I don't work this market, probably never will. I read some of the posts from the agent perspective and it doesn't seem happy.
But how about the consumer?
Tell me what is right, and what is wrong, from the consumer perspective with the over 65 market as far as supplemental plans go. I don't mean just traditional med supps, but all of the variations.
Somarco, if you aren't going to work the market, there isn't much sense into going into all the nuts and bolts. There are all kinds of ways to supplement Medicare and what the client wants and can afford is all that counts.
I do well with the senior market but I am a very experienced and well trained professional businessman and I do it all from home.
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"People who think they know it all really annoy those of us who do"
Bob, I wish someone could enlighten me. I am asked almost daily about Medicare Part ABC etc, I really don't understand enough to point them in the right direction.
Medicare Part A: Zero Premium: Covers Hospitalization ($1024 Deductible/100%Coinsurance)
Medicare Part B: $96.40 per month: Covers Outpatient Services ($135 Deductible/80% Coinsurance)
Medicare Part C: May or may not have premium, but its a privatized version of medicare. You continue to pay 96.40 but must follow new schedule of benefits. I.E. You may now pay $750 Ded. in hospital or have a flat copay at the dr.
Medicare Part D: Drug coverage. If bought alone, there will be a premium that can be taken directly out of SS check.
Those are the 4 parts of Medicare. Not to be confused with a traditional Medicare supplement, where someone would not pick up a Part C, and begin paying a premium for a plan that covers the gaps of A and B. Its not a privatized version of medicare, but a plan that literally fills in the gaps (IE- $1024 deductible in hospital and 20% not covered by Medicare)
Some Medicare PART C plans also include a Part D and still do not have a premium.
So, once you find yourself on medicare you have two choices:
Do I privatize my Medicare and allow an HMO or PPO to manage my medical insurance or do I continue to stay on original Medicare and pick up some "Gap Insurance"
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Now how does an agent make a commission off of a plan that costs the consumer nothing?
Each Medicare advantage is different from county to county.
What medicare does is takes all the seniors enrolled into Medicare in one county and divides them into the monthly cost of all the bills they pay.
For example lets say Montgomery county has 100 people on Medicare and every month Medicare is paying $1,000 in Medical bills.
Medicare takes the 100 people devides them into $1,000 and determines that the average cost (the capitation fee) is $10 per senior. They then contract insurance companies to create Senior Health Plans that must be approved by CMS (Medicare). Once Medicare approves the plan (this plan may or maynot have a premium) they agree that for every enrollee on the plan CMS will pay the insurance company that capitation fee, in this situation that fee would be $10 per month.
The agent makes a commission off the capitation fee.
Bob, I wish someone could enlighten me. I am asked almost daily about Medicare Part ABC etc, I really don't understand enough to point them in the right direction.
BCBS has a very handy, one page chart on their website that compares the differences in coverage between each plan, and it's rather easy to understand. That's how I learned about what each supplement plan covers. Plan A only suppliments part A of medicare, plan B suppliments part B, and so on through the alphabet with different combinations of coverage. The suppliment coverage for each plan is the same across carriers (from my understanding, could be wrong). After someone knows what plan they need, the choice is in the carrier, the difference between carriers is initial premium, rate of premium increase, stability of company, and if they offer cross over coverage.
Ie. (based on carriers and rates in my area) AARP has very low initial rates, but over time, their rate increases tend to be more than other carriers so in the long term, someone will pay more with them than BCBS. Lincoln Heritage tends to have the lowest inital rates and lower rate increases over all but lacks the name recognition so may be a more difficult sell (they're a Phoenix based company so not as big of an issue for me). In the long run they are the best choice for females because no other carrier beats their rates. For males that live past their late 70's, BCBS is a better choice since their rates are basically the same accross gender and age group after 70. If you have a husband and wife that both want plan F, with early enrollment discounts it would be better to put the husband on BCBS and the wife on Lincoln Heritage. They will both have the same suppliment coverage, and each will pay a lower premium than they would with the other carrier (again for my area, don't know about other states).
