for this eventuality and ease the financial burden on their loved ones during grievance.
Dental, Vision, & Hearing
Dental, vision, and hearing (DVH) insurance complements Medicare Advantage plans by covering areas where standard MA plans might be limited. With no underwriting requirements, DVH insurance can be written year-round, making it an accessible add-on to your clients' coverage. By explaining the specific advantages of DVH based on each clients' needs, you can offer valuable coverage while strengthening your client relationship.
Hospital Indemnity
Hospital Indemnity plans are a great fit alongside Medicare Advantage plans, covering potential hospital-related expenses not fully covered by Medicare Advantage. The plans provide beneficiaries with a lump sum that can be used for expenses like ER visits, surgeries, medications, and transportation. The flexibility of hospital indemnity plans makes them an appealing cross-sell for clients who want financial protection in case of unexpected hospital stays.
Adapting to non-commissionable Medicare Advantage plans doesn't mean you have to sacrifice success. By continuing to serve clients' best interests, diversifying your product offerings, and exploring cross-selling opportunities—including ACA—you can continue to thrive during AEP and beyond. Use this shift as a reminder of the importance of flexibility, and remember that every connection you make today is a building block for tomorrow's growth.
If you need more guidance on how to adjust your strategy during AEP, feel free to reach out to Advocate Financials' office at (800) 943-2386 for additional support and resources. Let's navigate this change together and continue to make a difference for your clients.