The Role of Brokers in Healthcare, and How It’s Changed

The first thing many people will tell you about health insurance is that it’s complicated. Between public and private plans, HMOs, PPOs, and high deductibles, it can be hard to know which plan is right for you.

It has been recorded that about half (51%) of insured adults report some difficulty understanding at least one aspect of their health insurance, including what insurance covers, out-of-pocket costs, and benefit explanations.

That’s where brokers come in. Brokers explain health insurance plans to consumers and help them decide which plans work best for them. Healthcare is not one-size-fits-all. Therefore, potential enrollees need to consider their own personal needs and preferences. Patients may have questions about monthly payments, out-of-pocket costs, and in-network providers, for example.

But brokers have become a hot topic in healthcare lately, particularly due to lawsuits over alleged kickbacks. The Department of Justice is currently suing large Medicare providers, accusing them of paying millions to brokers in exchange for directing patients toward plans that would give insurers the most money.

What’s the Difference Between a Sales Agent and a Broker?

Though commonly confused, sales agents and brokers have different employment models, though both are required to have a license to operate in their state.

Brokers work with different health plan providers—typically insurance companies—to find potential enrollees in their area and share several options based on the patients’ needs. Typically, independent brokers are paid by the insurance companies they represent, with no extra fee or cost to you for enrolling in Medicare through a broker.

Sales agents, however, are employed by one health plan provider, either public or private, and look to sell that company’s plans to patients. Sales agents often work on commission, though payment models vary based on where the employee works.

How Has the Job Changed in the Last 20 Years?

Brokers have seen changes in policies over the past 15 years from various presidential administrations, and these have changed how they approach their jobs. With many more changes coming in the fall, it is more important than ever to trust your broker to assist you in making the right plan choice.

For one, the implementation of the Affordable Care Act (ACA), which former President Barack Obama signed into law on May 23, 2010, and the creation of the ACA marketplace, which opened on October 1, 2013, created a lot of uncertainty and confusion.

The introduction of Medicare Part D in 2006, which implemented coverage of outpatient medications, was another major shift. This was compounded by additional changes codified in the 2022 Inflation Reduction Act that added an out-of-pocket spending cap and drug discounts for patients on Medicaid.

Former President Joe Biden also limited broker access to Healthcare.gov to prevent plan changes without patient consent. Under the Biden administration, the Centers for Medicare and Medicaid Services (CMS) also finalized new rules in January to penalize brokers who changed plans without patients’ knowledge.

Why Should Someone Use a Broker?

The Medicare process can be overwhelming. A licensed Medicare broker will listen to you and give you information about your coverage options that is based on your needs and preferences. Working with a trained broker can help you save time and money, ultimately helping you find the right plan.

Crystal Manning has been a licensed Medicare Advisor for over 25 years and is authorized to present Medicare options in 10 states. Contact her at (412) 716-4942 or crystalmanning33@gmail.com, and her daughter Dvonya Sedlacko-Stephens at (412) 657-3889 or djsedlacko@gmail.com.