Each state's DOI web site has a page that lists the carriers for that state and what their premiums are, and an outline of what each suppliment plan covers (BCBS comparrison chart is more user friendly).
I asked a question similar to this in another thread. MA v Med Sup. There's some good answers in there to help people chose between whether or not a MA plan or Med Sup is better for them.
CMS decides each year how much Medicare recipients will pay in copays, deductibles & premiums. They also decide what is covered, what isn't.
CMS tells the carriers what kind of plans they can offer, must approve each plan, including rates, marketing material and comp.
CMS sets the rules for what an agent can and cannot say and where they can conduct business.
CMS encourages the consumer to shop around every year because the rules change each January. But CMS also penalizes the agent who moves clients from one plan to another.
If the consumer feels they were cheated, all they have to do is complain to CMS and the agent get's in hot water. If CMS feels the client was misled, they can change to another plan without penalty.
It seems, but I could be wrong, there are about a dozen different med supp plans, 50 or so Plan D's and an equal or greater number of MA plans. So each year the consumer, with CMS' encouragement, is invited to talk to their doc, pharmacist and the guy sleeping under the bridge for direction.
From my perspective, it seems like CMS does everything they can to make it difficult, if not impossible, for the Medicare recipients to find the right plan. And if they do find the right one, next year everything changes.
Thanks for your response, but I was hoping for something informative.
Next!
You want informative. Here:
There are four parts to Medicare:
A. Hospital - no premium
B. Outpatient-min. $96.40 mo. Doesn't change every year. Services are available on an 80/20 split. NO MAX OOP.
C. Medicare Advantage - private plans, like group, that are funded and regulated by CMS. Offered as HMO, PPO, PFFS,and POS.
D. Drug plan
There are supplement policies. CMS designed plans A thru L to supplement Medicare deductibles and copays in different ways. The insurance companies put a premium to each plan they offer. They can get expensive so many people take MA with a drug plan. In Florida it is normal not to pay a premium. The plans adjust copays every year based on the economy and claims and submit them to CMS for approval.
I sure hope my high school Medicare presentation suits you. It works for my prospects.
Believe it or not, CMS has a great website: www.medicare.gov Everything is there, more than you will want to know.
Last edited by The Rabbi : 11-16-2008 at 04:27 PM.
Well, to actually ANSWER Bob's very observant question, it is simply that the government hates people making money off of their money and as such will do nothing to encourage it to grow and prosper on the government dime.
So long as private carriers are collecting premium and doling out the services (IFP, Group, Supplements), then all is well in the world. As soon as Uncle Sugar is ponying up the dough, then they want to run it themselves (and eventually run it into the ground).
I know of no government site where I can buy and IFP plan or a small group or large group plan. I know of no state or federal mandate that tells a private insurer my value or how I can be compensated from any premiums that private insurer collects from the subscriber.
YET, any senior can go to medicare.gov and purchase any Medicare plan (MA, MAPD, Supplement and/or Part D) directly from the government through the same private carrier.
Government sees agents as an extra expense milking the cash cow of their funding, and they don't like it one bit.
The carriers by and large are doing the best they can within the contraints of this system by trying to find an acceptable and appropriate level of compensation to satisfy both parties. CMS and government would like to see agents go away. You see this on state level as well, what is compensation for Major Risk, Healthy Families, CHIP or Medicaid? Exactly.
So we have a system in place and growing where our government feels that either they or carrier-direct under their direction are the best resource to help seniors pick and switch plans.
You see this on state level as well, what is compensation for Major Risk, Healthy Families, CHIP or Medicaid? Exactly.
So we have a system in place and growing where our government feels that either they or carrier-direct under their direction are the best resource to help seniors pick and switch plans.
This is what is so scary.
The little bit I know about Medicare and Tricare is frightening to say the least. The government sets the rules about who is covered and under what circumstances. They ration care by deciding which procedures are covered and how much providers will be paid for their services.
In spite of this, it seems like the public, including medical providers, want this to expand.
For the life of me I fail to see why anyone would want this to continue, much less expand.
