Local insurance agents stretched thin amid pay cuts, rising costs to clients

MANKATO — Area residents are confronting changes in the health insurance landscape as rising premiums, shrinking plan availability and cuts to agent compensation combine to make coverage harder to find and afford heading into 2026.

For seniors over the age of 65 and enrolling in Medicare, the situation is complex. Mankato insurance agent Mary McClure said options among Medicare Advantage, Medicare supplements and standalone prescription drug plans vary widely in premiums, provider networks and coverage rules.

“It’s overwhelming for them. I have young seniors come in that are just aging into Medicare. They’re 65 or they’re working a full-time job, fully engaged, and they leave here going, ‘There’s so much to know,’” McClure said.

Medicare coverage in Minnesota is expected to become more expensive in 2026, driven by higher premiums and revised contracts between insurers and major health care providers. Insurance companies statewide are now offering 11 stand-alone prescription drug plans, a decrease from 14 last year, according to a report in the Star Tribune. Instead of choosing original Medicare, beneficiaries can receive their Part A and Part B coverage through a private insurer under Medicare Advantage or Part C. These plans usually include Part D drug coverage, with the cost built into the overall premium.

Local insurance agents who guide clients through these decisions are facing financial strain as insurers reduce or eliminate commissions to agents, permitted under federal Centers for Medicare and Medicaid Services.

Thomas Deike, CEO of Midwest Insurance Group, said that along with the loss of compensation to agents, network restrictions among Medicare carriers in Blue Earth County have made plan selection difficult. For example, only one carrier of the four in the county, Medica, currently includes Mayo Clinic and the Orthopaedic and Fracture Clinic in-network. He said that many clients, especially seniors, struggle to navigate these complex networks without professional guidance.

Deike and McClure said they will continue to assist long-term clients this year despite declines in compensation, but question whether they can sustain their businesses if the trend continues.

“We are going to be doing a lot of volunteering this year. In order for us to keep the doors open, we need to get paid,” Deike said. “It’s a huge revenue challenge if we don’t get paid. If we don’t get paid, we can’t stay in business. If we’re not here, then people are kind of left out to dry.”

Thousands of Minnesotans are weighing limited and often more expensive options as open enrollment continues through December. In Minnesota, UCare, AARP Medicare Advantage from UnitedHealthcare, HealthPartners and Humana are “pulling out or scaling back” according to the state’s webpage on Medicare.

“It’s a huge need and if we’re not here, this is going to be catastrophic,” Deike said about the role agents play in consumer support.

Mary Sween has been a client of McClure’s for about 10 years and said, “Open enrollment every year is a problem. I couldn’t do it without an agent. I don’t know what people do. I really don’t know how you could ever figure it out by yourself.”

In some regions, negotiations between health systems and insurers have left patients uncertain about maintaining in-network access to key medical centers. McClure mentioned a letter received by a client of hers from Mayo Clinic in Rochester that reads: “Mayo Clinic is not in-network with most Medicare Advantage plans … Mayo Clinic in Rochester will not schedule appointments for patients with out-of-network Medicare Advantage plans.”

McClure, who has a caseload of about 1,200, the majority of the clients 65 or older, warned that consumers without reliable internet access or digital literacy may struggle most as in-person support diminishes.

“There’s going to be people that are going to not have the right plan — or maybe not even have a plan at all. People will just pick a plan because they don’t know anything; they’ll just maybe pick the least expensive plan,” she said. “But it’s going to be hard for them to figure that out on their own.”

In a letter to state Sen. Nick Frentz, of North Mankato, McClure emphasized that with carriers like UCare leaving the market and commissions being eliminated, agents face potential layoffs. She urged policymakers to address the crisis before the open enrollment period closes.

She said she traveled to Washington, D.C., with the National Association of Insurance and Financial Advisors in May, with a petition signed by 500 people, asking lawmakers at both the state and federal levels to address the impact of the policy on both agents and consumers.

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