If you aren’t already selling Medicare Supplement plans, you are missing an important product in your portfolio. While 51% of eligible Medicare beneficiaries enrolled in a Medicare Advantage plan in 2023, these plans aren’t right for everyone. By selling Medicare Supplement plans you will be able to meet the needs of all your clients. And since these plans can be sold year round, you have the opportunity to grow your business and increase your earning potential.
Medicare Supplement plans, also known as Medigap plans, are available in every state and each state has their own specific licensing requirements. In most states you need to be a licensed health insurance agent. Once you are licensed you will need to be contracted with the carriers whose Medigap plans you want to sell.
Here’s what you need to know about selling Medigap plans:
Medigap Applicant Requirements
Anyone who is age 65 or older and is eligible for Original Medicare can enroll in a Medigap plan. They must also meet these requirements:
- Be enrolled in Part A and Part B
- Be a citizen or legal resident of the U.S. for at least five years
- Reside in a state offering the Medigap plan
The best candidates for Medigap plans are individuals who:
- Don’t want to be limited by provider networks associated with Medicare Advantage plans
- Don’t want the hassle of prior authorizations and waiting periods
- Travel frequently for extended periods of time outside their local area
Medigap Open Enrollment Period
The best time to enroll is during the Medigap Open Enrollment Period, a one-time six month period that begins the first month a person turns 65 and has signed up for Part B. During this time applicants cannot be denied coverage due to health issues. This is referred to as Guaranteed Issue Rights. Once this initial enrollment period has passed, insurers in most states will require the applicant to undergo medical underwriting and can refuse an applicant coverage due to preexisting health conditions. Only in very specific circumstances can GI rights be extended outside the initial enrollment period.
Standard Medigap Plans
There are currently 10 standard Medigap plans, each designated by a different letter A to N. Each plan is set up to provide a different level of supplemental coverage to Original Medicare. The benefits covered by each plan are determined by the federal government and they must be consistent across all insurers. Premiums will vary based on the carrier, the applicant’s zip code, age, gender, and tobacco use. Not all plans are available in all areas.
Make sure you have current rate sheets and applications for each carrier, so you are providing accurate information to your clients. Use e-applications whenever possible to avoid errors and delays.
How Underwriting Works
If you are selling Medigap plans you need to understand how underwriting works so you can help your clients navigate the process. Each carrier has their own unique underwriting rules which are spelled out in their guidelines. Here carriers will list the top health conditions and prescription drugs that will usually result in a denial. You should also be familiar with the health questions portion of the carrier’s application. When you meet with a client, you can review these questions with them to determine their eligibility. If you know there will be an automatic denial based on their answers you can avoid the disappointment of applying and being denied.
Medigap Commissions
Medigap commissions vary based on the state, plan type and carrier. CMS does not set a cap on commissions like they do for MA and Part D plans. You will earn a percentage of the premiums on the policies you sell. You will continue to earn renewal commissions, typically for at least another six years, but these rates might be lower than the initial year. For some policies, the commission payments end after a specific period of time, so it’s important to know the details on the policies you sell.
Offer Your Clients a Complete Portfolio of Products
If you sell Medigap plans, you want to be able fulfill all the needs of these clients to ensure they are fully covered. This means selling Part D, as well as stand-alone vision and dental plans. When you offer a full range of products your clients won’t have to shop elsewhere.
Do you have questions about selling Medigap plans in Texas? PTT Financial is here to help. Contact us today.
