As a result of recent lawsuits regarding their 2025 Medicare Final Rule, the Centers for Medicare & Medicaid Services (CMS) issued updates to 2025 Medicare Advantage and Part D broker commissions on July 18, 2024.
The latest figures supersede those in the original Contract Year 2025 Agent and Broker Compensation Rates, Submissions, and Training and Testing Requirements memo issued June 28, 2024.
Here’s what you need to know.
What Will 2025 Medicare Broker Commissions Look Like?
Broker commissions are still increasing for the 10th year in a row; however, the Medicare increases for 2025 now exclude a fixed administrative fee. Additionally, CMS will reinstate the regulatory framework [42 C.F.R. 422.2274(e)] which allows for “Payments other than compensation (administrative payments).” Therefore, payments for services other than enrollment (e.g., training, customer service, agent recruitment, operational overhead or assistance with completion of health risk assessments) are permitted until the lawsuits are resolved.
Carriers will pay 2025 Medicare commissions similarly to past years — at or below the maximum amounts for the year set by CMS.
Carriers will pay 2025 Medicare commissions similarly to 2024 Medicare commissions — at or below the maximum amounts for the year set by CMS. Commissions may vary from carrier to carrier and plan to plan.
Medicare Part D Commissions
How are agents compensated under CMS rules for Medicare Part D? For 2025 Part D commissions…
- Initial commissions will increase from $100/member/year to $109/member/year, a 9% change YOY.
- Renewal commissions will increase from $50/member/year to $55/member/year, a 10% change YOY.
Compared to the commissions previously stated, CMS has removed the one-time administrative increases of $100 to initial enrollments and $50 to renewals.
Medicare Advantage Commissions
The 2025 Medicare Advantage commissions are broken out by state/region:
- For CT, PA and DC, initial Medicare Advantage commissions will increase from $689/member/year to $705/member/year, a 2.32% change YOY. Renewal commissions will increase from $345/member/year to $353/member/year, a 2.32% change YOY.
- For CA and NJ, 2025 initial Medicare Advantage commissions will increase from $762/member/year to $780/member/year, a 2.36% change YOY. 2025 renewal Medicare Advantage commissions will increase from $381/member/year to $390/member/year, a 2.36% change YOY.
- For Puerto Rico and the U.S. Virgin Islands, initial MA commissions will increase from $418/member/year to $428/member/year, a 2.39% change YOY. Renewal commissions will increase from $209/member/year to $214/member/year, a 2.39% change YOY.
- In all other states, initial MA commissions will increase from $611/member/year to $626/member/year, a 2.45% change YOY. Renewal commissions will increase from $306/member/year to $313/member/year, a 2.29% change YOY.
Compared to the commissions previously stated, CMS has removed the one-time administrative increases of $100 to initial enrollments and $50 to renewals.
MA & PDP Maximum Broker Compensation for 2025
| Initial | Renewal | |||||
| Product | Region | 2024 | 2025 | % | 2024 | 2025 | % |
| MAPD | National | $611 | $626 | 2.45% | $306 | $313 | 2.29% |
CT, PA, DC | $689 | $705 | 2.32% | $345 | $353 | 2.32% | |
CA, NJ | $762 | $780 | 2.36% | $381 | $390 | 2.36% | |
Puerto Rico, U.S. Virgin Islands | $418 | $428 | 2.39% | $209 | $214 | 2.39% | |
| PDP | National | $100 | $109 | 9% | $50 | $55 | 10% |
(By comparison, 2024 Medicare Advantage commission increases ranged from 1.46% to 1.77%.)
CMS Final Rule 2025 Agent Compensation Changes Update
CMS’ 2025 Medicare Advantage & Part D Final Rule included sweeping changes to Medicare agent compensation. As a result, many in the industry expected to see standardized commissions and a cap on agent/broker non-salary compensation in 2025. However, on July 3, 2024, a federal judge in Texas granted a stay in Americans for Beneficiary Choice’s (ABC’s) and Council for Medicare Choice’s (CMC’s) lawsuits against the Department of Health and Human Services (HHS).
Right now, the effective date of CMS’ Medicare Final Rule 2025 commission changes is on hold while court proceedings decide if these changes exceed CMS’ statutory authority, are arbitrary and capricious, and were made following the proper procedures. The current ABC and CMC v. HHS lawsuits will determine if the CMS Medicare agent and broker compensation changes below can go into effect in the future.
- Eliminating separate administrative fees
- Setting clear, fixed amounts for MA and Part D sales, adjusted annually based on fair market value
- Capping agent and broker non-salary compensation
- Prohibiting enrollment incentives that may bias agent recommendations
These changes would require carriers to pay the same, set commissions, established by CMS, for MA and Part D sales. They may also affect and, potentially, eliminate health risk assessments (HRA) fees, marketing co-op, and enrollment-based bonuses offered by plans.
A final court outcome is not expected until sometime in 2025, or possibly even 2026.
The recent Medicare commissions court cases and changes can make it difficult to understand what’s happening with Medicare commissions. However, we can say that, as long as the court-ordered stay is in place, you can expect commission structure and opportunities to maintain the current status quo!
Have additional questions? We’re here to help. Please contact your sales specialist for personalized assistance.
Editor’s Note: This post was originally published July 1, 2024. It has since been updated to reflect updates due to recent litigation and CMS’ revised 2025 Medicare commissions.
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