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Returned very late on Friday night from the conference, so I've been doing a lot of catchup work, but I wanted to give you some highlights of what I learned from this conference.
First, it was an "industry" conference, not a "producer" conference. Which means it was the first time, in nine years of insurance selling, that I actually heard insurance people talking to me about the product without trying to gauge their conversation in a way to try and get me to sell it. It was really enlightening and engaging to hear people talk the Medicare Supplement as a product in and of itself. The other interesting thing about it, was there is a great deal of love and affection within the insurance industry for what Medicare Supplements are and how they positively impact the lives of seniors. I was very impressed listening to these industry insiders give their views of the product.
There were a couple of important takeaways I got from this conference. The first, is PPACA mandated Medicare Supplements plan C & F get redesigned for 2015. The government feels that people with "first dollar coverage" medicare supplements are abusing Medicare because there is no cost sharing involved. Got to meet one of the people doing the redesign, and he said the amount of extra money being spent by these so called "abusers" is around $318 million, or as he puts it, a "drop in the bucket, compared to Medicare's overall expenses." Nonetheless, all supplement C & F plans are being redesigned currently by the NAIC. Their timeline is to have it done by the end of the year so that the individual states can approve the new plans by the end of 2014. I won't go into specifics of what they're putting in, because they haven't agreed on what those specifics are, but it will be something along the lines of a $500-$600 deductible and then copays on select services up to a maximum out of pocket. This makes the plan G the new Cadillac plan after the redesign. They also cautioned the White House is spearheading a move to begin taxing people who wish to keep their current supplements or purchase other plans with first dollar coverage. He went out of his way to say plans D & G are considered "first dollar coverage," in their current incarnations, under the calculations they are putting forth. The taxation and penalization of Medicare Supplements hasn't happened yet, but it is being pushed very hard and they anticipate the push to actually involve proposals after the November elections.
Another takeaway I got was Congress is looking at adjusting MLR ratios on Supplements in the way they are being adjusted for major medical. There is currently a bill in Congress to do exactly that but it currently has very few supporters. This may change in the future. If you do not know what that means, it means there is a very high chance that all of our commissions could be drastically and significantly cut in the future. If you aren't involved in any PACs to protect your business, get involved now!
I also got to hear some of the results of a couple actuarial companies and reinsurance company surveys. Apparently, 60% of all medicare supplements sold are plan F. The next highest one, with 10% is the plan N, which recently surpassed plan G (considering how few N's I've sold, I was rather surprised by that). The largest seller of Medicare supplements, with 20% of total market share, is United Healthcare under the AARP name. I can't recall the second, but I recall the various Blue Cross/Blue Shields were about 5th. And to my astonishment, 3rd place, with 5% of all supplements is Bankers Life and Casualty! 90% of all seniors have some kind of supplemental coverage, 30% have Medicare supplements and another 30% have MA's. Supplement sales were lagging behind MA plans in recent years, but last year, supplement sales surpassed MA plans once again.And 1 in 10 seniors have 6 more more chronic conditions and those 1 in 10 are responsible for 50% of everything Medicare pays out.
PPACA mandates the creating of accountible care organizations (ACO's). Supplements are expected to be a great partnership with these ACO's, as they are a convenient platform for ACO's to communicate with beneficiaries about the quality and necessity of care. Medicare Advantage will not be participating in the ACO programs. And while ACO's are not, by law, allowed to be Medicare Supplements themselves, through a series of partnerships, sub corporations, and mergers, there is a possibility that a "perfect storm" could come by where a successful ACO comes in, creates or "endorses" one particular medicare supplement, and literally dominates the market. ACO's could wind up being the largest competitors to medicare supplements in the future.
There was also a great deal of discussion about MA plans and their place in the market. In 2013, they expect fewer new entrants into the market, as smaller players discover that the "goldmine" of CMS payments is riddled with "landmines." Insurance companies learned the hard way that dealing with 50 state regulators is actually easier than dealing with one national regulator (CMS). Quality of care, service, and costs are continuing to become more scrutinized by HHS on the MA plans. MLR rates are up at major medical levels beginning in 2014 (in other words, expect agent fees to be almost halved). Networks are going to become more discriminatory as a result of these new cost cutting measures, making HMO and PPO MA plans more difficult in terms of having many hospitals, small doctor practices covered (they mentioned this makes an interesting opportunity for Medicare SELECT plans, which does not have this same scrutiny).
There was just so much more, I don't have time to report on all of it. I'm including just two of my notes, but I've got the notes on 18 of the presentations. Some worthwhile, some not. I did not have time to edit these. They were typed on the fly, by me, on an iPad, so there are some misspellings, auto correct errors, and probably a few things that don't make sense, but if you are interested in reading these, here they are. I also recorded a few of the presentations using the bad mic in the iPad. It needs a lot of cleaning up, but I'm hoping I can make these listenable and re-listen to as many as I can in the coming weeks.
They hold these conferences every 18 months. So next one will be around September, 2013. Is it worth it? For the majority of people reading this, I'd probably say "no." If supplements are not a significant part of your income or your time, then take a pass on this. They had an "agent day" which is what you'd expect: tips on selling supplements. IMHO, I didn't really learn anything there, I didn't need it. After the agent day was over, then I got to the meat of the conference and got the insights I was looking for. They say they aren't going to do another agent day. So if that's true, and you aren't interested in the minutiae of Medicare Supplements, then don't bother. But, if you spend a lot of your time on Medicare supplements, and you want to learn more about what makes them tick, and you want to hear from people that deal with supplements that aren't in the business of selling them to either agents or clients, then absolutely consider this conference.
Feel free to ask me any questions you'd like, I'll be glad to answer anything I can, to the best of my abilities. I'll keep checking in on this thread for the foreseeable future.
