It’s been estimated that by 2040 there will be about 82.3 million senior citizens in the U.S. Baby Boomers are aging, and many of them will soon come to the conclusion that they need a Medicare Supplement health care plan. Medicare doesn’t cover everything. If you’re an agent, there’s never been a better time to get started selling Medicare supplements. First, however, you need to learn about Medicare and how it works.
In order to be a true advocate to consumers, you need to understand how Medicare works in order to see how a Medicare Supplement works. If you’re just out to make a quick sale, this isn’t the job for you. However, if you want to help seniors and are willing to spend the time it takes to learn the ins and outs of Medicare, you can make some money and do good.
All you need to do to become completely versed in Medicare is to go over the Medicare and You 2019 Handbook, which you can download for free here. Ideally, you’ll learn all there is to know in this guide and you’ll review the new guide each year to make sure you’re up-to-date on any changes. The following are things you need to understand in order to sell Medigap or Medicare Supplement Insurance.
1.Original Medicare / Medicare Part A
Original Medicare is divided into two sections: Part A and Part B. Parts A & B cover 80% of costs after deductibles and coinsurance. The remaining 20% is an out-of-pocket expense, which is what supplemental coverage would pay for. Medicare Part A is earned, but it can also be bought for those who need it. In 2019, it cost up to $413 a month to buy Medicare Part A. Gaps in Medicare Part A can easily cost thousands of dollars. Included in Medicare Part A: home health services, hospice care, inpatient hospital care, nursing facility care and more. Supplemental coverage can cover these gaps left after Medicare covers your client.
2. Medicare Part B
Medicare Part B covers some of the most essential types of medical expenses. A client begins the initial enrollment period 3 months before the month in which they turn 65 and ends 3 months after the birthday. Medicare Part B covers doctor’s visits, ambulance services, blood tests, breast cancer screenings, diabetes screenings, cardiac rehabilitation and other similar services. Part B has a premium and that premium is usually deducted from a client’s Social Security payment each month. Part B premiums costs $134-$428.60 per month.
If your client doesn’t elect Plan B on time, there’s usually a late enrollment penalty of 10% for ever full 12 months they delay enrollment. This penalty can be waived if your client has coverage with an employer.
The Medicare Part B deductible was $183 in 2017. Your client will pay that much out-of-pocket before Medicare begins to cover services. After coverage beings, the client is responsible for 20% of doctor visits and other approved Medicare services. Medicare supplement plans would cover these costs.
3. What Is Medicare Part C (Medicare Advantage)?
Medicare Part C is probably better known as Medicare Advantage and is available as an HMO and PPO from insurance companies approved by Medicare. Some popular plans: Aena, United Health Care, Humana, Cigna and Anthem and more.
To be eligible for a Medicare Advantage plan, your client must first sign up for Medicare Part A and Part B. Medicare Advantage can cover routine dental, vision and hearing services. Sometimes, it covers prescription drugs. Medicare Advantage plans are offered in the form of an HMO, PPO, PFFS, MSA and SNP.
Clients with end-stage renal disease (ESRD) are not eligible for Medicare Advantage.
Medicare Advantage and Medicare Supplement plans are not the same thing. You must explain the differences to your clients.
4. Medicare Part D
Medicare Part D covers prescription drugs and has a monthly premium. Like Medicare Part B, there is a penalty for late enrollment unless your client has an existing health insurance plan. Your client may have several Part D plans offered. You can review copays and deductibles in their Medicare and You Handbook. Medicare supplements would cover copays.
5. When Is Medicare the Primary Coverage for a Client?
If your client is using a retirement health plan, Medicare may be their primary coverage. If the client is 65 and older and is still working and on a group health plan with fewer than 20 employees, they are eligible for Medicare. Also, if your client is disabled, under the age of 65 and on an employer-funded health plan with fewer than 100 employees, he/she may use Medicare as the primary coverage.
To determine if Medicare can be your client’s primary coverage, it’s important for you to ask your client about their age. Also, ask if they are working or retired. If they are still working, ask how many employees the company employs.
6. What Does a Medicare Supplement Insurance Policy Cover?
The 20% gap in Medicare Part A is covered and so is the 20% gap in Medicare B. Medicare supplements also cover health & wellness benefits which Medicare doesn’t cover at all. A client must have Medicare Part A and Part B to enroll in a supplement plan. Dental, vision, hearing and wellness services would be covered by Medicare Supplement. Medicare Supplements also cover the deductibles for Part A and Part B. There are very low or even no premiums for Medicare Advantage. Some plans include prescription drugs too.
7. When Are Medicare Supplements Accepted?
In most cases, if a doctor accepts Medicare, they will accept Medicare Supplements. Unlike HMOs and PPOs, your client can use Medicare Supplements anywhere and with any doctor out of network, so it’s a great option for clients who travel often.
8. What Are the Differences Between Medicare Supplement Plans?
The basic differences in all the Medicare supplement coverages is price and underwriting. Basically, each company asks a set of questions. If your client doesn’t pass those health questions, you can contact the other health insurance companies. Each company has a unique set of questions. However, all the plans are the same across the board (Plan E with one company is the same Plan E that another company offers, even if it costs more.).
9. What Doesn’t a Medicare Supplement Plan Not Cover?
Private nurses, vision, dental and hearing. Long-term care is also not covered by a supplement plan.
10. Can My Client have a Medicare Advantage Plan and Medical Supplement Insurance (Medigap)?
No, but the client can apply for Medigap while they have Medicare Advantage but must leave the Advantage plan before Medigap becomes effective.
11. What Should I Know About Medicare Supplement Open Enrollment?
You’ll want your client insured during the open enrollment period because this is the only time they don’t have to worry about pre-existing conditions. Underwriting is much simpler. It’s only if your client misses this open enrollment period that they will have to pass health questions.
12. What Should I Know About Switching from One Supplemental Coverage to the Next?
This is a great question because often, there’s a big price discrepancy in coverage from one company to the next without one company having any difference in coverage (remember that Plan F is Plan F across the board). You’ll want to save your client some money but you won’t be able to if they don’t pass the health questions offered by the company with the lower rate.