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Complete Guide on How to Become a Medicare Agent

Insurance Agent Development
Feb 22, 2022
18
minute read
Nectar Team
Complete Guide on How to Become a Medicare Agent

If you've ever considered learning how to become a Medicare insurance sales agent, there's never been a better time. Public interest in Medicare Advantage is growing rapidly.

In 2020, 39% of Medicare beneficiaries had Advantage plans. With 9% growth year-over-year, the number of subscribers continues to increase. Experts believe that by 2030, Medicare Advantage plans will serve 51% of people who have Medicare.  

Coverage variety is also on the rise. The average new subscriber has access to an all-time high of 33 separate plans. It's a confusing landscape, which means there's a pressing need for knowledgeable agents.  

You can make a difference and a good living by selling Medicare Advantage plans. To get started, you'll need to learn about the different coverage options and rules for eligibility. You'll also need to get licensed, connect with carriers, and complete some training.  

It sounds like a lot at first, but don't worry. This article will tell you everything you need to know, starting with why it's a good bet in the first place.  

Is Selling Medicare Lucrative?

In short, yes. The average Medicare Advantage policy pays around $287 a year in commission if the purchase replaces an existing plan. However, you can get approximately double that — $573— if you write up a new Medicare Advantage plan for someone who hasn't had one before.

Assume for now that you primarily sell replacement policies and average $300 commission per policy. For example, if you sell 200 Medicare Advantage plans in your first year, you could earn $60,000 in Advantage commissions alone.

If you maintain that level in year two and retain 80% of your existing policyholders, your Advantage commission will increase to $100,000. That income will continue to grow annually, assuming you add new clients every year and hold on to a good percentage of your client base.

It's easier than you might think. An estimated 10,000 people turn 65 every day. By 2050, 22% of the U.S. population will be 65 or older — up from 16.9% in 2020. That's a lot of new customers.

Medicare Licenses and Training

Medicare Advantage is a great line to sell, whether you're a newcomer to selling insurance or an experienced insurance professional looking to diversify your portfolio. But no matter how much experience you have, you need proper Medicare insurance sales agent training to complete the certification process.

Why training matters

Medicare products and regulations change every year. As a result, new plans come on the market, and existing plans shift their offerings.

Sweeping Advantage-wide changes happen, too. In 2021, for example, the Centers for Medicare and Medicaid Services introduced newly mandated cost-sharing for prescription drug payments, and those changes will become active in 2022.  

Changes like these are why all Medicare insurance sales agents must complete annual training. By finishing this training before you start and maintaining it every year, you'll be better equipped to provide quality service and coverage.  

How long does it take to complete Medicare training?

If you've never trained to sell Medicare before, set aside two to three weeks to complete all of the requirements. The best time to get started is ASAP, even if the next open enrollment period is months away.

You need to know as much as possible about Medicare to earn policyholders' trust. Therefore, the sooner you get started, the deeper your learning will be.

Starting early also entails that you can begin onboarding more clients earlier. If you start this process well before open enrollment, you'll be ahead of the competition and positioned for early success.

If you've never trained to sell Medicare before, set aside two to three weeks to complete all of the requirements. The best time to get started is ASAP, even if the next open enrollment period is months away.  

You need to know as much as possible about Medicare to earn policyholders' trust. Therefore, the sooner you get started, the deeper your learning will be.

Starting early also means that you can begin onboarding more clients earlier. If you start this process well before open enrollment, you'll be ahead of the competition and positioned for early success.  

What kind of Medicare-related licenses do I need?

Just as with selling other types of insurance, you'll generally need a health insurance license to sell Medicare plans. Specific requirements for licensure vary by state, but you'll need a resident license for your own state and non-resident licenses for any other states in which you plan to sell.

You can find this information, including the documentation you'll need to submit, on each state's insurance department website. Once you're ready to apply, visit the National Insurance Producer Registry (NIPR).

The NIPR provides new licenses and renewals for agents in all 50 states. Its intuitive process helps to minimize paperwork and data entry, so you can get your health insurance license quickly without slowing your business down. The process works for both resident and non-resident licenses.

To sell Medicare plans, you'll also have to complete the process for America's Health Insurance Plans (AHIP) certification. These certifications exist to help protect seniors and reward agents who do things the right way.  

