How many times have you heard that the Medicare Supplement market is “booming” with opportunity? (Insert commonplace statistic about the number of baby boomers turning 65 here.)
We won’t repeat the same old numbers (and yes, we’re guilty of mentioning them, too). Instead, we’ll tell you how you can capitalize on the opportunities that selling Medigap insurance provides and make baby boomers’ business all yours.
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Why Sell Med Supps
With Medicare Advantage sales far less abundant outside AEP, landing new prospects during spring, summer, and mid- to late-winter can be as tough as finding eggs near the end of an Easter egg hunt. But consider this: just 34 percent of Medicare beneficiaries are in an MA plan. The remaining 66 percent in Original Medicare could benefit from the extra coverage of Med Supps.
Here’s what makes selling Medicare Supplements so great:
- Most don’t require annual certifications.
- You can use them to connect with people in Original Medicare and make sales during lock-in.
- You can still enjoy the perks of selling Med Supps during the Annual Enrollment Period.
- e-Applications are available from most carriers, so you can sell over the phone.
- Med Supp production often qualifies for carrier incentive trips and bonuses, like Ritter’s 2019 $100K Cash Giveaway and their $10K Cash Giveaway.
- Approximately four million people will age into Medicare each year over the next 11 years!
About Med Supps
All Med Supp plans (A through N) are standardized. This means plans with the same letter offer the same benefits from carrier to carrier and in almost all states. (In Massachusetts, Minnesota, and Wisconsin, standardized plans can be changed without federal approval.) Conversely, plans with different letters offer different benefits.
If a company wants to issue Med Supp policies, they must offer Plan A.
Standard Medicare Supplement Plans & Benefits
|Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up|
|Part B coinsurance or copayment||50%||75%||2|
|Blood (first 3 pints)||50%||75%|
|Part A hospice care coinsurance or copayment||50%||75%|
|Skilled nursing facility care coinsurance||50%||75%|
|Part A deductible||50%||75%||50%|
|Part B deductible|
|Part B excess charge|
|Foreign travel exchange (up to plan limits)||80%||80%||80%||80%|
|Out-of-pocket limit3||N/A||N/A||N/A||N/A||$5,560 ($5,880 in 2020)||$2,780 ($2,940 in 2020)||N/A||N/A||N/A||N/A|
1A high-deductible Plan G will be available to current and new enrollees for 2020 and beyond. Enrollees in high-deductible Plan G must pay for their Medicare-covered costs up to the deductible amount before the Med Supp begins to pay.
2Med Supp pays 100% of the Part B coinsurance, excluding copayments of up to $20 for some office visits and up to $50 for ER visits that don’t lead to inpatient admission.
3Upon meeting your annual out-of-pocket (OOP) limit and annual Part B deductible, the Med Supp pays 100% of all covered services for the remainder of the calendar year (CY). OOP limits provided are for CY 2019, unless stated otherwise.
4Plans C and F will only be available to people eligible for Medicare before January 1, 2020. People who are eligible for Medicare as of January 1, 2020, or later will not be able to enroll in Plans C or F.
5Enrollees in high-deductible Plan F must pay for their Medicare-covered costs up to the deductible amount before the Med Supp begins to pay. High-deductible Plan F available to those eligible for Medicare before January 1, 2020.
Note: A check mark means the plan pays 100% of the benefit. Med Supp plans are standardized differently in MA, MN, and WI.
Med Supp plans that offer more coverage often have higher premiums (e.g., Plan G usually has a higher premium than Plan A).
All Med Supp plans are guaranteed renewable, meaning clients can stay in their plan if they continue to pay its premiums.
Med Supp Plans A, B, C, F, K, and L are guaranteed issue for people eligible for Medicare before January 1, 2020; Med Supp Plans D, G, M, and N are not. Hence, those eligible for Medicare before 2020 can’t join or switch to Plans D, G, M, and N outside of their Medigap open enrollment period if they aren’t healthy enough to pass underwriting.
With the upcoming 2020 Med Supp changes, Plans D and G will become guaranteed issue plans for people newly eligible for Medicare on or after January 1, 2020. This means, individuals eligible for Medicare in or after 2020 can switch to Plans D and G outside of their Medigap open enrollment period, even if they have past or present health conditions, as long as they have a guaranteed issue right.
Comparing Med Supp Rates
Since beneficiaries get the same benefits from Med Supp plans with the same letters, offering plans from carriers with the most competitive and stable premiums is key. You can easily target these plans through Ritter Insurance Marketing’s Medicare Quote Engine (MQE), a state-of-the-art plan comparison tool.
Using the MQE
First, log in to the Ritter Platform at App.RitterIM.com. (You can register for the site here.) Once you’re logged in, click on the “Quote” button. In the MQE, select “Med Supp” from the product drop-down menu, input your client’s age and zip code, and select their gender. Then, click “Quote Now.”
The MQE will display all the available plans and premiums, including annual (“A”), semi-annual (“S”), quarterly (“Q”), and monthly (“Bank”). (Most plans require monthly payments to be paid through a bank draft. Review a carrier’s agent guide or Med Supp application for their specific requirements.) You can filter down to specific plan types or carriers by clicking the salmon-colored, circular filter button (has three white, vertical lines in it).
In Ritter’s MQE, you’ll also see the following information:
- A.M. Best: Shows the carrier’s A.M. Best rating, which scores the carrier’s overall financial health. Typically, the higher the rating, the more stable the carrier.
- Note: An A rating for a small carrier that mainly offers Med Supp products may hold more weight than an A+ rating for a large carrier that offers other products as well.
- Fee: Displays the application fee required by the carrier if applicable
- Effective: Indicates the date the rate went into effect
- Note: It’s the agent’s responsibility to verify the rates provided to a client are correct. Rate sheets are available through carrier portals.
Talking with Clients
If your client is interested in a Med Supp plan, it’s important you ask them about their health, lifestyle, medical needs, budget, and preferences.
Med Supp plans can have different rates based on an individual’s zip code, age, gender, use of tobacco, and marital status. And while all plans give beneficiaries the flexibility to visit any Medicare provider in the U.S., only certain ones include a foreign travel emergency benefit.
Some clients are willing to pay more for the security that benefit-rich Med Supps offer, especially if they have or foresee health issues that could lead to large out-of-pocket expenses. In fact, the most popular plans right now are C and F, the ones offering the most coverage. Though, keep in mind, the upcoming Med Supp changes will soon prevent new Medicare eligibles from enrolling in these two plans. Additionally, there are times when you should recommend Med Supp plans K, L, M, and N.
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People appreciate an agent who provides products that fit their wants and needs. From our experience, those who have a large, diverse portfolio that includes multiple Med Supps build the strong client relationships that allow their businesses to thrive.
Editor’s Note: This article was originally published April 2017. It has been updated to display information more relevant to 2019.