SHOULD I USE A MEDICARE BROKER?
These are the two most common questions I get when I’m consulting with someone about a Medicare Supplement or Medicare Advantage plan. A few others that always get asked and will be covered below are:
"What is a Medicare Insurance Broker?"
"Will I pay more if I use you as my Medicare Insurance Agent?"
"How does a Medicare Broker get paid?"
To learn about the different parts of Medicare refer to my Medicare 101 guide for a quick easy to read description of all of the different parts of Medicare.
Below I will answer everything you need to know about using a Medicare Broker for your Medicare needs.
A Medicare Broker is an Independent Insurance Agent who specializes in Medicare services and plans such as a Medicare Supplement plan, Medicare Advantage plan, and Part D prescription drug plan. A Medicare Broker will generally be appointed with multiple companies and be able to offer multiple product lines. They are also required to be licensed in whatever state they are writing business in. Some brokers may also have additional certification and training depending on carrier requirements and which products they offer. For example, in order to sell a Prescription Drug plan or Medicare Advantage plan agents are required to receive an AHIP certification and most carriers require a separate carrier specific certification in addition to that. On top of that Insurance Agents are required to maintain continuing education to continue carrying a valid insurance license. Keep in mind all Insurance Agents who specialize in Medicare benefits are not endorsed, employed, or recommended by Medicare, CMS, or any other governing body.
Not all Insurance Agents that sell Medicare products specialize in Medicare. Some Insurance Agents only represent one company. Would you go to a Dentist for a heart transplant? No. The point is utilizing a specialist is going to ensure that you make a sound decision. You don’t want to risk your retirement savings and health on a misinformed decision. You should use a Medicare Broker following reasons:
Learning about Medicare is a full time job. Insurance is complicated in general. Health Insurance being one of the more difficult lines to comprehend. Throw into the mix all of the Government rules and regulations and you’d think you were an aspiring law student after a few hours of reading.
Consider that, as just an initial investment, an Agent specializing in Medicare may spend:
- 35-40 hours studying for their license
- 2 hours passing the test
- 4-6 hours getting AHIP certified
- 30-40 hours learning about Medicare specifics
- 10-20 hours learning individual companies and underwriting guidelines
- and another 4-6 hours on carrier specific trainings.
At a very minimum you are receiving the advice and service of someone that has spent between 85-114 hours of their own time to be able to competently help you. Keep in mind this is an initial investment and not a representation of total time and energy spent. There is a lot more time invested in keeping an insurance license current, keeping up with the changes of Medicare, changes in carriers, underwriting guidelines, compliance, etc…
If you look at the average hourly wage as of 2018 which is $22.10. Your Medicare Broker has spent between $2,000 and $2,500 of their own time (likely a lot more than that) preparing to help you with Medicare. A service which you get to take advantage of, for absolutely free. And at the very least, it’s time you don’t have to spend learning about Medicare. A good broker should be able to properly educate you and help you make a decision in less than 2 hours.
You’ll always have access to the best rates and the best companies. If you sign up directly through the carrier, do you think that a year or two years after you purchase the policy that you’ll receive a phone call saying, “Hey just to let you know our competitor, Company B, offers the same exact policy and coverage as we do, but it’s $30/mo less than what we are charging you. On top of that, they are a wonderful and stable company. We’ll even help you switch over to them.” That would be a “no”. Insurance brokers are not bound to any one company and your retention and well being should be their #1 priority. If you’re not receiving important updates and annual reviews by your current Broker then it’s time to make a change.
- Knowledge provided by the Broker
- Service even after the sale provided by the Broker
- You’re not locked into one carrier
- The time saved is HUGE!
- Ability to shop your policy annually
- They represent multiple companies
- Incentive to help. Without you we don’t get paid.
- Unbiased guidance on selecting the best plan for your needs.
- You get the same benefits, for the same price, on top of having your own personal agent who is familiar with you and your specific situation. You’re a person, not a number.
- Multiple products in one place. You won’t have to go to Company A for your medigap plan, then contact Company B for your Part D plan, and finally Company C for that Final Expense policy you need.
Absolutely not. Independent Medicare Brokers are paid directly by the Insurance Carrier. It costs them less to pay us then it does to fully hire, train, and license their own employee. As an independent agent we assume the cost of licensing, certification, insurance, marketing, training, etc… If anything, having an active community of brokers probably helps keep their overall plan costs down. So whether you call a broker, or the carrier directly, your price per month will be exactly the same.
Here are some things to consider when choosing a broker:
- Are they licensed? Legally, they have to be licensed to enroll you in a Medicare related product. If they’re not willing to show you their license, do not do business with them
- Are they insured? Yes, a responsible Insurance Agent will have insurance on themselves. It’s called Errors & Omissions (E&O) Insurance and it’s designed to protect both the agent and consumer in the event of accidental misrepresentation, or a negligent act on behalf of the agent.
- Do they have any complaints filed against them? This can be a huge red flag, but always hear the agent out if they do. You shouldn’t exclude them from consideration without first hearing their side of the story. If it was a situation where they shouldn’t be allowed to do business anymore their license would have been revoked.
- Are they knowledgeable and able to answer your questions. Keep in mind we will not always be able to answer every single question on the spot. Medicare can be a complex subject and some things are out of our hands. Other things require us to reference material in order to make sure the information is accurate and up to date. As I stated earlier, things change. Which leads me to my next point
- If they don’t have the answer, are they guiding you on where to find it, or finding out for you if they can do so themselves. Trust me when I tell you it’s better to have to wait a few hours for an answer than to be given misinformation and finding out once it’s already too late
- Do you get along? Not are you guys best friends, but is the agent relatable and easy to talk to? Sometimes dealing with Medicare products requires you to disclose personal information and you want to be comfortable with who you’re talking to
- Are they available? This doesn’t mean they answer the call every time you beckon, but they should be easy to reach. They should also be prompt in returning phone calls and emails
- Does your agent have a face? Do you know who you’re speaking to? The senior market is pretty hot right now and because of that, we’re starting to see more 1-800 numbers and call center style companies popping up. Insurance sales is already a high turnover career and call centers are notorious for high turnover and inconsistent service. Not a good mix, especially when we’re talking about your livelihood and comfort in retirement. While this may not matter to everyone, I’m a firm advocate on having a specific agent that you know and trust to ensure the most consistent and best quality of service.
- Service after the sale. Are they there to answer your questions? Do they help you when you have a problem? Do they conduct policy reviews? An agent should never “set it and forget it”. Plan changes are inevitable, rate increases happen often, more competitive plans enter the market, and your needs change. You should never expect anything less from your agent!