
9 minute read
Some Tips and Thoughts About our Medicare Supplement Market
By Margaret Stedt, LPRT, CSA
The Medicare Supplement market continues to be a great opportunity for agents selling and servicing in Medicare beneficiaries in California. Many agents today are primarily selling the Medicare Advantage plans and are hesitant to present the Medicare Supplement plans. They are missing a great opportunity for almost half of the Medicare sales. Experienced Medicare Supplement agents are also becoming aware of carriers that are entering our marketplace, or they are exploring new relationships with carriers they did not consider previously. This is the time to take a deep dive into the Guaranteed Issue Guidelines by each carrier you represent and are considering to offer to your clients. You also want to look for additional benefits and programs such as household discounts, vision and hearing, and other ancillary benefits that a beneficiary might need.
There are quite a few challenges this year for the Medicare Supplement agent to continue to grow and service their book of business. First, we are seeing substantial rate increases for various plans. Timing varies for when carriers change rates (birthday month and base rate changes). Agents need to be aware of the dates when the rate changes occur and to prepare their clients for these changes. If you are not contacting your clients in a timely basis, you may find that your clients are looking online directly or calling the companies directly when they are receiving the adjusted billings. And, their P&C agent may be calling to offer them plans that you cannot!
One key solution for pricing is the California Birthday Rule that allows a Medicare Supplement plan covered person to change plans on or 60 days following their birthday to an equal or lesser plan. As the agent, you need to review the Guarantee issue requirements for each of the carriers and their plans that you and your client are considering. Here’s an example to consider, some carriers will not accept a downgrade to a Plan G. Another example to consider, check to see if the effective date can be the first of the month for the birthday month or must be the first of the month following the covered person’s birthday. If a person’s birthday is July 22, you may submit a signed application July 22 through September 2 with the last possible effective date of October 1. Regardless, the application must be signed and submitted prior to the effective date. Also make sure to submit the required documentation requested by the plan.
Another solution is to look at the household discounts that are offered by the various carriers that run from five to seven to 12 percent. One requires that both of the covered persons be on the exact same plan including any ancillary plans/riders such as dental coverages. Others may only require that two members of the household be covered under a Medicare Supplement Plan to receive the discount. One carrier offers a discount if there are two or more adults living in the household and the other adult may be under age 65.
Outside of the initial enrollments and the birthday changes, you have many other opportunities to present the Medicare Supplement plans under the Guaranteed Issue Guidelines. While the GI situations follow the CMS and State requirements, there are variations between the companies in which plans can be offered and for situations like voluntary or involuntary termination from a group insurance. There are also variations in whether certain plans can be offered to the Medicare Beneficiary if they are younger than 65 years old.
Always be truthful on the Medicare Supplement application as misrepresentations can result in the cancellation of the contract and other issues that could result in Errors and Omissions claims.
One issue that recently arose was the availability of returning to Medicare Supplement plan when the beneficiaries dropped their Medicare Supplement Plan and signed up for a PACE plan. They were unpleasantly surprised to be billed two months later for a large share of cost because they weren’t full dual (Medicare and Medi-Cal covered). Yes, they can return to the Medicare Supplement plans or other Medicare Advantage plans. A Medicare beneficiary enrolled in a Program of AllInclusive Care for the Elderly (PACE) plan can disenroll from PACE at any time, including mid-year, and is not required to wait for a specific enrollment period to do so. Upon disenrollment from PACE, the beneficiary will have a Special Election Period (SEP) to enroll in a Medicare Advantage (MA) plan or a standalone Prescription Drug Plan (PDP). This SEP lasts for two months after the effective date of PACE Plan disenrollment. If the beneficiary chooses to return to Original Medicare after leaving the PACE Plan, they may also purchase a Medigap (Medicare supplemental) policy within 63 days of the last date of PACE coverage, provided they are eligible and a plan is available in their state.
When you are working with clients on Medicare Supplement plans, advise them to always present both their Medicare Red, White, and Blue ID card and their Medicare Supplement card when accessing medical services. It is important they say they are covered under Original Medicare and their supplement plan.
Another tip is to help clients set up a My Medicare Account so they can track claims status. It will help you and them in resolving claims issues.
