Medicare Supplements

When you are selling Medicare Supplement plans, be sure to remain compliant with all federal and state guidelines. Understanding the regulations around the marketing and selling Medicare Supplement plans will not only keep you compliant, but will allow you to take advantage of guaranteed issue periods and other programs. Here are some other guidelines to keep in mind:

• A client must have Medicare Part A and Part B.
• It is illegal to sell to a client a Medigap Policy if they have a Medicare Medical Savings Account (MSA) Plan.
• If a client has a Medicare Advantage Plan, they can apply for a Medigap Policy, but must leave the Medicare Advantage Policy prior to the Medigap Policy becoming effective.
• The client’s Medigap policy is guaranteed renewable even if they have health problems. The insurance company can not cancel the Medigap policy as long as premiums are paid.
• The client will pay two separate premiums, one for the Medigap policy as well as the monthly Part B premium paid to Medicare.
• The client’s Medigap policy will only cover one person. Spouses must purchase a Medigap policy separately.
• Medicare Supplements do not include coverage for prescription drug plans or dental, vision or hearing.
• For other rules and regulations regarding Medigap Policies refer to Medicare.gov

Unlike Original Medicare, rates for Medicare Supplement plans are not decided by the government, but by private insurance carriers. Their rates will vary but most will use one of three common methods:

• Community-rated – This calculation method does not take age into account when setting rates. Premiums set with this method will be based on broad factors and applied to all customers.
• Issue-age-rated – This method does factor in age, but only at the time of issue. These rates will not go up as the client ages, but may be increased from other factors.
• Attained-age-rated – Rates that are calculated with this method continue to rise every year, along with the client’s age. Certain other discounts and factors may apply to all of these rates.

Though private insurers usually have control over their eligibility requirements, the federal law guarantees all Medicare beneficiaries the right to a Medicare Supplement policy during the guaranteed issue period, regardless of your medical history.

The Open Enrollment Period for Medicare Supplement plans begins when a person turns 65 and enrolls in Part B. The enrollment period last for six months and everyone has guaranteed issue rights during that time.

A beneficiary might also have guaranteed issue rights under certain circumstances, like if you are forced to move away from the service area of your current Medicare Advantage plan. These guaranteed issue rights may not apply to all Medigap plans.

Ready to get started selling Medicare Supplements? Here are some crucial steps to help you start off on the right foot in Medigap sales:

Partnering with an FMO

• Getting comfortable in any new sales environment can be challenging. A Medicare IMO (insurance marketing organization) or FMO can provide you with the experienced support and knowledge that can be vital to meeting your sales goals.

Getting a Proper Insurance License

• Before you start selling, you will need to be licensed in any state that you wish to sell in. You will also have to be properly contracted and certified with the respective carrier for marketing any of their products.

Purchasing Errors and Omissions insurance

• Errors & Omissions (E&O) insurance is a form of liability insurance, commonly used by businesses to protest against potential claims of negligence or inadequate work. This kind of policy can be especially useful to small businesses marketing and selling Medicare and other health insurance products.

Completing the AHIP Medicare certification

• Before you complete your required carrier training, you will need to complete your AHIP (America’s Health Insurance Plans) certification, and transmit your certificate to your desired carriers. Use SMA’s AHIP Discount.

The best way to sell Medicare Supplements is to give your business the time and attention it deserves. If you really want to start making money selling Medicare, try these tips for selling more Medicare Supplement plans:

• Maintain lead relationships
• Service your book of business throughout their plan lifetimes
• Partner with FMO
• Utilize sales tracking software and other data
• Develop a marketing plan
• Find and certify for the best states to sell Medicare Supplements