Tyler Insurance GroupHow Medicare FMO commissions actually work
The carrier pays your commission and the FMO's override separately. A good FMO's cut does not come out of your check.
Because the override is roughly the same at every FMO, who pays the most is mostly a myth. The real question is what they do with money that is already theirs.
Know three numbers: street (the full CMS max you should be paid), the override (what the FMO earns above you), and any split (what an LOA agent gives up).
FMO compensation sounds complicated on purpose. Strip it down and it is simple: the carrier pays, and it pays in two directions. Understanding those two directions tells you almost everything you need to know about whether an FMO is a good deal.
Street level: what you should be paid
Street level means the full commission a carrier is allowed to pay an agent, set each year by CMS as a fair-market-value maximum. For 2026 the national maximum for a new Medicare Advantage enrollment is $694, with $347 for each renewal year. Part D is $114 new and $57 renewal. For 2027 those rise to $725 and $363 for Medicare Advantage, and $130 and $65 for Part D. Kentucky uses the national numbers. A few states like California and New Jersey run higher.
If you are paid at street level, you are getting the full amount the carrier is allowed to pay. That is the number to anchor on. Anything less means someone in the chain is taking a cut of your commission.
The override: how the FMO gets paid
Above street level, the carrier pays the FMO an override for holding the contract and supporting you, usually somewhere around $100 to $300 a year per enrollment depending on carrier and product. Here is the part that matters: that override is paid by the carrier, on top of your commission, not out of it. You writing a policy at full street level and the FMO earning its override are not in tension. Both happen at once.
Which leads to the myth worth killing. Because the override is roughly the same everywhere, no FMO is meaningfully paying you more out of their own pocket. When a recruiter leads with highest commissions, they are usually either describing the street level you should get anywhere, or waving at the override, which is theirs, not yours. The honest question is not who pays the most. It is what they do with money that is already theirs.
The split: what LOA agents give up
There is one case where you really are paid less: the LOA, or licensed-only-agent, model. Here the carrier pays the agency the full commission, and the agency pays you a share of it, keeping the rest plus the override. Some agents choose this early on in exchange for leads or a salary. Just know the trade: you are giving up part of your commission and, usually, ownership of the book. We break that down in a separate piece on who owns your book of business.
A word on the rules
One caveat worth saying plainly, because it is in the news. The dollar amounts above are the CMS maximums and they are real. But the broader rules around FMO and marketing payments are in active legal flux, and federal enforcement in 2025 and 2026 has focused on payments dressed up as marketing or bonuses to steer business. That is a reason to be skeptical of any FMO whose pitch is built on extra money flowing to you above the normal structure. Real value shows up as tools, training, and support, not as a number that sounds too good to be legal.
Once you see that the override is roughly fixed and paid by the carrier, the whole we pay more sales pitch falls apart. Every FMO is working with about the same money. The only thing that varies is whether they reinvest it in you or pocket it.
That reframes your entire FMO search. Stop shopping for the biggest number. Start shopping for what they do with a budget they all share: the tech, the training, the person who answers the phone, and whether you keep your book.
- Confirm you are paid at street level. Ask directly: am I paid the full CMS commission by the carrier? If not, find out exactly what split you are on and why.
- Ignore highest commission claims until you have checked they are not just describing street level or hand-waving at the override.
- If you are considering an LOA deal for leads or salary, write down what you are giving up in commission and ownership, and decide if the trade is worth it for where you are right now.
- Judge FMOs on what they build with the override, not on the override itself. Tools, training, support, release terms, book ownership. That is the real comparison.