There are four parts to Medicare:
A. Hospital - no premium
B. Outpatient-min. $96.40 mo. Doesn't change every year. Services are available on an 80/20 split. NO MAX OOP.
C. Medicare Advantage - private plans, like group, that are funded and regulated by CMS. Offered as HMO, PPO, PFFS,and POS.
D. Drug plan
There are supplement policies. CMS designed plans A thru L to supplement Medicare deductibles and copays in different ways. The insurance companies put a premium to each plan they offer. They can get expensive so many people take MA with a drug plan. In Florida it is normal not to pay a premium. The plans adjust copays every year based on the economy and claims and submit them to CMS for approval.
I sure hope my high school Medicare presentation suits you. It works for my prospects.
Believe it or not, CMS has a great website: www.medicare.gov Everything is there, more than you will want to know.
Rabbi, I think you're short summary is closest in accuracy than the others offered, but even yours misses on a few minor points. Please don't be offended, but I insist on using prescribed terminology and am not as loose as you are. Here I go:
There are four parts to Medicare: A. Hospital - no premium
Not going to take issue here, I just say Part A is Hospital Insurance. Premiums are "pre-paid" from your work record by having your paycheck docked for 10 years or more and tracked by SSA...
B. Outpatient-min. $96.40 mo. Doesn't change every year. Services are available on an 80/20 split. NO MAX OOP.
Here's where I disagree... Premiums go up almost every year, except next year remains at $96.40. Every senior you talk to will understand the criticism: "We get a COLA only to have the government turn around and take it right back in higher Medicare premiums"... well, next year they won't. And although Medicare doesn't publish a MOOP, it can be calculated: $90,000!
C. Medicare Advantage - private plans, like group, that are funded and regulated by CMS. Offered as HMO, PPO, PFFS,and POS.
You are very close to what I say... Actually Original Medicare is akin to Basic Medical, or Catastrophic insurance, and needs a Supplement to cover your remaining medical expenses... Parts A and B are like Med-Surg plans and pay fee-for-service, whereas Part C plans are more like group insurance, which is comprehensive, just like you used to have. Some people refer to them as "co-pay plans" and offer preventive health care, and may also include drug coverage which we refer to as Part D of Medicare, but most of all, offer added benefits that Original Medicare and a Supplement do not.
D. Drug plan
Same here.
I expanded quite a bit over your short and sweet version for Bob's benefit, because I know he works IFP and Group. I do take the time to prep my clients with a short summary of insurance before I launch into Medicare so they can see I know more than just one aspect of Health Insurance, otherwise they wouldn't know the terminology, and hence, the concepts that I use.
This approach may not fit everyone.... but I leave room to pick up referrals for other products, and at the same time build credibility about my professional expertise in health insurance.
Now don't get me wrong... this is not my complete home presentation. I have it completely written out and use it as a checklist as I go down the page, point by point. It is designed such that every required point by CMS is covered, and although I talk fast, it still takes 2 hours. The checklist keeps me focused, compliant, and is a guide to help me pick up where I left off if I need to respond to a question.
Comments I have received are usually "I never had this explained to me before" or "I always wandered about that".... Last Friday I had a client that never enrolled in a PDP and wanted the $0 premium plan. When I described the Part D penalty and how much it would cost her, she said "the Humana person never mentioned that to me"... She accepted my plan, knowing it would mean about $9.30/mo and not the $0 it advertised. The point being (Bob, if you are still with me) is that it is important to cover all the points CMS asks, which takes a lot of study. Any agent that walks into the Medicare Advantage arena without doing his due diligence is asking for a violation.
I should say also, that so far I have closed every presentation that I have made this year, except for those on retiree group insurance with low premiums, or on Medicaid in counties that do not have a state COB plan, and in those instances I specifically recommend them to stay with what they have.
My presentation gets me many accolades, referrals, and occasionally a cup of coffee and a donut! When I leave, I know no other agent coming behind me is going to stand a chance.
Edit: I think it goes without saying that if I discover in the census gathering I do at the start, if someone has group insurance or otherwise ineligible or not suited, I cut to the chase and give them the bottom line. It's over in about :15 min or less. Then I chew the fat a little, and often leave with them gladly referring me to others.
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