Have you considered a High-Deductible Medicare Supplement Plan F?

Presented by Tim Dreher

Do your healthy senior clients ever express to you their frustration about paying high monthly premiums for their Medicare Supplement policies and then rarely using them? Are they tired of getting “the letter” every year from their insurance company announcing yet another round of rate increases?

There is an alternative that you and your clients might want to consider. Maybe you should be talking to those clients about switching to a High-Deductible Medicare Supplement Plan F.

If your clients are willing to pay out of pocket for certain health care costs then maybe a high-deductible plan is the answer for them. A high-deductible Medigap plan can help your clients save on premium costs while still getting dependable coverage for their healthcare needs. Premiums for a high-deductible Medicare Supplement Plan F typically run about one third to one fourth of what you would normally pay for a regular Medicare Supplement Plan F. Like any other Medicare Supplement policy, high-deductible plans still have the largest nationwide network of doctors and hospitals because they have the same network as original Medicare.

Let’s take a look at how these plans work. A high-deductible Medicare Supplement Plan F pays the same benefits as a regular Medicare Supplement Plan F but only after the policyholder has satisfied a calendar year deductible. For 2016 that deductible amount is $2,180. In other words, the deductible amount represents the annual out-of-pocket expenses that the policyholder must pay before the plan starts paying benefits.

Out-of-pocket expenses attributed to this deductible are those Medicare approved expenses that would ordinarily be paid by the policy. It is important to remember that the deductible is only applied to the Medicare Supplement portion. Medicare will still pay approximately 80% of any approved service and the Medicare beneficiary is responsible for the remaining 20%, which is then picked up by the Medicare Supplement policy.

For example, one of your Medicare eligible clients has a medical procedure that costs $5,000. Typically, Medicare would cover $4,000 of the bill and the individual’s Medicare Supplement policy would pick up the remaining $1,000. If your client owned a high-deductible plan then he or she would pay the $1,000 out of pocket that would be applied toward the deductible. Once the deductible is met the Plan would pay the same as a regular Plan F.

I would imagine that many of your senior clients would be open to the ideas of a high-deductible plan since most are used to paying higher deductibles with their pre-age 65 health plans.

A high-deductible Plan F is certainly not for everyone. But for those healthy clients of yours that like the idea of paying a much lower premium and are comfortable knowing that the trade-off would be paying some expenses out-of pocket before the plan begins paying, the High-Deductible Medicare Supplement Plan F might be a great fit.

Medicare Supplement plans – enhancing your bottom line

Presented by Leonard Berthelsen

As an industry, we have been talking about the impact that the baby boom generation was going to have as these folks become Medicare eligible, and well, it is upon us. Despite being well-versed in Medicare and the options available, there is still a tinge of anxiety that comes up when I start to think about it. Do I stay on my current health coverage after reaching Medicare eligibility, or do I go on Medicare Part A &B? Which way is going to give me the best coverage at the best price? If I delay going on Medicare will there be a penalty?

WOW, it can be mind boggling and I’m in the insurance business! Think about a consumer and how confusing it can be for them when looking at all the options. They have many decisions to make and are they making the right one? Medicare, Medicare Supplements, Medicare Advantage, Prescription Drug Plan and Supplemental Health coverage can weigh heavily on the minds of consumers. And, that is just on the surface, as each one of those has multiple options within itself. I’m getting clammy hands as I write this.

Let’s look just at Medicare supplement coverage and what that can add to your bottom line. Someone turning 65 and in their open enrollment period becomes eligible for Medicare and can purchase a Supplemental plan without evidence of insurability. No medical underwriting, just age, gender, build, and if they are a tobacco user, are generally all the underwriting that takes place. It’s a fairly simple process. As a trusted advisor, your real value comes into play in navigating which carrier is going to meet their expectations and determining which plan with that carrier is the right choice.

There are some reports coming out that suggest there are not enough advisors working in this market causing many consumers to make decisions about their health care on their own. Some are making the right decisions while others are merely guessing and hoping that they got it right. Do you think you could become that advisor that has the expertise to navigate the market and make Medicare supplemental plans an important part of your insurance practice?

Most Medicare supplemental plans offered today have level commissions for the first five to six years. Every time a client renews their coverage, the renewal is paid to the advisor. If an advisor wrote five supplemental plans a month, he/she could add $15,000 to their bottom line. When the clients renew their coverage, that $15,000 is earned again plus the additional commission for the five new monthly plans for the new year. This means that by the end of year two, the advisor has added a nice $30,000+ to their bottom line. Continue that same thought process out to the end of year five and now you have some real dollars to consider. This could boost your annual income by $75,000 – $100,000 by the end of the fifth year. That is not counting any LTC, hybrid LTC, life Insurance, annuity or supplemental products that may get placed along with the supplemental plan.

Becoming the “go to” advisor for Medicare supplemental coverage might just put your career on a different plateau.

Does Open Enrollment with Medicare Mean the Same Thing from one Broker to the Next?

Presented by Leonard Berthelsen

The answer is, probably not!  We field calls frequently from brokers and agents that don’t work the Medicare market often and we are asked, “When does open enrollment start for Medicare Supplement coverage? 

There has been a fair amount of attention and publicity surrounding Medicare Advantage plans and the open enrollment period each year.  Unfortunately it is called Medicare open enrollment; this of course applies to the Medicare Advantage plans and not Medicare Supplement coverage. 

Medicare Advantage open enrollment starts October 15 and ends December 7, Pearl Harbor Day. The changes or enrollment a person makes during open enrollment takes effect January 1st of the following year.  A person turning 65 during the year can also elect a Medicare Advantage plan outside of the specified open enrollment period as they age into Medicare.

There is no specified date range or time for an “open enrollment” with Medicare Supplement coverage.  Now before readers send comments in stating that yes there is an open enrollment with supplements, let me be a little more specific.  A person turning age 65 and aging into Medicare technically has an “open enrollment” or “guaranteed issue” time frame in which to select a Medicare Supplement carrier without evidence of insurability.  That of course, centers around their birthdate.  This happens all year long with all folks aging into Medicare and wanting to secure a Medicare Supplement.

A person losing coverage at work that is 65 or older, retiring or having an employer drop their medical insurance, as well as a carrier failing, all have a right to supplemental coverage from a private insurer without proving insurability under Medicare provisions.  This of course is with them providing a creditable coverage certificate to both the insurer and Medicare.

Many Medicare Supplement carriers send out advertising and make announcements that they are not affected by open enrollment right about the time open enrollment with Medicare Advantage is about to begin.  There is quite a bit of confusion surrounding this, and we just wanted to bring a little clarity to the matter.

Remember, a person can purchase a Medicare Supplement policy any time during the year provided they meet the eligibility requirements either by age, life event or they can medically qualify.  Medicare Advantage plans have a specific time each year that a person can move into, out of, or change a Medicare Advantage plan.  Aging into a Medicare Advantage plan can happen at any time during the year at the time they reach age 65.

Hopefully, now you know the difference and it helps you and your clients understand what those differences are.