Navigating Medicare: AEP Opportunities Amid Market Disruption

Understanding the Current Medicare Market Landscape

The Medicare market is experiencing a period of significant disruption and transformation. As Dwane McFerrin, Senior Vice President of Med Solutions at Senior Market Sales^® (SMS), makes clear, the industry is facing numerous challenges that are reshaping its landscape. This includes regulatory and carrier changes, ever-evolving consumer expectations, technology and plan affordability. Despite these hurdles, including commission cuts, the Medicare market continues to present substantial opportunities for agents who can navigate the complexities and leverage these changes to their advantage. This article details McFerrin’s insights, which originally aired as a video presentation (included below).

According to data from Telos Actuarial, the Medicare-eligible population is expected to grow from 68 million in 2024 to 80.3 million by 2033. This demographic shift indicates a robust market for Medicare products. However, the influx of new beneficiaries also bring about increased demand for Medicare services, which can strain existing systems and resources.

Key Challenges Facing the Medicare Industry

One primary challenge in the Medicare industry is the destabilization of the market caused by legislative and regulatory changes. The Inflation Reduction Act has significantly impacted standalone Part D plans, leading to increased premiums, and lower or even nonexistent agent commissions. This has removed incentives for consumers to avoid high-cost drugs, further driving up prescription costs.

Moreover, the introduction of the Premium Stabilization Demonstration, aimed to absorb Part D prescription drug costs for consumers, has had unintended consequences. Recent pullbacks on subsidies have set the stage for continued disruption and higher premiums in 2026. Carriers have responded by reducing electronic enrollment methods and discontinuing commissions in markets they plan to exit.

Legislative Impacts on Medicare Plans

Legislation plays a crucial role in shaping the Medicare market. The One Big Beautiful Bill Act and other proposed reforms seek to increase oversight and address issues such as upcoding of conditions and other fraudulent activity. Additionally, the Social Security and Medicare Boards of Trustees Annual Trust Fund Report projects that the Hospital Insurance Trust Fund will only be able to pay 100% of benefits until 2033, unless Congress takes action.

A significant development in the legal landscape came with a Texas judge's decision in 2025, to overturn the rule limiting insurance agent compensation on Medicare Advantage (MA) Plans. This decision vacated portions of a Centers for Medicare and Medicaid Services (CMS) rule that would have limited administrative payments and standardized compensation payments in the MA program. This ruling provides some relief for agents and their clients, ensuring that consumer education and access to Medicare products are not unduly restricted.

Strategic Recommendations for Agents

In this evolving landscape, agents must adapt their strategies to stay ahead. McFerrin recommends several actions to stabilize the market and ensure consumer access to trusted advisors. First, agents should advocate for the use of Maximum Out-of-Pocket calculations instead of True Out-of-Pocket costs to better reflect the consumer's financial burden. Additionally, allowing carriers to utilize pharmacy data for more accurate risk scoring can improve the timeliness and accuracy of reimbursements.

Another critical recommendation is to ensure that commissions and enrollment methods remain consistent once CMS approves a product. This prevents midstream changes that can disrupt the market and undermine consumer trust. Agents should also focus on retention programs, particularly for call centers, to ensure that consumer education and satisfaction remain high.

Opportunities for Consumers in a Shifting Market

Despite the challenges, there are numerous opportunities for consumers in the Medicare market. The growth of Chronic Condition Special Needs Plans (C-SNPs) represent a significant expansion area, offering tailored solutions for individuals with specific health conditions. Additionally, Medicare Supplement (Med Supp) plans continue to provide critical coverage options for those seeking flexibility and choice in their health care providers.

McFerrin emphasizes the importance of strategic partnerships and innovative solutions to meet consumer needs. For instance, pairing a Med Supp high deductible G plan with a hospital indemnity plan can offer more affordable coverage options without exposing consumers to the uncertainties of the birthday rule. This approach not only addresses affordability but also ensures that consumers have access to the necessary medical services.

Leveraging Resources for Informed Decision-Making

To navigate the complexities of the Medicare market, both agents and consumers need access to reliable resources and information. SMS offers a range of tools, technology, support and resources to help agents stay informed and effectively serve their clients. From advanced quoting and enrollment systems to applied artificial intelligence solutions, SMS is at the forefront of technological innovation in the Medicare space.

Download AEP 2026 Outlook: Opportunities in a Destabilized Market if you’re interested in learning more about the current state of the Medicare market. This document provides strategic recommendations, comprehensive insights and actionable advice, to help you save time and make more money during AEP and beyond.

By staying informed and adapting to the changing landscape, agents and consumers alike can seize the opportunities that arise amid market disruption. With the right strategies and resources, navigating the Medicare market can lead to successful outcomes and improved health care access for millions of beneficiaries.

If you’re an insurance agent serving the Medicare market, SMS would love to partner with you. Call 1.888.747.3810 to speak with a Med Solutions marketing consultant if we can assist your business in any way.