CMS releases Medicare Advantage commissions for 2026

Just before the close of business (Eastern Time) on June 18, the Centers for Medicare and Medicaid Services released updated commission figures for Contract Year 2026. The figures represent the maximum Fair Market Value that Medicare Advantage Organizations (or carriers, as literally everyone else likes to call them), can offer to agents and brokers. We'll get to the good stuff in a minute, but first, we have to deal with the elephant in the room.

Do carriers have to pay commissions for Medicare Advantage and Prescription Drug Plan sales?

In short, no. Commission payments are, and always have been, made at the discretion of each carrier. Carriers may pay all, some, or none of the Fair Market Value (FMV) that CMS establishes for the upcoming contract year. And, as many of us have found out, carriers can adjust that figure at any time.

Wait. Don't carriers have to report their commission figures to CMS each year?

Yes, but let's take a look at the wording of this requirement. Straight from  the June 18 memo:

"42 C.F.R. §§ 422.2274(c)(5) and 423.2274(c)(5) require organizations to report to CMS whether the organization intends to use employed, captive, or independent agents or brokers in the upcoming plan year along with the specific rates or range of rates the plan will pay independent agents and brokers. In addition, if an organization pays referral fees, they must disclose the amount. The regulations state that organizations must provide this data to CMS by the last Friday in July which would be July 25, 2025, for the 2026 plan year."

That "range of rates" phrase is key. Looking at past filings, carriers report their possible payment lows ($0), and their maximums (generally, the FMV for that given year). That, plus the language in their agent agreements,  gives them the wiggle room they need to make adjustments mid-year.

What happened to the rules about administrative payments, overrides, and FMO support?

In its CY2025 final rule, CMS attempted to cap agent payments for administrative tasks, override provided to FMOs, and some contract terms between carriers and their downlines. On July 3, 2024, a federal court issued a stay to those portions of the rule, pausing those regulations from going into effect until all lawsuits had been resolved. As such, everyone is playing under the same rules they were for CY2024.

There's no clear timeline on when all the appeals will play out, but there is a possibility that we could see the regulations shift mid-year -- assuming that the courts rule in favor of CMS.

What are the maximum agent commissions for Medicare Advantage plans and Prescription Drug Plans in 2026?

The Fair Market Value, as it always has, depends somewhat on geography. However, agents will be pleased to see significant increases across the board.

Referral fees remain unchanged at $100 for Medicare Advantage plans and $25 for prescription drug plans.

So what now?

There is, of course, an element of wait-and-see. The entire industry is waiting for the litigation around the CY2025 rule to play out. But we can also focus on the here and now.

In raising the FMV to this extent, CMS seems to at least tacitly acknowledge the vital role that agents and brokers play in the Medicare ecosystem. The raise can be seen as recognition for a job well done.

That said, it's more important than ever for brokers to add additional carrier relationships. That gives you more opportunities and choices to help your clients find a just-right plan. And, if that just-right plan happens to pay a commission? Fantastic, because few people can afford to work for free.

We should also note that the memo makes clear (again) that no organization can pay an agent/broker anything above the Fair Market Value for Medicare Advantage and PDP enrollments. Organizations, whether carriers or other field marketing organizations,  that do pay above and beyond Fair Market Value risk running afoul of federal anti-kickback laws. They also risk not only their books of business, but those of the health insurance agents under them.