Path to Profitability: Market Risks Facing Agencies and Carriers for Medicare Open Enrollment 2025

At first glance, having the most profitable Medicare season comes down to matching your distribution channels to the anticipated size of the market opportunity in a particular state and planning your sales coverage accordingly. Yet, optimizing your distribution channel management is more complex than “park a bunch of agents in Florida.” 

Before you ramp up your producer force for Medicare open enrollment, understand your market risks and opportunities.

Where are the Medicare opportunities in 2025? (It might be Florida)

Florida is obvious as a senior market: Year after year, Florida ranks first among states where more retirement-age Americans move in than are moving out. In fact, it’s terribly predictable that Americans have tended to move south and east as they age, seeking climates that are warmer than during their working years. To that point, Arizona, Texas, North Carolina, and South Carolina are the second-through-fifth-most-popular states for retiree moves in the most recently available data. 

These coastal states are also more likely to have Medicare Advantage users. Since Medicare Advantage plan members can change plans every year if they’d like, it makes sense to focus staffing there during open enrollment to service existing plans and enroll new members.

Yet, Florida’s extreme weather events, property and casualty insurance, and desirability have all contributed to the state having among the highest inflation rates, higher than the national average. (Retirees, famously, have little wiggle room for inflation tolerance 😬.)

To further complicate the picture, in a Bankrate assessment of the best states for retirement, the top five states that retirees are moving to were largely panned, with only South Carolina making the top 10. Bankrate ranked states based on factors like wellbeing, access to healthcare, inflation and cost of living. 

What does that have to do with Medicare? Taken together, it means Florida, for all its beautiful beaches, may not be able to economically sustain the portion of the population that wants to live in perpetual sunshine (broken by the occasional hurricane).

The other aspect of Florida’s risk is that you can’t swing a gator without smacking an insurance agency or financial advisory office. A crowded sales market means your ROI loses ground, and you have to spend big money to get your products in front of your end consumer. That also means that finding Medicare producers who already have well-established funnels and relationships is more important in your recruitment and onboarding effort.

Meanwhile, Florida isn’t the only haven for retirees. Florida doesn’t even have the highest proportion of seniors in their state population: That distinction belongs to Maine, where more than 30 percent of the population is older than 60. 

Key takeaways: 

• Florida is an important market, but it’s far from the only market. 
• Staying in touch with demographics can give you a bead on whether you’re missing key opportunities in less crowded states that have a better ROI. 
• Producers with established business funnels are essential to recruiting in saturated markets.

The Trump Administration: a double-edged sword

President Donald J. Trump took office in early 2025 with some wild-card approaches to federal administration, including an immediate freeze of federal funds that could have had overwhelming impacts on Medicare billing, claims, and payments. While internal memos have reversed course and federal courts have been quick to halt many of the executive-order impacts, the future outlook of even staid and regular government programs is uncertain.

Trump has promised to slash regulation, and with the U.S. Supreme Court’s end of the Chevron Deference, we can anticipate loosened regulations in those federally regulated pieces of the insurance industry such as healthcare and Medicare. For carriers and agencies in these spaces, that could offer welcome relief from some documentation and advertising practices. However, this also means returning more decisions to the state level.

Insurance businesses aren’t strangers to state-by-state variation in regulations. But, if the federal government loosens control of Medicare, we’ll likely see the small gaps between state regulations widen according to their individual states’ administrative philosophies. Animus rhetoric is likely to galvanize blue-state politicians to enact more market restrictions in their states.

State regulations can have a big impact on the profitability of your products. For those who work in multiple states, these regulatory changes may drive the effort you put into your Medicare distribution channels in any given state. 

Location and Medicare open enrollment: Supplement plan changes validate regulatory risk

Approximately 67 million Americans get their health insurance covered in some form through Medicare, either through Original Medicare or through an Advantage plan. Most of the people enrolled in Original Medicare have a Part D plan, which they have the opportunity to enroll in every year. And about four in 10 enrollees in Original Medicare carry a Medicare supplement plan.

