Did you know that more than 10,000 people in the United States turn 65 every day? For insurance agents, that can mean a lot of sales if you get into selling Medicare Supplement Plans. In order to create long-term sustainability for your business, you will need a residual income, and there is no better way to ensure this than by selling Medicare Supplement Plans. If you work hard enough, you could even see a six-figure residual income in as little as three to four years. In order to sell Medicare Supplement Plans, there are 6 things that you absolutely have to know.
1. How Medicare Works
In order to completely advocate for a customer, you have to be knowledgeable about the product you are selling. Medicare is divided into 2 parts: Part A (hospital insurance) and Part B (medical insurance). Part B covers essential medical expenses including:
- Ambulance services
- Doctor visits
- Lab tests
- Cancer screening
- Diabetes screening
- Durable medical equipment
Parts A and B cover 80% of costs after deductibles and coinsurance, and the other 20% is paid by the beneficiary out-of-pocket. However, if they purchase a Medicare Supplement Plan, it will cover that 20%.
Beneficiaries are automatically enrolled in Part A, but they need to sign up for Part B during their Initial Enrollment Period, which includes the 3 months before the month they turn 65, the month they turn 65, and the three months after they turn 65. If they do not sign up for Medicare Part B during this period, they will have to pay a late enrollment penalty of 10% for every year they delayed enrollment. The only way they can avoid this penalty is if they are still insured through an employer’s health insurance plan.
2. Medicare Supplement Open Enrollment
The Initial Enrollment Period mentioned above is also the best time for someone to purchase a Medicare Supplement Plan. Technically, a customer can sign up for a Medicare Supplement Plan whenever they want, but if they do not sign up during their Initial Enrollment, then they will face medical underwriting. They can then end up being denied or charged more due to pre-existing conditions.
3. What Medicare Supplement Plans Cover
Medicare Supplement Plans cover the 20% gap that Original Medicare does not pay for. What’s unique about these plans is that they cover health and wellness benefits that Medicare doesn’t cover at all. This includes:
- Medicare Part A deductible
- Part B excess charges
- Coinsurance and hospital costs for up to one year after Medicare benefits are used up
- Blood transfusions for up to three pints of blood
- Hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Medical costs incurred while traveling outside of the U.S.
In addition, Medicare Supplement Plans K and L have annual out-of-pocket limits. Once you reach the plan’s limit, Plans K and L cover 100% of covered out-of-pocket expenses for the rest of the year.
4. What Medicare Supplement Plans Do NOT Cover
Although Medicare Supplement Plans cover some services that Medicare does not, that does not mean that these plans cover everything. Medicare Supplement Plans do not cover:
- Dental care
- Eye exams
- Hearing aids
- Prescription drugs
- Long-term care
5. When Medicare Supplement Plans Are Accepted
If a doctor accepts Medicare and Medicare assignment, then they will accept Medicare Supplement Plans as well. They can be used for treatment by any doctor, whether in-network or out-of-network. This makes these plans a great option for people who travel.
6. The Difference Between Plans & How to Switch Plans
There are 10 different Medicare Supplement Plans; the difference between all of them is the coverage that they offer and their price points. A letter identifies each Medicare Supplement Plan: A, B, C, D, F, G, K, L, M, N. Not all states offer all Medicare Supplement Plans, so you’ll have to know what plans are available for customers in your state.
***Plans C, Medigap Plan F, and high-deductible Plan F are no longer available to seniors who became eligible for Medicare benefits on or after Jan. 1, 2020.
If your customer already has a Medicare Supplement Plan and wants to switch to a different plan, the only way that they can get the best price is if they pass the set of health questions the insurance company provides. If the customer is within their 6-month Medicare Open Enrollment, or if they have had their current Medicare Supplement Plan for less than 6 months, then they can bypass the underwriting process. If they are not switching within this time frame, then the company can charge them more or deny coverage due to pre-existing conditions.