UnitedHealthcare: Changes to Commissions for AARP Medicare Supplement Plans

Changes to Commissions for AARP Medicare Supplement Plans

Recently, UnitedHealthcare provided a new Commission Amendment featuring changes to the commission schedule for AARP® Medicare Supplement Insurance Plans, insured by UnitedHealthcare® Insurance Company (UHIC) and UnitedHealthcare® Insurance Company of America (UHICA). Please see your commission amendment dated February 13, 2025, for complete details on all upcoming changes.

One of the changes UnitedHealthcare is making is related to the persistency of the AARP Medicare Supplement policies.

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Why are they making this change?

As many of you already know and have experienced, the average AARP Medicare Supplement plans’ persistency is about 10 years. You may not be aware that most policies terminate (voluntarily or involuntarily) before year 15. This means that most policies do not pay a commission renewal beyond year 14. They have anticipate that ongoing industry trends and other environmental factors may shorten Medicare Supplement policy persistency even more.

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What is the change?

As a result of much consideration, UnitedHealthcare has decided to increase their commissions in years 7 through 10 resulting in commission payments through year 10 that are almost the same as they otherwise would have paid (before this change) for policies through year 14.

The second change they are making is to stop paying commissions beyond year 10, referred to as ‘lifetime’ commission renewals. The average annual renewal commission amount for years 11-14 was $40 each year, most of which will be re-allocated into years 7 through 10 as noted above.

For illustrative purposes only, below is an example based on the state of GA, Plan G (actual amounts vary by state and plan). Over 10 years, an agent will make an additional $140 in commissions with the new commission schedule.

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What states are changing?

This change will be made for AARP Medicare Supplement policies in all states that offer lifetime commission renewals today, except for: FL, MD, ME, NM, TX and WI. UnitedHealthcare anticipates making similar changes in these states later in 2025.

Exceptions are:

• The state of WA requires lifetime commission renewals which will continue.
• The states that pay 6 years of commission renewals today will not change: CT, IN and NY.

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When is this change effective?

This change applies to AARP Medicare Supplement policies, including internal replacement policies*, with a policy effective date of June 1, 2025, and later. This change does not impact policies effective prior to June 1, 2025, nor does it impact the commission renewals for those policies if your client changes plans (and the change is not an internal replacement*) after June 1, 2025.

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*Internal replacements include plan changes between UHIC and UHICA products. See your commission amendment for complete details.

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