What is a Medicare agent? For that matter, what is a Medicare broker? Are they the same or different? And why on earth would I need one?

Here at the Blog, we tend to focus on Medicare every fall during open enrollment, since that’s when the Medicare marketing machine really cranks up as current enrollees have the ability to change plans without penalty. But Medicare is actually a year-round endeavor here in the U.S., if for no other reason than the fact that about 10,000 baby boomers are turning 65 every single day. These newly-eligible citizens often find themselves ill-equipped to make one of the most important choices of their retirement years.

Many will turn to licensed agents or brokers to guide them through. To help us understand the difference, we’re turning to this 2023 article from a website we’ve used before, called Verywell Health.  It was written by Tolu Ajiboye, a health writer who works with medical, wellness, biotech, and other healthcare technology companies.

Medicare Agents and Brokers: Helping Dispel the Confusion

She begins her article by stating the obvious. “Medicare and its numerous plans can be quite confusing,” she writes. “Friends and online guides can be very helpful but having an expert to guide you in choosing the best plans for your individual needs has its advantages. This is where Medicare agents and brokers come in.”

According to the basic definition, agents and brokers are similar. Agents work with one single insurance company selling their specific products, while brokers are licensed to write plans with numerous carriers, meaning they have access to unlimited plan options. Beyond that, which is better – and do you need one?

Medicare Agents and Brokers: Some Subtle Differences

First, Ajiboye walks us through the particulars of what a Medicare agentis. They are considered a licensed expert that helps you “review and evaluate” plans and their benefits, and acts as a guide to choosing the right one for you.

“There are two kinds of Medicare insurance agents,” Ajiboye explains. “The first is the independent Medicare agent. This type of Medicare agent works with many different insurance companies and can enroll you in health plans from any of them. The second kind is the captive Medicare agent. Unlike independent agents, captive agents partner with only one insurance company and are limited to plans from that particular insurer when assisting Medicare beneficiaries.”

In contrast, she tells us, a Medicare broker—while similar to an independent agent—is not “bound to just one insurer”, but instead seeks to educate you about and enroll you in plans from various insurance companies.  

Choosing Between “Independent” and “Captive”

Ajiboye notes that you may already be thinking that independent agents and brokers might seem like the more attractive options. After all, she writes, “They have some advantages over captive agents.”

On the one hand, they represent different insurance companies, which means you get a wider variety of plans to choose from. “And because they’re not employed or bound to just one insurer, you’re more likely to get objective recommendations from them,” she adds.

But there is a downside, and it comes down to a potential lack of depth. Independent agents and brokers might not have as much comprehensive knowledge of each plan, simply because they represent so many.

“On the other hand,” Ajiboye writes, “working with a captive agent means that you get advice and recommendations from an expert who likely has extensive knowledge of the health plans they sell. The disadvantage with captive agents is that you don’t get to explore benefits from other insurance companies that may fit your needs better.”

How Can a Medicare Broker or Agent Help You?

What you chiefly get from working with an agent or broker is expert knowledge. Every year, they have to complete training—along with a test—to make sure that they are up-to-date on the latest details about Medicare’s health and prescription drug plans.  

Working with an agent or broker can help you in a handful of key ways.

First, and perhaps most obvious, is that they can help you review health plans and make sure that you end up with the one that suits you and your needs best. An agent or broker will streamline your options, talk you through the process, and help you enroll. As Ajiboye writes, “Medicare plans, their benefits, rules, and exceptions can be quite overwhelming to navigate on one’s own.”

Second, they will aid you in evaluating your current coverage. An agent or broker will look at your current plan, see if it meets your needs, and present you with better options if it doesn’t.

Third, an agent or broker will save you both time and effort, helping you maximize your efficiency in your search for a plan and still get great value. “Without assistance from an agent or broker, if you want to have a variety of options to evaluate, you have to interface with different insurers—a process that can be time-consuming,” Ajiboye writes.

An Agent or Broker Can Help You Meet Medigap Requirements

Finally, Ajiboye tells us that working with an agent or broker can assist you with medical underwriting. “If you try to purchase a Medigap plan outside of your open enrollment period, the insurance company doesn’t have to offer you the same premium offered during your open enrollment premium. Instead, they can decide to go through the process of medical underwriting,” she explains.

This underwriter will assess your current state of health and use that to determine the plan’s premium. “The insurance company may also choose not to enroll you in the plan at all because of underlying health conditions (if any),” Ajiboye adds. For this reason, a Medicare agent or broker can support you in determining whether you’ll meet the underwriting requirements for the plans you’re considering.  

The Good News: Agents and Brokers Charge You Nothing

While few things in life are free, here’s some rare good news: the assistance of a Medicare agent or broker costs you nothing. It’s completely free. So, the logical next question is, of course: how do they get paid?

“Their compensation depends on the kind of agent or broker they are,” Ajiboye explains. “Some agents are employed directly by the insurance companies they represent. In contrast, others merely have contracts based on enrollments they make.”

She adds, “Most agents get paid by commission. When they enroll someone in a plan, they receive a payment for the first year of the policy. And for every subsequent year the person remains on the plan, the enrolling agent or broker gets the initial amount. The commission they receive for enrolling someone in a plan is not fixed. It’s determined by the contracts they have with the insurance company.”

Medicare Agents and Brokers: How Do You Choose?

Ajiboye tells us that you should look for a few important things when you’re selecting an agent or broker to help you.

First, make sure that whoever you choose is experienced with selling plans in your state. “Plan availability, benefits rules, and exceptions differ from state to state. So you should go with an agent or broker with substantial experience selling Medicare plans in your state,” she writes.

Next, ensure that the agent or broker is licensed in your state, something you can check with your state insurance department to get verification. For this, all you need is the agent’s license number, which you can either request from them or find on their business card. 

Recommendations are another key thing to look for. “Ask the agent to provide you with references you can contact,” Ajiboye writes. “Get in touch with those references and find out their experience working with the agent or broker.”

And, lastly, find out if the agent or broker you’re considering specializes in any particular type of plan. “For instance,” Ajiboye explains, “some Medicare agents and brokers focus only on enrolling beneficiaries in Medigap plans. And so, if a Medicare Advantage plan would instead be a better choice for you, you won’t find out because the agent might not present them to you.”

A Final Word: Choose Carefully and Streamline the Process

In her conclusion, Ajiboye notes that there really is no downside to using a trustworthy, knowledgeable, licensed agent or broker with a good reputation to find an ideal Medicare plan. They can speed up the process substantially, and their services cost nothing.

You can use the State Health Insurance Assistance Program search tool to find one in your area. To search nationally by state, click here.  For assistance within the State of Washington, home to AgingOptions and Life Point Law, visit this website operated by the Office of the Insurance Commissioner. It lists offices in each county where free help is available.

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(originally reported at www.verywellhealth.com)