AHIP and FWA certifications

To sell Medicare Advantage plans, you'll have to complete the America's Health Insurance Plans (AHIP) certification in addition to each carrier's compliance and product certifications. These certifications exist to help protect seniors and reward agents who do things the right way.

AHIP Certification

AHIP certification is a requirement of the Centers for Medicare and Medicaid Services (CMS). CMS Medicare rules and regulations are subject to change every year, so all agents who sell Medicare need to take the updated AHIP certification test annually.

AHIP Medicare training covers:  

  • ‌Eligibility basics  
  • ‌Available benefits  
  • ‌Options for prescription drug coverage‌  
  • Marketing and enrollment regulations and compliance  

‌The test costs $175, but many carriers offer a discounted rate of $125 when you take it through one of their portals.

AHIP allows only three attempts at the final exam, so it's wise to invest some time preparing. There are many self-study AHIP courses available to help you study so you can pass it on the first try.

For more details on the AHIP certification, visit the AHIP website.

Fraud, waste, and abuse (FWA) training

FWA training covers:  

  • ‌Tools and industry practices for detecting Medicare fraud  
  • ‌The human and financial cost of fraud, waste, and abuse  
  • Correct reporting procedures  

‌Previously, agents had to take this training separately from the AHIP program, but AHIP now offers them both under the same umbrella.  

As with carrier contracting, you can gain a competitive advantage by completing your AHIP and FWA training early. This way, you won't have to spend time working through these courses as the open enrollment period approaches.

Securing carrier contracts  

Once you're licensed, you'll need to contract with Medicare carriers to sell their products. This process is also called "getting appointed."  

Certain carriers allow you to skip the contracting process if you already sell their other products. Others require you to contract for each new product line you sell. Double-check with your point of contact at each carrier to make sure you understand the proper procedure.  

Once you submit contracting paperwork with a carrier, expect processing and background checks to take about seven to 10 business days. Keep in mind that turnaround time can take anywhere from four to six weeks if open enrollment is approaching.  

Read your contract carefully when it arrives. It will list everything you need to know about your partnership with the carrier, including product requirements and how you'll receive payment for your sales and renewals.  

Carrier courses and recertification

Carriers will often require you to take product-specific courses alongside your AHIP training. The carrier may even cover the cost of your AHIP training. This varies by carrier, as do the specifics of product and compliance training. Always get clarification from each carrier you work with.  

Once you've started selling, you'll need to recertify with each carrier annually. Doing so ensures that you stay up to date on Medicare regulations and the yearly shifts in each carrier's offerings.  

What Type of Medicare Product Options Should I Offer?

When you're selling Medicare, you actually have several product options to consider.

Medicare Advantage

Also known as Medicare Part C, this coverage combines and enhances the benefits offered under Original Medicare (Part A and Part B). They can also include drug coverage (Part D). These plans are quite popular, with 42% of Medicare recipients enrolled in one as of 2021. The CMS sets a limit on these commissions each year. For 2022, that's $573 per beneficiary for first-time enrollment and $287 for renewals. Some states, like California, have higher limits.

Medicare Supplement (Medigap)

Another option for Medicare recipients is to stick with Original Medicare and supplement it with Medigap coverage to help cover some of the costs of care. These plans tend to be more expensive for the plan holder but less lucrative than Medicare Advantage for you as an agent. Commissions are based on a percentage of the Medigap premium, rather than flat rates as with Medicare Advantage or prescription drug plans.

Prescription drug plans

You can also sell standalone prescription plans (Medicare Part D) for Medicare recipients who want to purchase this separately. For 2022, these commissions are capped at $87 for first-time enrollment and $44 for each renewal.

Ancillary products

You can also boost your earnings by selling ancillary insurance products designed to fill in gaps in Medicare coverage. This might include long-term care insurance, hospital indemnity, dental plans, or hearing and vision insurance.

Ultimately, your product offerings will be dictated by your territory and sales model. To compete well, you’ll need to choose products that are available, competitive, and tailored to fit your customers’ best interests.  

Where To Get Your Medicare Products

Choosing your product offerings is only the beginning. For each product you plan to sell, you’ll need to make an appointment with that insurance carrier to complete an independent agent agreement or contract.  

