Insurance brokers bank on busy Medicare enrollment period

Medicare marketers expect shifts in the Medicare Advantage market to prove lucrative as beneficiaries react to changing benefits and less competition in certain regions, even though insurers such as Centene and Aetna have cut back on commissions.

“We haven't seen this much disruption in years, where you have a lot of consumers who need to shop and likely need to make switches,” GoHealth CEO Vijay Kotte said. “We’re feeling pretty good.” The Medicare annual enrollment period began Oct. 15 and ends Dec. 7.

Related: 2025 Medicare Advantage market takes shape amid turmoil

Medicare customers have historically not shopped around and tend to stick with the plans they already have.

But many of this year's policies aren't available for 2025, either because health insurance companies redesigned their offerings or pulled out of geographic markets in bids to boost profitability. In addition, frustration with Medicare Advantage insurers has provoked a growing number of providers to stop accepting at least some Medicare Advantage plans, which could lead enrollees to follow their preferred doctors and hospitals to other insurers. Some may opt for fee-for-service Medicare with supplemental plans instead.

All of this is good news for the brokers and independent agents who advise Medicare beneficiaries.

“With all the things going on in the Medicare Advantage market, it certainly will open up an opportunity for brokers, maybe one of the larger ones in recent years,” said Brad Ellis, senior director at Fitch Ratings.

The 2025 Medicare market could serve as a welcome turning point for GoHealth and other online brokerages. Their stock prices have fallen from the highs of 2020, when venture capital and private equity investors dropped millions into marketers that promised to streamline the sales process for an aging population.

As competition among marketers grew, however, customer acquisition costs skyrocketed and investor funding dried out, said Sam Melamed, founder of Insurance Forums, a social media platform for brokers and agents. Not all companies survived the drought.

The consulting giant WTW, for example, announced last month it would sell its brokerage, Tranzact, for a $2.1 billion loss. In May, Prudential shuttered Assurance IQ. Last month, SelectQuote projected it would sell 15% fewer Medicare Advantage plans this year because it could not afford to hire brokers.

For the companies that remain and can continue to invest in the Medicare market, the 2025 enrollment period could present a growth opportunity, said Melamed, who is also CEO of the dental and vision insurer NCD.

“If you're in the business of acquiring new customers, these exogenous events that stimulate more customer shopping just give your team more shots on the goal,” he said.

Additionally, providers increasingly refusing to join Medicare Advantage networks has driven more beneficiaries to evaluate alternatives. After San Diego-based Scripps Health announced last year, for example, that two of its physician groups would not contract with Medicare Advantage plans, dozens of customers called Craig Gussin to discuss their options.

“There's a smile on my face. If there was no change at all, they would never need us, right?,” said Gussin, president of Auerbach & Gussin, an insurance agency in Carlsbad, California. Gussin also is president of the National Association of Benefits and Insurance Professionals.

Other brokers are anticipating more demand for alternative products, such as Medigap plans that supplement fee-for-service Medicare, in response to providers exiting and insurers withdrawing from markets this year.

Most states allow Medicare supplement carriers to underwrite policyholders switching from Medicare Advantage, which can make policies too expensive or unavailable to people with preexisting conditions.

But when a Medicare Advantage plan disappears, the Centers for Medicare and Medicaid Services designates a special enrollment period for its former members, which allows them to sign up for Medigap without underwriting. The same may be available when large providers leave Medicare Advantage networks.

“In markets that have been more significantly disrupted by the changes, Medicare supplement will do even better,” eHealth CEO Fran Soistman said.

Insurance companies often compensate third-party marketers that sign up people, and some agents and brokers operate on a commission-only basis.

Every year, a few Medicare Part D insurers decide not to offer commissions. That's even more true for the 2025 annual enrollment period because the Inflation Reduction Act of 2022 beefed up the Medicare drug benefit in ways that may make the products less profitable, said Ronnell Nolan, president and CEO of Health Agents for America, a trade group.

Centene subsidiary Wellcare, for example — the largest Part D insurer with 6.6 million enrollees — will not pay brokers and brokers for selling standalone drug plans this year. CVS Health subsidiary Aetna will not pay for new Part D members while Humana and Cigna will not pay for new customers in certain Part D plans, Nolan said.

Nevertheless, Part D is a relatively small part of most brokers' business and losses on that product will be offset by opportunities in Medicare Advantage and Medigap, Nolan said. “It is what it is. They don't pay agents. We’ll write it for a year and see what happens."