Part D plans are up for grabs every fall during open enrollment. And recent state regulatory changes mean some supplement plans will see more turnover than carriers may have seen in the past. States like Washington have enacted new regulations that enable consumers to exchange supplement plans without medical underwriting as long as the benefits are substantially similar or the new plan offers fewer benefits.

Supplement plans have long been understood as a static piece of insurance. Sell someone a plan when they reach 65, and then rest on those renewing commission payments for the next 20 years. In fact, this is such a tried and true method that these trailing commissions are a retirement strategy unto themselves for Medicare agents.

Yet, carriers and everyone else in the distribution channel for Medicare supplement (aka Medsup, aka Medigap) plans could have a rude awakening if consumers begin swapping out plans as they’re allowed under these new regulations. Take note: Continuing to service supplement policies may require more effort in the states that have enacted similar legislation, and it behooves agencies and carriers to know how much exposure they have in those states.

It’s also worth noting that Medigap plans are most popular in the middle of the country, with the Midwest boasting the highest percentage of Medicare enrollees who rely on Original Medicare paired with a Medsup plan.

Medicare Advantage open enrollment poses more churn risk on the coast

Medicare Advantage has swept the coasts, with 32.8 million Americans relying on private Advantage plans for their health insurance needs. Those 32.8 million Americans represent 54 percent of the Medicare market, and they’re all eligible to swap out plans during the January-to-March Medicare Advantage open enrollment period.

This is a big opportunity for carriers and agencies to scoop their competitors’ business, but it also represents the risk of churn, as their own existing consumer base re-evaluates their coverage needs and network for the year.

Historically,  6.2 million Medicare beneficiaries take advantage of Medicare open enrollment season, representing 10 percent of the potential market, which is likely to increase as the American population grays.

Also concerning: While Advantage plans have been largely profitable for carriers that get Medicare reimbursements for covering senior care, Moody’s has noted a decline in Advantage profitability in the last few years. Some pundits are saying it’s just an overcorrection in the aftermath of backed up care from the pandemic, but Medicare has also adjusted its reimbursement model to shore up the swiftly approaching date of the program’s bankruptcy.  

An agile approach to distribution channel management is key to profitability for Medicare agencies and carriers in 2025

It’s clearly time to reevaluate your distribution channels and the locations of opportunity for your Medicare products. And it’s clear that, when a new legislative environment can tip at the stroke of a pen, you need to have an equally quick ability to adjust your distribution channels to match new zones of opportunity and maintain Medicare open enrollment best practices. 

With the right distribution channel management software, you can meet the challenges of this changing environment and take advantage of opportunities as they open up. AgentSync’s Manage software allows Medicare carriers and agencies unparalleled flexibility and agility, so you can:

• Evaluate your current distribution channels for gaps and opportunities with at-a-glance reporting and internal scorecards.
• Recruit both fresh and veteran Medicare producers in critical sales regions with intuitive workflows and onboarding portals.
• Move into new regions and zones of opportunity with the ability to apply for new licenses and appointments en masse with a few mouse clicks.
• Scale back your distribution channels in underperforming or undesirable regions with bulk terminations.

See how you can end the chaos of Medicare open enrollment season for you and your distribution partners with AgentSync Manage and watch a demo today.

About AgentSync

AgentSync provides Distribution Channel Management (DCM) solutions that connect the insurance ecosystem. By automating producer onboarding workflows and integrating real-time data across systems, AgentSync enables insurers to scale and optimize their distribution networks while remaining compliant. Our configurable, intuitive platform simplifies the producer ready-to-sell process, supported by API connectivity for seamless data exchange across systems. AgentSync recognizes compliance as the ultimate enabler for optimized distribution, unlocking new revenue opportunity and agility to adapt in a rapidly evolving industry. Founded in 2018 by Niji Sabharwal and Jenn Knight, and headquartered in Denver, CO, AgentSync has been recognized as one of Denver’s Best Places to Work, a Forbes Magazine Cloud 100 Rising Star, an Insurtech Insights Future 50 winner, and was ranked 65th in Forbes’ America’s Best Startup Employers 2023. To learn more, visit www.agentsync.io.