Medicare Advantage & PDP Commissions
CMS regulates commissions for both Medicare Advantage (MA) and Prescription Drug Plans (PDPs) by setting a Fair Market Value (FMV) cap each year. MA FMV rates have risen more than 40% in the last six years, and PDP FMV rates are up over 55%.
Understanding the Rates: Initial vs. Renewal
Initial / New-to-Medicare
- Paid when your client is enrolling in an MA plan for the first time.
- Paid at the full initial-year rate, even if the enrollment starts late in the year — no proration for true "new-to-Medicare" cases.
- Paid in a lump sum after approval.
Renewal / Replacement
- Paid when a client moves from one MA plan to another midyear.
- Prorated based on how many months remain in the calendar year.
- Second-year renewals are paid at the renewal rate, typically monthly.
Example 1: Mrs. Smith enrolls in Part B and starts MA coverage 9/1/2025. She's new to Medicare. You earn the full 2025 initial rate of $626.
Example 2: Mrs. Smith changes plans effective 8/1/2025. Renewal rate is $313/year, so you earn 5/12 × $313 = $130.42.
Example 2: Mrs. Smith changes plans effective 8/1/2025. Renewal rate is $313/year, so you earn 5/12 × $313 = $130.42.
Medicare Advantage — Maximum CMS FMV (per member year)
| Region | 2025 Initial / Renewal | 2026 Initial / Renewal |
|---|---|---|
| All other states | $626 / $313 | $694 / $347 |
| CT, PA, DC | $705 / $353 | $781 / $391 |
| CA, NJ | $780 / $390 | $864 / $432 |
| PR & USVI | $428 / $214 | $474 / $237 |
Prescription Drug Plans — Maximum CMS FMV
| Year | Initial | Renewal |
|---|---|---|
| 2025 | $109 | $55 |
| 2026 | $114 | $57 |
Why Ancillary Sales Matter
Ancillary products pay year-round, use rolling 12-month commission schedules, and boost retention. Commissions often range 50–60% of annualized premium with 9–12 month advances.
Medicare Supplement Commissions
Usually 21–22% of annualized premium for the first 6+ years. Typical AP ≈ $1,500 → $330/year commission. Often paid as 12-month advances. Renewals are paid monthly after month 13.
Key Takeaways
- New-to-Medicare = full initial-year commission, no proration
- Plan-to-plan switches = prorated renewals
- Build wealth through renewals + ancillaries
- Know CMS FMV rules and regional variations
- Rates adjust annually — stay updated