Some Practical Advice to MA Agents

[Tom Highway]

retread, I am with you on this. This will be my third season as a captive agent in MA, and I'm getting my lifeboat ready right now. I'm not totally bailing just yet, but I have my exit strategy in place. So many agents have seen this coming, you'd almost be a fool to work representing only on MA plan and depending on that to support your family.

What I'm getting into is Final Expense, LTCi, and Cancer insurance, along with holding onto MA and supps, just in case someone needs it.

 

[Cenla Agent]

As a former captive agent selling MA and PDP (starting in 2005) and then selling a good number of them since then as an independent, I have made the same decision. I'm not saying never at this point since I could foresee a scenario under which I may write a referral or someone who cannot qualify for or afford a Supp., etc. But its definitely not a product I'm focusing on, and I have no intentions of taking any leads for MA during the next AEP even though they will probably be there for the taking from my FMO.

In general, the Med Supp market also appears to be a much better market for cross selling.

 

[bobgio]

While I agree with the assessment that if you can find something else to sell, go ahead and do it - I have not completely turned off to the idea of selling MA. What I do now is let the client know about the problems with MA plans so that the MedSup sounds much better in comparison. I'm not as rosy about MA as I used to be. So now my mix of sales is more in favor of MedSup than it used to be.

As for all the changes put in place by Medicare - wake up! Medicare does not want the MA plans at all! The purpose for making it less attractive commission-wise is to discourage agents from selling it! The purpose for developing a low priced MedSup that looks like an MA plan is to directly compete with MA plans. Question: What is the purpose of the Medicare Advantage plan?
Answer: to move the administration of Medicare health insurance to the private sector (translated: make Medicare smaller). If Medicare gets smaller, then the executives can't justify themselves.
If everyone had MA plans, Medicare would not need the army of people it now employs to handle billing.
Medicare has reduced commissions and introduced plans M and N to make it less attractive to sell a MA plan. The attraction of an MA plan to an agent was high commissions which stayed on the books after 2 months and then 3 months. And the trail was forever. SO, what does CMS do - make the commissions harder to come by. After all, with the trumped up first year commissions, we would buy more leads and sell more product. Slow the commission payment and slow the growth of the product.
The attraction of an MA plan to a client was the savings over the course of time - thousands of dollars to a fixed income person. By offering a lower priced MedSup that mirrors MA, it's a direct competition. Coincedence? I think not.
Even Obama said "we have to get rid of those" when asked about the future of MA plans and was quickly corrected by his camp that he meant changing the extra payments.
The job of "big government" is to get bigger.

P.S. In NJ, plan N is more coverage than B and less than plan C because of the co-pays. Plan B lowest price is $105.66 and the lowest priced C is $132.57. So it will probably be priced somwhere in there. Many people will opt for F ($133.39) or G ($114.23) anyway because of the value.

As for M, it mostly resembles D except for the Part A deductible is covered at 1/2 (which is equal to $534). So it will be priced at below D ($117.51) but above B.

The point is, since there are only a handful of companies that offer K ($94.75) and L ($138.50), I don't think M and N will be wildly lower than those are (so their sales will not be great anyway nor will the competition).

Also, people will buy only what you offer them. If you think the plans don't make sense, then don't offer them.

Here's the plans mentioned
B: $105.66
C: $132.57
D: $117.51
F: $133.39
G: $114.23
K: $94.75
L: $138.50

So in NJ, the plans will probably be priced in the low $100's.
In other parts of the country, the pricing will be similar to the lowest prices of the plans mentioned above. Not to fear.

 

[Insuranceman]

Another thing is, agents that have been selling MA plans are counting on the renewals for a few more years may be in for a surprise. With many companies getting out of the market and profits down the first thing their going to do is start cutting liabilities like MA agents renewals. It would be wise not to depend on MA monthly renewals much longer.

 

[jdeasy]

Another thing is, agents that have been selling MA plans are counting on the renewals for a few more years may be in for a surprise. With many companies getting out of the market and profits down the first thing their going to do is start cutting liabilities like MA agents renewals. It would be wise not to depend on MA monthly renewals much longer.

When they end the plans, the renewals are ended along with the plan. Wellcare and Coventry have already announced they are ending PFFS plans at the end of this year. All of those renewals go out the window with them.

 

[bobgio]

Plans ending is also an opportunity to sell these people all over again. If you sell them another MA plan, then the renewals are back on track under current rules. I don't agree with the new rules, because who wants to change someone from one MA to another MA and they've had the other MA for 5 years - you only get one years commission. You had to work just as hard as the original agent, why do you get less commission? Just Medlecare doing what politicians do all the time - put their own agenda and screw up the system which needs more and more fixing to correct the mess they've made.

