Recently, another friend asked me about how to generate leads for insurance sales. I thought a moment, then said: you know, more than 3 million Americans will be turning 65 in 2018. That’s a lot of opportunity for selling Medicare supplement insurance.
That figure was on my mind, as we’re nearing another new year, a fresh start for insurance agents and their businesses and a big change for many Americans who will be entering retirement. Many of them will need additional coverage in order to fully manage their health care needs in their golden years.
Agents experienced with Medicare supplement products know this is a great area of business to get into. Not only do you get to help seniors plan for the future, it’s also a great way to grow your business. For the inexperienced, Medicare can sometimes be daunting. It’s a highly regulated area and unlike many other insurance products. In this post, I’ll guide you through the basics, and how to make this one of your favorite areas of business.
The Medicare Learning Curve
Medicare paid out its first benefits to seniors in 1965. Fifty years of legislation has made this program very complicated. There’s a steep learning curve for both beneficiaries and agents, and many experts admit they still don’t know everything. However, if you can get a good handle on it, you will be seen as a godsend by your clients.
To become the authority that will win you clients, study up. The Medicare.gov website is the go-to source on the law and program benefits. The AARP has also authored a nice guide geared toward beneficiaries.
The A to Z of Medicare
For the uninitiated, here’s a quick recap of the current state of the Medicare program. This government-run health insurance program is available primarily to Americans aged 65 and older, as well as certain other folks with specific disabilities or diseases.
When seniors become eligible for Medicare, they are first presented with two options. They can opt for the “original Medicare” — now further divided into Medicare Part A and Medicare Part B — or they opt for a Medicare Advantage plan (also called Medicare Part C). Then, there’s Medicare Part D. Confused yet? Most seniors are by this point. Let me break this down.
If a client chooses this route, they will sign up for Medicare Part A. It’s provided free of charge to seniors who paid Medicare taxes during their working years. Part A covers inpatient care and some nursing facility expenses.
Seniors who enroll in Part A will also enroll in Part B. Beneficiaries will pay a monthly premium for Part B, not unlike other kinds of insurance. The rates are regulated by the government and generally increase from year to year. For 2017, the standard premium was set at $134 per month. High earners will have a higher premium, up to $428.60 for 2017. Part B covers what Part A doesn’t, namely outpatient care, preventative services, and healthcare provider service fees.
For seniors who want another option, there’s Medicare Part C (Medicare Advantage). This plan is run by a private insurer, much like the typical PPO or HMO plan. Note: when a senior chooses a Part C plan, they cannot also sign up for a Medicare supplement plan. However, it’s possible for Part C beneficiaries to move to an original Medicare plan and then apply for supplement coverage.
Medicare Part D
Part D coverage provides drug coverage benefits for Medicare beneficiaries. This is a separate plan that seniors will purchase if they have Part A and Part B coverage. Many but not all Medicare Advantage beneficiary plans will include Part D as a part of that coverage.
The U.S. Market for Medicare Leads
When you’re fully educated about the Medicare program itself, you’ll need to get comfortable with the sales market. Medicare supplement coverage is regulated at the state level, and so this means insurance agents often target leads within a particular state or a few states.
Now there are several strategies of how best to do this. You may prefer to target leads within a particular region, such as your own, which may give you an advantage with discerning seniors looking for a local connection. However, it’s also possible to target other states for other reasons. Many agents look to states with the right mix of aging demographics and higher population. This can set you up for a large lead pool of prospective clients.
Like other insurance products, agents need to be properly certified to sell Medicare supplement plans. This is a fairly easy process for supplement agents working in most states, where a state health insurance license will suffice for you to begin calling leads. North Carolina is a bit more work, in that you’ll need to obtain a separate Medicare supplement certification license. For more information on a particular state’s laws, visit the National Insurance Producer Registry.
The Best Time to Call Leads
Sales pipeline management will play an important role in your Medicare supplement business. While millions of Americans will be turning 65 in 2018, they won’t all be eligible to enroll on January 1. However, that’s not to say it’s not a good time to start bringing up enrollment with your leads. There are a couple of reasons for this.
A six-month open enrollment window for supplement coverage begins when a 65-or-older senior enrolls in Medicare Part B. During this open enrollment period is the best time for seniors to buy supplement coverage — policies are guaranteed issue and policies are not subject to underwriting, meaning applicants won’t be hit with higher premiums for preexisting conditions.
After Open Enrollment
Seniors will still be able to apply for Medicare supplement coverage after this six-month window, however, it could mean they will pay a higher premium for coverage, or if they have serious medical issues, they could be turned down for coverage. Thus, for seniors looking for affordable and reliable benefits, earlier is better.
There’s one notable loophole to these rules, and that is for folks who are on Part C (a Medicare Advantage plan), or their own private health plan, and decide to switch to Part A and Part B. In this case, these seniors could be approved for a guaranteed-issue supplement policy after their enrollment window has passed.
Because of the generally limited enrollment window, it’s a good idea to begin targeting your supplement leads early. Start with those folks who haven’t turned 65 yet but will during the year. They’ll need to begin thinking about what kind of Medicare coverage they need, and many will be grateful if they can talk to a knowledgeable and professional agent about their questions and concerns.
Medicare supplement clients offer a new opportunity for your business. By forming a relationship now, you could have them as clients for years to come. But a word of caution: do read up on the insurance laws in your area. Generally, agents aren’t allowed ask for payment over the phone, pitch an annuity or other life insurance product during Medicare plan call or meeting, or offer gifts worth more than $15. Other restrictions may apply.
Medicare supplement leads are one of my favorite lines of business. Seniors need help navigating these complicated health insurance issues and today’s agents are in a great position to help. As a large population of Baby Boomers ages into retirement over the next decade, this will continue to be an important part of the insurance marketplace.
If you’re an agent looking for a great opportunity in 2018, I highly recommend Medicare supplement insurance. If you have a knack for helping your other insurance clients find just the right policy, I think you’ll like and excel in this line of business.
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