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If there is one constant in the health insurance world, it's that coverage gaps always exist. As an insurance agent, these gaps present you with an opportunity to help clients fill them.
This is especially true with Medicare, where many clients will need Medicare Supplement (also known as Medigap) plans to fill out their coverage. Medicare Supplement plans are a value-add for your clients, providing coverage for healthcare costs not covered in Original Medicare plans. As the name implies, it fills a coverage gap many seniors have.
According to the National Association of Insurance Commissioners (NAIC), nearly 14 million people enroll in Medicare Supplement plans annually. In addition, as the population of the United States continues to get older, the number of folks likely to seek Medicare Supplement plans increases. By 2050, the number of Americans over the age of 65 will grow by nearly 90 million, nearly twice what it is today. All these individuals are potential buyers of Medicare Supplement insurance.
Medicare Supplement plans are something individuals buy in addition to their Original Medicare coverage. It is a form of private health insurance on top of Medicare to provide coverage Part A and Part plans don't.
Medicare Part A and Part B both provide a base level of coverage, but there are gaps. Seniors looking for a more complete health insurance package purchase Medicare Supplement plans as an add-on to what Medicare provides. Examples of costs Medicare Supplement insurance covers include:
There are a lot of unknowns in health, especially later in life. No one can predict the costs if they end up needing hospital services, additional doctor’s visits, medical equipment, and more. Many of these costs are out-of-pocket additions beyond what Medicare covers, and Medigap plans help seniors avoid these unpredictable expenses.
It's important to understand that Medicare Supplement policies are not a replacement for Original Medicare. Instead, think of Medicare Supplement insurance as a type of umbrella insurance policy.
Clients should still have their Medicare Part A or Part B in place for basic coverage. In the event they have a hospital visit or need medical care, Medicare serves as their primary insurance policy. Medicare Supplement insurance, when in place, serves as additional or secondary insurance that will cover excess costs.
Medicare Supplement plans and Medicare Part D prescription drug plans are handled separately. They do not work together. When you are working with clients, you must determine if they have a Medicare Part D prescription drug plan. If they do, they cannot also have prescription drug coverage on their Medigap policy. Likewise, if they have prescription drug coverage via Medigap, they can't also hold a Part D policy.
Medicare Advantage coverage is a comprehensive plan that goes above and beyond what you get with traditional Medicare. Also known as Medicare Part C, it combines the other Medicare plans into an all-in-one package. Medicare Advantage plans may also include vision, hearing, as well as dental benefits.
As an insurance agent, it's important to understand Medicare Advantage as it's yet another product in your toolbox to meet a client's needs. If your client does go with a Medicare Advantage plan, you won't combine it with a Medicare Supplement. Medicare Advantage is a standalone insurance product worth researching to understand where it may benefit your client base as an additional option.
Requirements for Medicare Supplement plans aren't complex. To qualify for a Medicare Supplement plan, someone must be age 65 or older. They also need to enroll in traditional Medicare. If they meet both of these criteria, they're eligible for a Medicare Supplement plan.
Exceptions may apply to those with certain pre-existing health conditions. Due to a disability, they may qualify for traditional Medicare plans before age 65. This would also make them eligible for Medicare Supplement plans.
Medicare Supplement insurance is a great business opportunity for all insurance agents. The truth is most folks over the age of 65 will need Medicare Supplement insurance. Whether you're new to the business or established in selling several other types of coverage, Medicare Supplement plans can make a great addition to your sales book.
The first step to selling Medicare Supplement insurance is to obtain a license. You need to acquire a Medicare license in the state you plan to do business. If you live in Florida but plan to sell insurance to clients in Massachusetts, for instance, you need a license from the Massachusetts Department of Insurance. Be sure to check each state’s individual department of insurance for licensing requirements.
You also want to look into obtaining an AHIP certification. This certification is a requirement and evidence that you completed each training course to comply with Centers for Medicare and Medicaid Services (CMS) regulations related to sales of Medicare Advantage plans. You will have clients that want Medicare Supplement insurance, while others may opt for Medicare Advantage. Getting AHIP certified will put you in the position to sell them either option.
Clients have a lot of options when it comes to Medicare Supplement plans. There are 10 different Medicare Supplement plans (Plans A through N) you can offer to clients. Some will help eat away at deductibles, while others will target co-insurance and co-payments. Each has different positives and negatives, along with premium variations. It's important to understand the options so you can make the best proposals for your clients.
Medicare Supplement plans are the same across insurance agents. What you offer to a client will be the same set of plans another agent offers. So how can you set yourself apart? What are your differentiating factors? The two factors you do have control over include underwriting the policy and the premium you offer.
Each underwriter will look at a client differently, with risk appetites varying across insurance companies. That risk appetite will translate to what you'll offer your client in terms of premium for the policy. With these two factors, you can differentiate your package to a client from other insurance agents.
Without generating leads, you have no one to sell Medicare Supplement insurance to. Whether it is through purchasing leads from a provider or obtaining more organic leads via social media and networking, it's important to build your base of prospects. Don't stick to one path; use a combination of purchasing leads and building a network of organic leads who will be interested in purchasing Medigap plans from you.
There is a reason why Medicare Supplement plans are so popular. For instance, many Medigap plans cover 20% of out-of-pocket medical costs that Original Medicare doesn't. In addition, Medicare Supplements have no networks restricting where clients can get care. Finally, there are plenty of options for coverage with the wide range of Medicare Supplement plans. Build a presentation for your clients that highlights these benefits.
What are some of the tips and tricks to get things off the ground selling Medicare Supplement insurance? To be successful, try the following:
By the time we get to the year 2030, 20% of the American population will be of age 65 and older. This means 20% of our population will be eligible for Medicare and potentially shopping for Medicare Supplement plans. Are you ready to tap into this market?
Medicare Supplement insurance is a great opportunity for any insurance agent, no matter the stage in their career. If you understand the product, you can make waves in short order by building a network of reliable long-term clients.
Wondering how you can start building that network when you're ready to start selling Medigap plans? Nectar's lead generation software enables you to connect with warm Medicare leads looking to purchase Medigap. Our leads are real-time, targeted to you, and increase your odds of closing a sale. Reach out today to learn more about how Nectar can help you take the next step in your Medicare sales journey.
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.