On the flip side, if you sell them a Med Sup, then the renewals will be for 5 years beyond the 1st year (i.e. an extension of the MA renewal).

True, not everyone will sign up with you, so there is some risk.

But if you go into someone's house and show them both alternatives (MA and Med Sup) then you have a good shot that they'll do something with you.

 

[jdeasy]

Plans ending is also an opportunity to sell these people all over again. If you sell them another MA plan, then the renewals are back on track under current rules. I don't agree with the new rules, because who wants to change someone from one MA to another MA and they've had the other MA for 5 years - you only get one years commission. You had to work just as hard as the original agent, why do you get less commission? Just Medlecare doing what politicians do all the time - put their own agenda and screw up the system which needs more and more fixing to correct the mess they've made.

On the flip side, if you sell them a Med Sup, then the renewals will be for 5 years beyond the 1st year (i.e. an extension of the MA renewal).

True, not everyone will sign up with you, so there is some risk.

But if you go into someone's house and show them both alternatives (MA and Med Sup) then you have a good shot that they'll do something with you.

There is nothing else to sell them in this area as PFFS rule the market in this area. The only PPO is Humana and I refuse to sell that. Besides, it's a terrible plan. Pyramid hasn't said if they will continue to offer PFFS for 2010, but, at $69/mo, those people would be better off if Pyramid dropped PFFS and they could get a GI into a med sup for just a few dollars more per month.

I intend to move as many as possible into med sups, but, more than half of my book is dual eligibles and they just can't pay for a med sup.

I'm not getting my Coventry renewals now since they are going to Parker and Asses. My Pyramid and Wellcare renewals come like clockwork.

I met with a guy yesterday about FE that has a Coventry MAPD, {not with me}, that he pays $34/mo for. He asked me if there was anything better. I gave him the bad news that the plan he had now was going away Dec. 31 and he was going to have to do something different, but, I didn't know what was going to be available for 2010. I told him that he would have a GI into a med sup and I could put him on a plan D for $100/mo. He said that he was trying to save on the $34/mo and sure couldn't pay $100.

Right now, the shock value is going to have wear off before people will look at the value of a med sup. They are only going to have 63 days for the GI. I'm afraid many will lose that because of waiting. The guy yesterday would never qualify for a med sup without the GI period. Well, maybe AARP at an inflated price.

It's truly a sad day for senior in this area to lose the PFFS. I know that in other parts of the country they have been a problem. Here they are not. I only know of one Doctor in the tri state area that doesn't accept all PFFS plans and he doesn't take any insurance plans at all. I'm not sad to see them go because of the difficulty explaining them and the high maintenance they are for the agent, but, without a viable alternative, it's going to be very painful here.

 

[Senior Benefit]

The question is "IF" a company even chooses to sell them. In Mutual of O's release on the changes coming next year they said something like: "Mutual has not made a decision on if they will even offer plans M or N."

Just like K and L it is going to be price, price and price. If the premium savings does not justify the out of pocket risk then why would someone take it? For example most of my clients are on Plan G where the premium is approx. $200-300/yr cheaper than a C or F. Keep the $200-300 and pay your own deductible is what I tell the client. For the few companies that sell K and L their price was 80-90% of what a plan D or G was available for.

Our company has spoken with a couple of actuaries that seem to be looking at Plan "N" with a pricing of around 80%-85% of what a Plan F would be. Also it looks like most of them will be taking the wait and see approach like they did with Plans K&L. If I had to guess, either United HealthCare or Mutual of Omaha (using one of their many companies) will be first to hit the street with one of the new Plan M or N.

Dave

 

[MedSuppPro]

OK, I thought we discussed the co-pay plans last year.

By the end of September 2009 states will adopt the new standardized plans. Plans M & N hit the streets December 1, 2009. So, from December 1, 2009 till June 1, 2010 all existing and 2010 plans can be sold. Then, effective June 2010, new plans A,B,C,D,F. HD-F,G,K,L,M, and N will be sold and the old plans are history.

Well Frank, now how do ya like that for change?

 

[bobgio]

According to the FAQ sent out, your statement about "being sold" needs to be clarified. The effective date cannot be before June 2010. Here's a reprint from the FAQ's sent out:

27. When can companies begin marketing the new 2010 standardized plans and benefits?​

As soon as states adopt the revised model and companies get their 2010 policy forms, rates and, if necessary,
advertising approved by the state insurance department. But even though these plans may be marketed prior to June​

1, 2010, they cannot have an effective date prior to June 1, 2010.