What defines a Medicare Broker and how do you choose the best one for you?
First, it’s important to understand that a Medicare Broker can have many titles. Bottom line, they are insurance agents. They represent insurance companies that offer the products you need to consider when evaluating your Medicare options.
Medicare Brokers must go through rigorous certifications annually. The additional certification applies to part D prescription drug and part C Medicare Advantage plans.
In addition, brokers must have a health and life insurance license. Each state has their own continuing education requirements.
TYPES OF MEDICARE BROKERS
There are several different business models that you might encounter when talking to someone that offers Medicare products. There is only one model that might charge you otherwise, working with a Medicare broker should be FREE to you. Insurance agents are paid by the insurance company when a policy is purchased.
There are some people who put themselves out there as coaches. These are people who claim to represent you, the consumer. You pay them a fee to find the best plan for you. They shouldn’t be representing any insurance companies and charging you a fee too.
Some people are more comfortable with working with a coach. They feel it’s better to pay someone that will represent them, not the insurance company.
Honestly, if you can find a good insurance agent, you don’t have to pay a coach. A reputable insurance agent should be evaluating the best plans for you, regardless.
Another model that you might see is someone that works directly for an insurance company. The plus side to this type of person is that they probably know every product from that one insurance company, inside and out, but that’s all they know.
Is there a downside to working with a direct writer? Only that they represent one insurance company. While the insurance company plan might be a good plan, it might not be the best one for you based on your lifestyle.
INDEPENDENT AGENT / BROKER
In this authors opinion, the better model for consumers is working with an independent broker. Someone who represents all of the major carriers and some of the local ones in your area. An independent agent should NOT charge you for their advice.
When a policy is sold, the agent / broker is paid a commission. Brokers receive commissions from insurance companies . It’s no different than using an independent agent when you purchase a car, home or life insurance.
A newer model evolving is a Medicare Broker call center. It is very similar to the independent agent model. Usually, the office full of people who do nothing but sell. (think of the bull pen at a stock broker office)
Often times, once the sale is made, they move on to the next person and you can’t get in touch with the person that sold you your insurance.
There are a few issues with a call center that you should be aware of:
First, they usually don’t keep a full staff year round. They ramp up for annual enrollment season from October – December. This means that the person you are talking to might have just started.
Since they are just hired for the busy season, most only work for 12 weeks. When you have questions in January or February, you won’t be able to talk to the same person.
Second, if they are located 500 miles away, it might be difficult for them to know your area. Will they know about the local doctor networks, hospitals, pharmacies around you.
Third, they may or may not have contracts with the local regional companies. This might limit them from offering you the best plan in your area. They are often limited to offering plans from national insurance companies.
Are you seeing commercials with Joe Namath, Joe Theismann and the likes of other famous people? Usually they are talking about Medicare Advantage plans. These commercials are usually produced by call centers. Be weary when you call a an 800 number unless you have a specific referral from someone you trust.
A Medicare Broker must go through rigorous training. This training applies to prescription drug (part D) and Medicare Advantage (part C) plans. Brokers must be AHIP Certified and also certified by each insurance company represented.
AHIP Training is annual. Agents must pass the test with a score of 90% or better within within 3 tries. If they don’t pass the annual training, they can’t represent you with anything Medicare.
In addition to the AHIP training, insurance agents must also pass a certification from each insurance company that they represent. For example, if someone represents 8 insurance companies for their prescription drug plans, they will have to certify with 8 companies.
Agents who sell part D prescription drug and part C Medicare Advantage plans, spend a lot of time studying each year. The intent is to give consumers peace of mind that their representative has met a higher standard.
In addition to the AHIP and insurance company certifications, Medicare Brokers are licensed life and health insurance agents. This requires them to take continuing education classes associated with each state where they hold a license.
Did you know that brokers representing Medicare products are paid by the insurance company? This is very similar to the agent you purchased your homeowner, automobile or life insurance policy from. The commission for a Medicare Broker determined by CMS (Centers for Medicare and Medicaid Services).
Commissions can vary by state and insurance companies, but are fairly consistent across the board.
The ethics are high for insurance professionals, and higher for those that represent Medicare products. Insurance agents must take take an ethics class every year.
As a consumer, the next time you get a phone call from someone calling about Medicare, ask them about their certifications. Ask them what states they are licensed in. Ask them if they are an independent agent or part of a call center.
Use the insights in this article to understand the type of agent you are talking with.
WHO WE ARE
Lynn Michel Insurance is an independent brokerage, representing national and local insurance companies that offer products for seniors. We are currently licensed in MD, VA, DC and DE. In 2021, we plan to obtain our license in NC, WV and FL.
Debbie DeChambeau, the founder of Lynn Michel Insurance started in the insurance industry as a junior in high school. While she took a detour for a few years due to a family crisis, she has always maintained her license, certifications and continuing education requirements.
If you are looking for an agent in a state we don’t represent, let us know. We have a large network that we can connect you with. You can feel confident that someone in our network is reputable and has completed all of the proper certifications.
Reach out to your financial advisor, accountant or estate planning attorney for referrals to someone they recommend.
ADDITIONAL INFO ABOUT THE AUTHOR
Debbie believes in continuing education for her profession. She earned the designations of a Certified Insurance Counselor (CIC), Accredited Advisor of Insurance (AAI) and Certified Professional Insurance Agent (CPIA).
Over the years, Debbie has cared for several family members. She was instrumental in helping to raise her niece and nephew after the death of her sister and cared for her grandmother, uncle and parents in their senior years.
Her love for podcasting and the insurance industry have her creating content that help seniors with their insurance decisions. Debbie tries to help caregivers understand what to expect in their new role.