It’s been a challenging time for Medicare agents. Regulatory proposals have threatened the Medicare agents’ commissions as well as their ability to operate as independent contractors. Now, the tide is turning once again with a recent push toward Medicare deregulation, which could give agents some breathing room.
The Misconception That Medicare Agents Earn Too Much
As part of the Senate Finance Committee, Senator Ron Wyden released a report proposing new rules to crack down on “marketing middlemen among Medicare Advantage plans.” The report decries the finding that insurance companies increased spending on agents’ and brokers’ fees and commissions from $2.4 billion in 2018 to $6.9 billion in 2023.
Although that does seem like a big increase, it’s important to consider the context. Inflation and wages increased overall during this timeframe. Also, the number of seniors aging into Medicare has surged – the U.S. Census Bureau puts the number of seniors turning 65 every day at 10,000.
In 2025, the maximum commission for an initial Medicare Advantage enrollment is $626 per member in most states and the renewal commission is just $313. This is hardly extravagant when you consider all the work and time that goes into helping a client enroll – the pre-AEP letter, the meeting, the paperwork, and the year-round follow-up – not to mention the ongoing training and research required.
The Push to Reclassify Independent Contractors
Many Medicare agents work as independent contractors, which means they operate their own small businesses and often enjoy the freedom and income potential that comes with this arrangement. However, there has been a push to reclassify many independent contractors as employees in recent years. While this often stems from the rise of gig work and some instances of misclassification, any changes could potentially make things worse for workers who want to remain as independent contractors.
Wyden was behind a bill that aimed to expand unemployment benefits but would also require states to adopt a strict test (known as the ABC test) for determining whether a worker is an independent contractor for the purposes of unemployment insurance. This test was adopted in California and, according to The Hill, resulted in tens of thousands of contractors losing work.
The New Focus on Deregulation
Executive Order 14192 was signed on January 31, 2025. Called “Unleashing Prosperity Through Deregulation,” it aims “to promote prudent financial management and alleviate unnecessary regulatory burdens.”
Specifically, the order calls on all agencies to repeal 10 prior regulations for each new regulation to counter any new costs associated with the regulation.
This order will likely impact many agencies, including CMS. In response, CMS has published a request for information from healthcare providers, researchers, stakeholders, health and drug plans, and other members of the public on how to implement the order. In particular, CMS wants to know what existing regulations should be waived, modified, or streamlined to reduce administrative burdens without compromising patient safety or the integrity of Medicare.
The Light at the End of the Tunnel
Regardless of your personal political views, the new push for reduced regulation will likely come as a relief. Many Medicare agents have been worried about the unintended consequences of reforms that could make it harder for them to earn a living. While it’s true that there are some bad actors in the Medicare industry, most agents work hard to earn a living by helping seniors find plans that meet their needs. With new regulations on hold, it seems likely that agents will be allowed to continue doing this without interference.
Do you have questions about regulations and compliance? WAP is here to help.