Med Supp Cost/Pricing

CFP83

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I normally just send all health insurance cases/clients with questions to a local health agent here in town, however this is an issue that has came up a couple times in the past six months and I would like to at least have a general understanding to provide feedback for the client.

I have a client in their 70's who was in my office last week and we reviewing their investment portfolio and analyzing their current monthly budget to determine our how much we will anticipate distributing from their accounts over the next 12 months. Well, we came to the health insurance line on the budget and I find out their currently spending $800 per month for medicare supplement insurance. Now, the wife is currently on kidney dialisis...husband no health issues.

My first question is how are med supps priced? Is their individual underwriting? I assume pre-existing health conditions such as dialisis drive up the cost of one's med supp?

Thanks for the help
 
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What State are you in ? Tat seems WAY TTO HIGH FOR A SUPPLEMENT PREMIUM. There have to be other issues. If they're in Oregon, please call me.

Sheldon 503-213-3380
 
Medicare supplements are normally priced on the age of the client when they sign up. If they are 65 or new to Medicare the have 0 health questions asked. Every year companies normally raise rates each year as they get older.

The problem is that the client likely could not change her insurance as she now could not answer the health questions. Kidney dialisis is a knock out question, that the companies will not accept an application.

Her husband could shop around for a lower priced plan.
 
Sorry for the typing errors. I think you know what I was trying to say.
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There two new medciare supplements coming out 6/1/10. I don't know what companies will offer them in your state, but I know that Mutual of Omaha in Oregon is offering Plan N on a guaranteed issue basis, so her Dialysis may not be a problem with them.
 
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Med Supps are priced per individual based on their age and with individual underwriting. Their premiums will increase every year if the company uses the Attained Age method of computing premiums. If the company uses the Issue Age method then premiums generally do not increase every year.

MOO in Ohio uses the Attained Age method. Also Plan N is GI in Ohio which means that she will not have to answer any health questions to take a Plan N. If they are currently paying $800 per month their combined premium could be less than half that for a Plan N. This is going to depend on their zip code.

Health conditions do not affect the cost of a Med Supp. They are either issued or not issued. There can be no rate-ups or exclusions.

If you would like to give me a call in the morning I can explain it further and give you exact premiums on each of them. There is no reason to pass that sale on to another agent. Med Supps are very easy to understand and most companies in most states pay first year commission for the first six years.
 
Usuallly when the premium is that high it's group coverage. If you switch them to a Med supp, you'll lower their premium, more thank likely improve their medical and hospital coverage but the prescription coverage usually won't be as good. With group coverage there is no doughnut hole/gap in coverage on their prescriptions. On individual Medicare part D prescription plans they'll have up to $2830 in prescription benefits, once their prescription costs exceed this amount than they go into the doughnut hole, where they have to pay their own prescription costs until their total out of pocket reaches ...i think $4,550. Than the plan starts covering them again. Every January 1st their prescription benefits fully restore. Starting January 1 2011, namebrand drugs will be covered at 50% for those in the doughnut hole. Right now, the client pays 100%, so there is help coming.

Be sure and look into this before you make any changes. Find out if it's group or an individual Medicare supplement.
 
What State are you in? If they're in Oregon, please call me.

There are state flags under the User ID's and he did say they came in to his office so I would have to guess they are in Ohio not Oregon.

Maybe you should start by changing your flag from alabama to oregon,you can do this in the "user cp" found above.

BTW if you dont know the flags you can hold your cursor over said flag and it will reveal the state.
 
Either they have group coverage, or they kept the old Medicare Supplements that included prescriptions (Plan I -$1500 max or Plan J-$3,000 max)...If they have the latter, then they will have to pay a penalty because the Rx coverage in these plans is not considered creditable coverage
 
Thanks for all the feedback here guys.

Some of the responses were conflicting here, however I'm learning a basic understanding of med supps.

My thoughts are now this....I don't want to do med supps. Like many have said, they may very well be easy to learn and I would probably pick it up very easily, however I don't want to add "medical insurance" of any type to my practice. When our clients need P&C advice, legal advice, accounting advice, I bring the appropriate professional into the picture. I would like to do the same thing with med supps, so I would simply have a "med sup broker" who I run all this business through.

Give me your feedback on this if you could guys, what i'm picturing is this: Setting up a relationship with a med sup agent/specialist....not just anyone, but someone who is an experienced professional. When I come across an opportunity, myself or my assistant calls/emails this agent with our clients specifics and then the agent emails me back with the numbers and basics of the company/plan to go with as well as the application. During my next meeting with the clients while they are in my office I have the client sign the application and then my assistant will mail it back to med supp agent. I could also conference call the med supp agent in during the meeting so that he/she could answer any questions that my client may have. My attitude through the entire process is "I am not the person to discuss this with, however we have brought an experience specialist into the pictue to address this for you".

Because of the degree of "teeing it up" I am doing, and the lack of "selling" needed on the agents part I was thinking that 50/50 seems fair here.

As always, I look forward to all of your feedback.
 
Thanks for all the feedback here guys.

Some of the responses were conflicting here, however I'm learning a basic understanding of med supps.

My thoughts are now this....I don't want to do med supps. Like many have said, they may very well be easy to learn and I would probably pick it up very easily, however I don't want to add "medical insurance" of any type to my practice. When our clients need P&C advice, legal advice, accounting advice, I bring the appropriate professional into the picture. I would like to do the same thing with med supps, so I would simply have a "med sup broker" who I run all this business through.

Give me your feedback on this if you could guys, what i'm picturing is this: Setting up a relationship with a med sup agent/specialist....not just anyone, but someone who is an experienced professional. When I come across an opportunity, myself or my assistant calls/emails this agent with our clients specifics and then the agent emails me back with the numbers and basics of the company/plan to go with as well as the application. During my next meeting with the clients while they are in my office I have the client sign the application and then my assistant will mail it back to med supp agent. I could also conference call the med supp agent in during the meeting so that he/she could answer any questions that my client may have. My attitude through the entire process is "I am not the person to discuss this with, however we have brought an experience specialist into the pictue to address this for you".

Because of the degree of "teeing it up" I am doing, and the lack of "selling" needed on the agents part I was thinking that 50/50 seems fair here.

As always, I look forward to all of your feedback.

Although your approach is very professional and well thought out I think that you are "over thinking" the situation. Med Supps are not that complicated to learn and sell. Anyone in your office can become a Med Supp "specialist" in a very short period of time. There are virtually no "moving parts" to Med Supps. So much so that companies do not even require agents to carry E&O insurance. It's virtually impossible to screw one up.

During the initial meeting with your client you can easily handle the entire transaction in a very short period of time. Selling Med Supps is not like selling individual health insurance or adding "health insurance" to your practice as you may perceive it.

If you would like to give me a call I can give you a crash course on Med Supps. I think that would help you better understand them and most likely give you cause to rethink your approach to helping your clients. There is virtually no service work associated with Med Supps.
 
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