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The Complete Guide to Selling Medicare Supplement InsuranceInsurance Agent Development
Mar 31, 2022
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7
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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.
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 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.
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.
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.
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.
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 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:
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.
FWA training covers:
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.
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.
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.
When you're selling Medicare, you actually have several product options to consider.
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.
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.
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.
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.
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.
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:
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.
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.
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:
Pay particular attention to how the plan ranks for care quality and customer service. These mean the most to your subscribers.
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.
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.
Your potential clients will probably have questions about prescription drugs, so get the answers in advance. Find out:
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.
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:
Analyze the vision, hearing, and dental benefits and determine how these services contribute to each plan's cost.
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.
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:
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.
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:
Every carrier will have different procedures. Consider keeping a written record of how to obtain additional supplies from each one.
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.
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.
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.
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.
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.
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.
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.
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.
If you prefer to work for yourself but appreciate strong support, consider working as an independent insurance agent for Assurance.
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.
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.
You'll also be part of Assurance's lucrative commission structure, which enables you to earn year-round, not just during open enrollment.
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.
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.
Nectar offers real-time Medicare leads — as well as life and 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.
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.