Unfortunately, there are very few insurance companies that will offer you a direct contract if you're not a captive or employed agent. That means you'll need to acquire most of your independent agent contracts for selling Medicare through a Medicare Insurance field marketing organization (FMO).  

Working with an FMO generally gives you access to much better contracts and product offerings. These organizations have connections with multiple carriers and can offer you more connections and better commissions than you would earn by trying to work directly with individual carriers. They also often offer assistance with training and certification requirements.

What to look for in an FMO

Choosing an FMO is an important step in the process of preparing to sell Medicare coverage. If you make the right choice, it can drastically improve your chances of success. Look for an FMO that offers:

  1. Fully vested contracts (meaning you own the contract, and your business goes with you if you ever leave the FMO)
  1. Plenty of carrier options
  1. Help with compliance, training, and certification
  1. Additional marketing benefits (such as affinity partnerships and co-ops)

How to Choose Medicare Carriers and Plans to Sell  

Most new agents want to rush in and offer every Medicare Advantage plan from day one. It's an understandable ambition, but it can quickly become overwhelming.  

Narrowing it down  

‌Think about your potential or existing clients' needs. Consider the different scenarios you might encounter — policyholder health statuses, budget issues, coverage preferences, and so on. Aim for a variety of plans so that you can meet these different needs.  

Take the marketability of each product into account as well. Many carriers have minimum product requirements, for example, at least one enrollment per product. Not meeting these criteria may result in termination.  

If possible, start with the largest carriers like Aetna, Cigna, Humana, or United. These firms comprise the bulk of the market share and tend to be easier to sell.  

When you're ready, connect with your regional carriers. Contract with the big ones first and then shift to their smaller counterparts once you have more experience.  

Each carrier may have multiple plans. Here's what to consider when choosing which to offer.  

 

Star ratings  

Know how each of your plans score on Medicare's Five-Star Quality Rating System. These ratings assess how a plan performs in five different areas:  

  • ‌Preventive care  
  • ‌Chronic illness management  
  • ‌Plan responsiveness  
  • ‌Customer service  
  • ‌Member complaints and attrition  

‌Pay particular attention to how the plan ranks for care quality and customer service. These mean the most to your subscribers.  

 

Plan premiums and costs  

Before you offer a plan, identify its premium and how that compares to your clients' price points. Then, compare it to similar plans, especially if you're new to the business and don't have existing clients with real-life budgets.  

Consider the benefits of the plan. Examine how those benefits relate to cost factors like copays and coinsurance, then compare those cost-benefit balances across plans.  

Medicare subscribers don't always consider copays and coinsurance when budgeting for their plans. Develop a way of explaining what the out-of-pocket costs for each plan will be. Calculate different real-life scenarios, such as high-need versus low-need subscribers.  

Every client will have their priorities when it comes to out-of-pocket costs. Therefore, have a wide enough variety in your portfolio so you can serve everyone. That includes not only the high-premium, low-visit-cost crowd but also those who prioritize a low premium over potentially high out-of-pocket expenses.  

Provider network  

If you're planning to transfer your current subscribers from other plans, find out if their providers are in-network. Not having to switch doctors is typically important to older adults.  

Determine the size and diversity of the plan's network so you can advise new clients. Identify what costs a client might incur if they go out of network and ask the carrier if it requires referrals.  

 

Drug formulary  

Your potential clients will probably have questions about prescription drugs, so get the answers in advance. Find out:  

  • ‌What kinds of prescriptions are in the plan's drug formulary

‌Carriers divide their tiers differently; a brand-name drug could be Tier 2 (lower cost) on one plan but Tier 3 (higher cost) on another.  

Survey these factors when choosing a plan to offer and scrutinize them when shopping to meet a specific client's needs. Always know how each potential plan covers a client's medications.  

 

Additional features and benefits  

People consider Medicare Advantage plans in part because they offer certain benefits that Original Medicare doesn't. Aim to offer plans with a range of "extras" like:  

  • ‌Gym memberships and discounts  
  • ‌Transportation to medical appointments  
  • ‌Over-the-counter medications  
  • ‌Meal benefits  

‌Analyze the vision, hearing, and dental benefits and determine how these services contribute to each plan's cost.  

 

Brand names  

Consider the popularity of a brand's name, particularly if you're just getting started. People tend to trust insurers they've heard of. If you're not sure whether a brand is well-known outside of the industry, ask a friend or acquaintance if they know it.  

