UnitedHealthcare Ends Commissions on Medicare Drug Plans Amid Rising Costs
UnitedHealthcare has announced it will cease paying commissions to agents on Medicare prescription drug plans sold after June 1, 2025. This move follows similar actions by other insurers who are discontinuing commissions on certain Medicare Advantage products in 2024. Agents received notifications in May indicating that renewal and initial year commissions for these drug plans will be reduced to zero, impacting their compensation significantly.
This decision aligns with UnitedHealth Group's recent revision of its 2025 financial outlook due to increasing and broader care activities, as well as unexpectedly high medical costs among new Medicare Advantage enrollees. The insurer plans to factor these higher costs into its 2026 Medicare Advantage bids and pricing strategies in various markets.
Agents have expressed concerns over the unilateral nature of the commission cuts, noting the lack of negotiation and the financial strain caused by the elimination of these revenue streams. The reduction in commissions creates challenges for agents who provide ongoing support and services to policyholders, potentially threatening the sustainability of many brokerages.
Industry advocates such as Health Agents for America are calling on the Centers for Medicare and Medicaid Services (CMS) to address the issue. They argue that late-stage commission eliminations can lead to plan steering, where agents may be incentivized to prioritize plans yielding higher profits for carriers, potentially harming beneficiaries’ interests.
The ongoing changes in agent compensation models raise questions about the future of personalized Medicare sales and service. With carriers increasingly limiting commissions, agents face economic pressure that could reduce their ability to offer tailored assistance. This shift may prompt regulatory scrutiny regarding carriers’ practices and their impact on both agents and Medicare beneficiaries.
UnitedHealthcare has not publicly commented on the commission policy changes. The issue remains under close observation by insurance professionals and industry groups who advocate for maintaining fair compensation and protecting seniors’ access to trusted Medicare advice.