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Why Kaiser Permanente Pays Low Commissions

Agents are commonly frustrated over Kaiser commission payouts. Health insurance brokers often ask each other the question, “How do you sell Kaiser Permanente and make any money?”

Many agents behind closed doors will admit that they won’t even mention Kaiser unless the client asks for it. Others will simply rejoice when a client chooses anything but Kaiser Permanente.

Low Commissions for IFP Sales

It’s definitely hard to make money selling Kaiser insurance plans for individuals and families in California. Kaiser Permanente California pays out only a one time reward of $100 per enrollee and $50 a year for renewals.

These low commission payouts cause many California brokers to view Kaiser Permanente as the least broker-friendly carrier in the state.

Why Does Kaiser Pay So Little?

Because they can. Kaiser Permanente doesn’t need to lure brokers to promote their products. Their network is limited, so they can only handle so many enrollments. Too much appeal could be a problem for Kaiser California.

Because they are member-focused. If you’re a broker, you may hate this, but you have to admit, it’s noble. Lower commissions mean lower premiums and higher quality care for their members.

Their focus is on giving their members the greatest experience and the greatest quality of care. Ultimately, Kaiser Permanente believes that it is these factors as opposed to broker commissions that will help them grow their enrollment.

Up until 2005, Kaiser Permanente wouldn’t even allow brokers to sell their IFP product. So they have improved in broker-friendliness some.

Will Kaiser Permanente raise their commissions?

Two factors could cause Kaiser Permanente to raise their commissions up to market levels:

  • Once they expand the networks
  • Competition from Blue Cross and Anthem

If and when Kaiser wants to increase enrollment, they may raise the commissions. First, they have to expand their networks and prepare to be able to take on more members. Then, if they find they’re having a hard time competing against Anthem Blue Cross and Blue Shield of California, you can expect commissions to rise.