Ordering Medicare Enrollment Kits from Carriers  

Each carrier has its own Medicare enrollment kit, which includes handouts that policyholders need when they're considering signing up. Different carriers include various materials in their kits, but most contain:  

  • ‌A Medicare Advantage enrollment application  
  • ‌A pre-enrollment checklist, which offers key information about the plan, including doctor networks, copayments, benefits, and coverage area  
  • ‌Up-to-date star ratings for different plan options  
  • ‌A resource guide that shows clients how to access commonly needed services  
  • ‌Low-income subsidy information, including guidelines that tell clients whether they might qualify  
  • ‌County-specific coverage information  

‌When you first sign on with a carrier, order enrollment kits for every area you cover. Each county is different, so you'll need to order multiple enrollment kits for the products you plan to offer. Ask the carrier if there's anything else you need to order for new and prospective clients.  

Examine each enrollment kit when it arrives. Make sure it contains everything you need. If it doesn't, ask the carrier whether they or you can add what's missing.  

 

Learn the ordering process for Medicare supplies  

Some carriers automatically send enrollment kits after you complete your certification. Others don't. As soon as you're certified, find out how a given carrier handles supply ordering. Inquire as to:  

  • ‌When you can purchase Medicare supplies
  • ‌Whether the carrier will send enrollment kits automatically after you certify, and how many
  • ‌Whether the carrier limits how many enrollment kits you can order at once and if there are exceptions
  • ‌What the process is for ordering supplies
  • ‌Whether you can order by phone, email, or online
  • ‌How long it will take to receive your order

‌Every carrier will have different procedures. Consider keeping a written record of how to obtain additional supplies from each one.  

 

Pre-Order enrollment kits when possible  

You'll want to have plenty of enrollment kits available by the time open enrollment starts — usually on October 15. Consumer-facing materials for the coming year typically become available on October 1, when most carriers start shipping kits and supplies.  

Consider pre-ordering your kits so that your requests are at the top of the list when your carriers start distribution. This gives you a better chance of having your materials on hand by early October, so you can hit the ground running when open enrollment begins.  

Many carriers will host a product rollout event either in person or via a webinar before they ship out enrollment kits. Attend these whenever you can. You'll receive helpful information about what might be new or different this year.  

Finally, maintain good relationships with your carrier representatives. Reach out to them and ask about kit shipments and rollouts to stay on their radar.  

How Do I Find Eligible Medicare Prospects?

Finding high-quality leads that are easy to convert is one of the most important aspects of building your Medicare sales business. That's why you must learn as much about how to market your business as you do about selling your products.

To find good leads, be prepared to try many different types of marketing. Remember that with Medicare, you're dealing with an older clientele that may favor more traditional methods. Don't overlook the importance of print advertising, direct mail marketing, and in-person networking for this audience.

That being said, you shouldn't ignore the ways you can reach these prospects through modern-day digital channels. Website, email, and social media are all important ways to connect with eligible Medicare prospects.

One of the most effective ways you can quickly grow your business will be to buy high-quality leads that are sourced specifically for you. More on how that works below.

What Kind of Sales Tools Will I Need?

Once you start connecting with prospects, it's important to make sure you have all the tools you need to make the sale. Here are a few essentials for your Medicare sales business.

E-contracting solutions

In today's world, most contracting transactions are turning digital. You need simple e-contracting software that makes it easy for you to build, send, sign, and execute Medicare contracts with your clients without all the tedious printing and hand-signing of yesterday.

Medicare quoting tools

There's a wide array of software solutions available to make it easy for you to provide clear and accurate Medicare quotes for your clients. Choose one that allows you to offer quotes from several carriers at once, build in discounts, and estimate healthcare costs so they can get a full view of their options.

Customer/lead management system (CMS/LMS)

This is a critical tool for managing your book of business. From the first time you connect with a lead through their entire lifecycle as a customer, you can track and record important information to help you better serve them. Store quotes, contracts, payments, and renewal information. Keep up with birthdays and other important life events. And set reminders to follow up or reconnect on a regular basis.

Your Medicare Enrollment Center

The YourMedicare Enrollment Center combines all of the above to allow you to build quotes, fulfill contracts, and manage all your critical customer information in one place.