First, it was an "industry" conference, not a "producer" conference. Which means it was the first time, in nine years of insurance selling, that I actually heard insurance people talking to me about the product without trying to gauge their conversation in a way to try and get me to sell it. It was really enlightening and engaging to hear people talk the Medicare Supplement as a product in and of itself. The other interesting thing about it, was there is a great deal of love and affection within the insurance industry for what Medicare Supplements are and how they positively impact the lives of seniors. I was very impressed listening to these industry insiders give their views of the product.
There were a couple of important takeaways I got from this conference. The first, is PPACA mandated Medicare Supplements plan C & F get redesigned for 2015. The government feels that people with "first dollar coverage" medicare supplements are abusing Medicare because there is no cost sharing involved. Got to meet one of the people doing the redesign, and he said the amount of extra money being spent by these so called "abusers" is around $318 million, or as he puts it, a "drop in the bucket, compared to Medicare's overall expenses." Nonetheless, all supplement C & F plans are being redesigned currently by the NAIC. Their timeline is to have it done by the end of the year so that the individual states can approve the new plans by the end of 2014. I won't go into specifics of what they're putting in, because they haven't agreed on what those specifics are, but it will be something along the lines of a $500-$600 deductible and then copays on select services up to a maximum out of pocket. This makes the plan G the new Cadillac plan after the redesign. They also cautioned the White House is spearheading a move to begin taxing people who wish to keep their current supplements or purchase other plans with first dollar coverage. He went out of his way to say plans D & G are considered "first dollar coverage," in their current incarnations, under the calculations they are putting forth. The taxation and penalization of Medicare Supplements hasn't happened yet, but it is being pushed very hard and they anticipate the push to actually involve proposals after the November elections.
Another takeaway I got was Congress is looking at adjusting MLR ratios on Supplements in the way they are being adjusted for major medical. There is currently a bill in Congress to do exactly that but it currently has very few supporters. This may change in the future. If you do not know what that means, it means there is a very high chance that all of our commissions could be drastically and significantly cut in the future. If you aren't involved in any PACs to protect your business, get involved now!
I also got to hear some of the results of a couple actuarial companies and reinsurance company surveys. Apparently, 60% of all medicare supplements sold are plan F. The next highest one, with 10% is the plan N, which recently surpassed plan G (considering how few N's I've sold, I was rather surprised by that). The largest seller of Medicare supplements, with 20% of total market share, is United Healthcare under the AARP name. I can't recall the second, but I recall the various Blue Cross/Blue Shields were about 5th. And to my astonishment, 3rd place, with 5% of all supplements is Bankers Life and Casualty! 90% of all seniors have some kind of supplemental coverage, 30% have Medicare supplements and another 30% have MA's. Supplement sales were lagging behind MA plans in recent years, but last year, supplement sales surpassed MA plans once again.And 1 in 10 seniors have 6 more more chronic conditions and those 1 in 10 are responsible for 50% of everything Medicare pays out.
PPACA mandates the creating of accountible care organizations (ACO's). Supplements are expected to be a great partnership with these ACO's, as they are a convenient platform for ACO's to communicate with beneficiaries about the quality and necessity of care. Medicare Advantage will not be participating in the ACO programs. And while ACO's are not, by law, allowed to be Medicare Supplements themselves, through a series of partnerships, sub corporations, and mergers, there is a possibility that a "perfect storm" could come by where a successful ACO comes in, creates or "endorses" one particular medicare supplement, and literally dominates the market. ACO's could wind up being the largest competitors to medicare supplements in the future.
There was also a great deal of discussion about MA plans and their place in the market. In 2013, they expect fewer new entrants into the market, as smaller players discover that the "goldmine" of CMS payments is riddled with "landmines." Insurance companies learned the hard way that dealing with 50 state regulators is actually easier than dealing with one national regulator (CMS). Quality of care, service, and costs are continuing to become more scrutinized by HHS on the MA plans. MLR rates are up at major medical levels beginning in 2014 (in other words, expect agent fees to be almost halved). Networks are going to become more discriminatory as a result of these new cost cutting measures, making HMO and PPO MA plans more difficult in terms of having many hospitals, small doctor practices covered (they mentioned this makes an interesting opportunity for Medicare SELECT plans, which does not have this same scrutiny).
There was just so much more, I don't have time to report on all of it. I'm including just two of my notes, but I've got the notes on 18 of the presentations. Some worthwhile, some not. I did not have time to edit these. They were typed on the fly, by me, on an iPad, so there are some misspellings, auto correct errors, and probably a few things that don't make sense, but if you are interested in reading these, here they are. I also recorded a few of the presentations using the bad mic in the iPad. It needs a lot of cleaning up, but I'm hoping I can make these listenable and re-listen to as many as I can in the coming weeks.
They hold these conferences every 18 months. So next one will be around September, 2013. Is it worth it? For the majority of people reading this, I'd probably say "no." If supplements are not a significant part of your income or your time, then take a pass on this. They had an "agent day" which is what you'd expect: tips on selling supplements. IMHO, I didn't really learn anything there, I didn't need it. After the agent day was over, then I got to the meat of the conference and got the insights I was looking for. They say they aren't going to do another agent day. So if that's true, and you aren't interested in the minutiae of Medicare Supplements, then don't bother. But, if you spend a lot of your time on Medicare supplements, and you want to learn more about what makes them tick, and you want to hear from people that deal with supplements that aren't in the business of selling them to either agents or clients, then absolutely consider this conference.
Feel free to ask me any questions you'd like, I'll be glad to answer anything I can, to the best of my abilities. I'll keep checking in on this thread for the foreseeable future.
