South Dakota’s Medicare sales market offers a unique opportunity for insurance agents and independent insurance agents looking to focus on Medicare Supplement plans. While Medicare Advantage enrollment has steadily increased across the country—reaching 54% of eligible Medicare beneficiaries in 2024, South Dakota remains a stronghold for traditional Medicare and Medigap plans.
With lower-than-average Medicare Advantage penetration, South Dakota presents a compelling market for insurance agencies that want to build their Medicare business by offering Medicare Supplement plans.
However, selling Medicare products successfully in this state requires more than just offering policies—it demands in-depth knowledge of Medicare Advantage plans and Medigap differences and a strategic sales approach. Partnering with an FMO, general agency, or brokerage can help insurance agents maximize their Medicare sales potential and grow their book of business effectively.
South Dakota’s Medicare Market: A Stronghold for Medigap
According to KFF’s latest Medicare enrollment data, South Dakota is one of the least penetrated states for Medicare Advantage plans. Unlike states such as Florida or California—where over 60% of Medicare beneficiaries are enrolled in Medicare Advantage—South Dakota continues to favor traditional Medicare and Medicare Supplement plans.
Several key factors contribute to this trend:
Rural Healthcare Access & Network Limitations
In rural states like South Dakota, Medicare Advantage plans often struggle with network limitations, as hospitals and providers may not fully participate in MA plans. Medicare Supplement plans, however, allow beneficiaries to visit any provider that accepts Medicare nationwide, making them a preferred option in areas with fewer healthcare facilities.
Limited Medicare Advantage Plan Selection
While the typical Medicare beneficiary nationwide can choose from 43 different Medicare Advantage plans, South Dakota has significantly fewer choices. Many counties offer little to no Medicare Advantage competition, making Medicare Supplement plans the go-to choice for comprehensive healthcare coverage.
Financial Stability & Predictability
Although Medicare Advantage plans include out-of-pocket maximums, Medicare Supplement plans provide predictable costs. For South Dakota’s aging population, the ability to budget for healthcare expenses without surprise copays or network restrictions is a major selling point.
The Challenge: Educating Consumers on Medicare Plan Options
Many licensed insurance agents in South Dakota find that Medicare beneficiaries don’t fully understand the differences between Medicare Advantage and Medigap.
With aggressive marketing for $0 premium Medicare Advantage plans, some consumers assume these plans are the most cost-effective option—only to later realize that network limitations and cost-sharing expenses can impact their access to healthcare.
This is why insurance agencies and insurance agents should focus on educational marketing materials, social media campaigns, and webinars to help consumers make informed Medicare decisions.
How South Dakota’s Health Systems Affect Medicare Enrollment
South Dakota’s healthcare system plays a crucial role in shaping Medicare plan choices. Unlike densely populated states where hospital networks are more willing to contract with Medicare Advantage insurance carriers, South Dakota’s hospitals and providers have more limited MA health plan participation.
Major Health Systems in South Dakota
- Avera Health (Sioux Falls, Aberdeen, Yankton): One of the largest healthcare systems in the state, providing extensive medical services. However, not all Medicare Advantage plans include Avera providers in-network, leading many beneficiaries to choose Medicare Supplement plans.
- Sanford Health (Sioux Falls, Brookings, Watertown): A major hospital and clinic network that serves a broad region, yet Medicare Advantage acceptance varies, making Medigap a safer alternative for many beneficiaries.
- Monument Health (Rapid City, Custer, Spearfish): A critical access healthcare provider serving western South Dakota. With limited Medicare Advantage plan participation, Medicare Supplement plans offer greater flexibility and provider access.
- Regional Health (Various locations across the state): A key healthcare system in South Dakota, where Medicare Supplement plans provide more stable access to care than Medicare Advantage plans.
How South Dakota’s Health Systems Impact Medicare Choices
- Medicare Advantage Plans Have Network Constraints: Since many of South Dakota’s hospitals and providers don’t contract with all Medicare Advantage carriers, enrollees may face challenges accessing care.
- Medicare Supplement Plans Provide Greater Freedom: Beneficiaries with Medigap plans can visit any provider nationwide that accepts Medicare, making them especially valuable in rural areas.
- Providers May Favor Traditional Medicare: Due to reimbursement challenges and administrative burdens, some healthcare systems prefer traditional Medicare and Medigap over Medicare Advantage.
For insurance agencies, understanding which hospitals and providers accept which Medicare plans is key to helping clients make the best decision. This is where a knowledgeable FMO, general agency, or brokerage can offer essential support.
How an FMO Can Help You Expand Your Medicare Business in South Dakota
For insurance agencies aiming to grow their Medicare Supplement sales in South Dakota, partnering with a field marketing organization that understands the state’s unique Medicare market is a game-changer.
A strong FMO partnership provides:
- Market Intelligence & Competitive Positioning: Identifying high-growth areas for Medicare Supplement sales and helping agents stand out.
- Lead Generation & Marketing Assistance: Providing insurance agents with qualified Medicare leads and lead programs to increase enrollment.
- Carrier Access & Competitive Contracts: Ensuring agencies partner with the best Medicare Supplement carriers based on quality and benefits, not just price.
- Compliance & Regulatory Guidance: Helping insurance agencies stay compliant with CMS rules, South Dakota regulations, and AEP strategies.
- Ongoing Training & Support for Insurance Agents: Assisting insurance agents in effectively presenting Medicare Supplement plans against Medicare Advantage.
- Co-op Marketing & Lead Programs: FMOs can often provide marketing opportunities, social media support, and lead programs that help independent insurance agents scale their business.
Conclusion: The Right FMO Can Help You Win in South Dakota’s Medicare Market
Senior Market Advisors is a leading insurance FMO with a proven track record of helping insurance agencies succeed. Whether you’re looking to expand your insurance business, increase your book of business, or improve your Medicare sales strategy, our team provides the resources and expertise you need.
South Dakota offers a strong market for Medicare Supplement plans due to low Medicare Advantage penetration, rural healthcare challenges, and a preference for provider flexibility. As Medicare Supplement plans remain the preferred choice for many South Dakota seniors, now is the time to capture this opportunity.
However, navigating this market requires a deep understanding of health insurance, strong carrier partnerships, and effective insurance marketing strategies. That’s why partnering with a knowledgeable FMO, general agency, or brokerage is essential for success.
If you’re an insurance agency in South Dakota looking to expand into the Medicare business or seeking a stronger upline, now is the time to align with an FMO that knows how to help you grow in a Medigap-focused market.