 

Help Protect Yourself with E&O Insurance  

As a Medicare insurance sales agent, your role is to help your clients prepare for the unexpected and help protect themselves from financial risks. You might have the best intentions, but sometimes things don't work out as planned.  

If a client thinks you've wronged them in some way, they could try to take you to court. For example, this might happen if a client discovers that a particular service isn't covered and ends up having to pay out-of-pocket or if they identify a potentially better plan you didn't mention.

E&O insurance — i.e., errors and omissions insurance — helps protect you from these lawsuits. It won't stop a client from filing a suit, but it can mitigate or eliminate your court costs and/or settlements.  

Without adequate coverage, these costs can add up to millions of dollars. That's part of why some carriers require you to have E&O before you can sell with them.  

As an insurance agent, you know how important it is to help protect your clients' finances. However, don't underestimate the value of protecting yourself as well.

 

Start Working Toward a Rewarding Career Selling Medicare  

All of these certifications, training requirements, and legal protections can make selling Medicare insurance feel overwhelming at first. But don't let them deter you from reaching your end goal — a rewarding and lucrative career.  

Whether you choose to be an independent insurance agent or work with a team, you can build and maintain a good business selling Medicare Advantage plans. The key is to stick with it and cultivate a long-term client base.  

Here are two ways to go about this.  

 

Independent agents for Assurance  

If you prefer to work for yourself but appreciate strong support, consider working as an independent insurance agent for Assurance.  

 

Seller support  

‌The Assurance platform empowers you to sell insurance whenever, wherever, and however you want. With access to Assurance's User Engagement specialist team to help you sort out any carrier issues you face, you'll never have to figure things out on your own.  

Most of the time, you'll never even need to reach out to carrier reps. Instead, you'll have access to a wide variety of training sessions made available each week to broaden your knowledge of how to sell Medicare.  

Plus, Assurance will assign you a dedicated sales manager. Your sales manager will work closely with you to help you reach your sales goals.  

 

Quality leads  

‌Perhaps most importantly, Assurance relieves you of the pressure to source leads. Instead, Assurance sends you pre-qualified leads. As a result, when you receive calls, you'll be speaking with people who have already expressed interest in finding the right Medicare Advantage coverage.

These leads cost you nothing — you don't have to worry about paying for marketing or other limits on your earning potential. Instead, you can focus entirely on what you do best, and that's selling Medicare insurance.  

 

Earning potential  

You'll also be part of Assurance's lucrative commission structure, which enables you to earn year-round, not just during open enrollment.  

 

Buying Medicare leads through Nectar  

Some independent agents prefer not to work through someone else's platform. If you'd rather opt to be your own boss and possibly run your own firm someday, consider buying Medicare leads directly through Nectar.  

Nectar is ideal for agents who are less enthused about marketing and networking. Maybe you believe these skills aren't your forte, you're currently in the process of ramping up your marketing efforts, or you'd rather not have marketing eat up valuable selling time.  

 

Quality high-intent leads‌

With Nectar, you won't have to gamble with cold leads or stress over having enough leads to get you through a week. As a result, you can cut way down on the amount of time and money you spend on marketing. Nectar does the sourcing for you.

Nectar draws on a variety of marketing methods to identify high-intent Medicare shoppers across several different websites. We then match the right shopper to the right agent based on the shopper's needs and the agent's portfolio. This keeps the shopper's experience personal and direct.  

Every lead you receive through Nectar will be real and fresh. It's the same kind of qualification you'd do on your own, only you don't have to do it all yourself. Instead, you can leave the bulk of the work to Nectar and focus on selling.

Leverage live-call transfers  

If you want to go one step further, Nectar also offers Medicare live-call transfers. This is the exact opposite of cold-calling — leads call you, ready to buy. You tell us when you want to receive calls and what your ideal prospect is like. We get interested shoppers on the phone, verify they're a good fit, and direct their call right to you. All you have to do is make the sale.

 

Start talking to Medicare shoppers today

Nectar offers real-time Medicare leads and Medicare live call transfers— as well as life, auto, and other forms of health insurance. And unlike an employer, Nectar will never take any of your commissions.  

Ready to get your Medicare Advantage portfolio on the fast track? Sign up for Nectar today and start receiving your personalized leads.  

Talk to shoppers today

This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.

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