Why Sell Medicare?
As an insurance agent, you need a residual income base to create a career with long-term sustainability. Medicare can be that residual income.
You can build a 6 figure income by steadily selling Medicare for as little as 3-4 years. Having this residual income can give you the flexibility to stretch your capabilities and start learning how to cross-sell other products and round out your book of business. Having a steady monthly income will make this process a lot easier.
Let’s dive in and get to the meat of it all.
Medicare Sales Training
If you have no already, you need to become an expert on Medicare – all parts. This will help you better become a true advocate for your clients – rather than someone who is just trying to make a sale. This way, you can help a lot of people while making great money.
The best way to start learning about Medicare is the Medicare and You 2021 Handbook (click to download directly from Medicare). You can also get a copy from your local Social Security office. Every year, CMS (The Centers for Medicare and Medicaid Services) releases an updated version. The best way to get everything down is to read it cover to cover, then reread it. This book is an excellent training resource for agents.
First, we will start an overview of Original Medicare and what it covers as a refresher.
Original Medicare includes Medicare Part A & B. This is provided directly from Medicare itself and covers 80% of costs once deductibles and coinsurance are met. The remaining 20% is where many choose to fill in with Medicare Supplement plans.
Medicare Part A
Medicare Part A covers hospital-related expenses. As long as a client paid a minimum of 10 years into Social Security through payroll, you will not have a premium. In the event they did not, Medicare Part A can be purchased. However, the premium can be costly, costing as much as $413 monthly.
Some things included in Medicare Part A are:
- Home health
- Inpatient care
- Skilled nursing facilities
There is a high financial risk that can result from some of the gaps in coverage that Medicare Part A leaves behind; this is why you can often cross-sell these clients’ ancillary insurance.
Medicare Part B
Medicare Part B covers medical expenses such as:
- Doctor’s visits
- Ambulance services
- Ambulatory surgical centers
- Bone density tests
- Breast cancer screenings
- Cardiac rehabilitation
- Cardiovascualr disease
- Cervical screenings
- Diabetes screenings
- Chronic care management
- Colorectal cancer screenings
Once eligible, clients have a seven-month IEP (initial enrollment period) that lasts from 3 months before they turn 65 to 3 months after they turn 65.
In most cases, Part B has a monthly premium that can range from $134 to $428.60. The price is based on the client’s income. If they, for some reason, do not enroll on time, they can be subject to a late penalty of 10% for every 12 months that they delay enrollment. However, this can be waived when the client still has credible coverage (such as that through an employer or union).
The annual deductible for Medicare Part B is $183 and must be met before Medicare will start paying anything. After completing the deductible, the client is only responsible for 20% of any Medicare-approved amount.
As an agent, it is your job to discuss the Medicare basics with your clients and ensure that they understand what is going on – and help them find the best coverage. If you provide them with genuine and valuable help, they will send referrals your way! Referrals are the best leads.
What isn’t covered by Original Medicare?
Original Medicare is not all-inclusive – so clients need to understand what services will fall through the gaps and result in out-of-pocket expenses. Here are some things not covered by Medicare:
- Hearing aids
- Eyeglasses or vision screenings other than cataract surgery
- Long term care
- Preventative dental care
- Silver Sneakers
Ensure your client understands the gaps in their coverage so that they are not surprised when they do not have coverage for these services. Most of the time, you can cross-sell clients a product that will help them get these services covered. Stay up to date on cross-selling rules to ensure you are always compliant.
Medicare Part D
Medicare Part D is prescription drug coverage, and it does have a monthly premium. If they do not enroll, a client will have a late penalty added to their premium from that point forward (unless they previously had credible coverage).
Plan D plans follow the AEP (annual election period) and can be changed each year from 10/15 to 12/7 – it is essential to review these plans with clients annually. Tiers and copays can change year to year, and you want to make sure that your clients’ prescriptions stay covered.
Medicare Part C is most often referred to as Medicare Advantage (MA plans). Offered as HMO or PPO plans, private insurance companies have offered these plans and have been approved by Medicare. Clients who choose to enroll in a Medicare Advantage plan are subject to using the doctors listed in their associated PPO (no required referrals) or HMO (referrals needed) network.
These plans are also sold during the AEP, and some are sold during the OEP (open enrollment period) from 1/1 to 3/31 every year. There are other scenarios where you can sell MA plans outside of AEP, and you can find those within the Medicare and You handbook – this holds a lot of important detail.
If a client is enrolled in a Medicare Advantage plan, they are still enrolled in Original Medicare. However, the Medicare Advantage carrier becomes the primary payor instead of Original Medicare and takes liability in covering the Part A & Part B covered services. This helps Medicare cut spending and transfer liability to private companies. Sometimes, this is why you see added benefits in Medicare Advantage plans such as dental, vision, hearing, and wellness. Keeping clients healthy helps carriers keep an excellent loss ratio.
Why do some clients choose Medicare Advantage?
- It covers Original Medicare deductibles
- Little to no premiums
- Additional services like hearing aids, wellness discounts, and limited dental work
- Some plans include drug coverage, reducing out of pocket premium costs
Enrolling in a Medicare Advantage plan is one-way clients can limit their risk to the 20% left uncovered by Original Medicare.
How does Medicare work with other insurance?
Sometimes, clients will have other insurance policies at the time they become ready to enroll in Medicare. It is essential to talk with them about which coverage is primary and what that means for them.
When Medicare is primary:
- The client is using a retirement health plan
- The client is over 65, still working, and on a group plan where there are less than 20 employees
- Disabled and under 65, still working, and on an employee health plan with an employer with less than 100 employees
When you are having that discussion, ask these questions:
- How old are you?
- Are you working or retired?
- If you are currently working, how many employees does your company have?
These questions will help you to determine if Medicare is going to be the primary coverage.
If you want to sell Medicare Advantage plans and/or Medicare Part D plans, you must complete AHIP training. AHIP training is a great resource to help you get a more robust understanding of the Medicare market, covering:
- Medicare basics
- Different types of Medicare Part D plans
- Part D enrollment requirements
- Understanding fraud waste and abuse
- Eligibility and coverage details
How do Medicare Supplements work?
Private insurance carriers sell Medicare Supplement plans to cover the 20% and deductibles left by Original Medicare. Typically, a Medicare Supplement client has Original Medicare + Medicare Supplement + Medicare Part D.
Your client will pay premiums for a Medicare Supplement, as well as Medicare Part D along with Original Medicare. On the plus side, Medicare Supplements are covered by any doctor who takes Medicare – so there are not network constraints. This is notable for clients who travel frequently, so there are no problems accessing coverage. Medicare Supplements are standardized across all carriers. Click to download our free Medicare Supplement comparison chart.
How to qualify for a Medicare Supplement?
- Have Medicare Parts A & B
- Cannot have a Medicare Medical Savings Account (MSA) Plan
- Cannot be enrolled in an MA plan or must leave it before the Medicare Supplement plan is effective
What is not covered by Medicare Supplements?
- Long term care
- Private duty nursing
How do clients start using their Medicare Supplement plan?
When they go to the doctor, they will most likely have to complete the appointment and go home. In some cases, even without a copay. Later, they will receive an explanation of benefits that outlines the services, and the amount due will show as zero. This provides great peace of mind for many seniors living on a fixed income.
To get started selling today, contact Agent Pipeline to get contracted with some of the best carriers in the nation, and have a wide array of products to help fulfill your clients’ needs.