Reviewing the Medicare Supplement Plans:
These plans are designed to cover the out-of-pocket costs such as coinsurance and copays of Medicare Parts A and B. The Original Medicare Part A and B is the primary coverage (pays first) and the Med Supp is secondary. The plans will only pay if it is a Medicare approved service and Medicare pays first.
There is monthly premium for the plans. The rates for most of the plans in California are based on the covered person’s age and residence zip code or county. The rates will change from year to year based on age and a rating action by the company. If they move to another state, they may keep their plan but will pay the rates for the highest premium rate area.
Medicare Supplement Plans are subject to Underwriting and pre-existing clauses apply unless the beneficiary meets a Guaranteed Issue situation. Agents should review the underwriting guidelines (GI) for each company they represent.
As the plans are designed to cover the copayments and coinsurance amounts of Medicare, they do NOT cover additional services such as dental, Part D prescription drugs, hearing (hearing aids, exams and screenings) transportation, routine eye care, most glasses and contacts, and most health care outside the United States. However, in California, some companies are now offering the Innovative Plans (one company calls theirs Extra) that offer Vision and Hearing Benefits.
Advantages of a Medicare Supplement:
Choice of any doctor who accepts Medicare anywhere in the United States. This means if the beneficiary wants to see a John Hopkins doctor in New York or a doctor in UCLA, they have that option. Of course, they are responsible for all transportation, but at least they have the option.
Med Supp’s are portable, meaning if the covered person moves, the policy moves with them without any underwriting.
The policy is guaranteed renewable. This means the company cannot cancel the policy for anything other than non-payment. So, regardless of the use, the covered person can rest assured that they will always have coverage.
A MediGap Plan may reduce out-of-pocket costs. Medical costs are fixed and do not vary from month to month.
The main disadvantages to Medicare Supplement plans are the premium costs that typically increase each year with no additional benefits, although companies may offer ancillary benefits such as gym membership, over the counter items, chiropractic and acupuncture services, and limited overseas travel (depending on the Plan). Remember the plans are designed to cover the copays and coinsurances of Medicare. (Plan C & F cover the Part B deductible.) The Medicare Beneficiary must enroll in a stand-alone prescription drug plan for coverage for their Part D prescriptions drugs.
In addition, there is an issue regarding skilled nursing coverage if the Medicare Supplement covered person was not admitted to the hospital and were on observation status without meeting the three-day hospital stay requirement prior to being admitted into skilled nursing. Medicare will not pay, so the Med Supp will not as well.
If a covered person disagrees with a decision by Medicare for a denial of coverage, there is an appeals and grievance process to request that Medicare revisits the decision. Disenrollment is also simple. If the member changes their mind prior to the plan’s effective date, they can cancel the application and enroll in a new plan.
If they disenroll after the plan’s effective date, the covered person needs to submit a request in writing. The agent should discuss the options and consequences of the disenrollment as there are rules as to new plan eligibility and Part D.
Medicare Supplements offer great coverage options to the Medicare Beneficiary. You need to review with the client which plan best fits their needs both medically and financially. As the agent, you must understand the differences between the carriers and their plans and present them clearly for the beneficiary’s understanding. It is important to note that you will be reviewing the plans with your client annually to continue to determine the plans that best fit their needs

MAGGIE STEDT C.S.A, LPRT, is an independent contractor/licensed agent and consultant. She is a certified senior advisor and lifetime member of NAHU’s Leading Producers Roundtable at the Soaring Eagle Level. She has over 40 years of experience in essential areas of the insurance industry including sales and sales management, product development and product management.
Maggie currently serves on the NAHU Medicare Advisory Committee. Founder of the annual Senior Medicare Summit, attendance grew from 200 in 2010 to close to 1,000 attendees in 2022. She served as past president of CAHIP; NAHU Region 8 Membership Chair 2014 –2018 and past president of OCAHU, serving two terms. MAGGIE STEDT C.S.A, LPRT, is an independent contractor/licensed agent and consultant. She is a certified senior advisor and lifetime member of NAHU’s Leading Producers Roundtable at the Soaring Eagle Level. She has over 40 years of experience in essential areas of the insurance industry including sales and sales management, product development and product management.