AHIP Sees 28% Increase in Medigap Enrollment Among Seniors

Medigap enrollment increases as out-of-pocket expenses rise for seniors due to holes in Medicare coverage.

Source: https://healthpayerintelligence.com/news/ahip-sees-28-increase-in-medigap-enrollment-among-seniors

Medigap enrollment up in 2015

 

– AHIP has released data showing that enrollment in the Medicare Supplement, Medigap, has seen a steady increase from 2014 to December 2015.   The data represents statistics from 11.8 million enrollees with policies from 305 separate insurers.

The steady increase is due to the standard deductible, and rising out-of-pocket costs for Medicare members, AHIP says.  As an essential source of Medicare supplemental coverage, Medigap fills a critical need in the healthcare coverage ecosystem.

The report states that in 2015, Medicare Part A had a $1,260 deductible per benefit period for inpatient hospital care and coinsurance beginning with day 61 of hospitalization.  Part B required a 20 percent coinsurance for outpatient and physician care after an annual deductible of $147.

The AHIP data showed four main trends within the Medigap data:

All Medigap enrollment increased from 11.2 million in December 2014 to 11.8 million in December 2015. 

Plan G enrollment, which provides coverage of all Medicare deductible and coinsurance amounts except the Part B deductible increased by 28 percent from 2014 to 2015, or by 198,000 enrollees.

Enrollment in Plan K, which provides partial coverage for coinsurance and copayments and has an out-of-pocket limit of $4,940, also increased by 28 percent from 2014 to 2015, or by 16,000 enrollees.

An increase in the percent of fee-for-service (FFS) Medicare beneficiaries with Medigap plans increased from 30 percent in 2014 to 32 percent in 2015.

A partial explanation for the increase in Medigap coverage is directly related to the shifting sands of Medicare coverage since 1990, which has left beneficiaries and payers in flux.

This began in 1990 with an omnibus spending plan that required Medigap plans sold after 1992 to conform to one of 10 uniform benefit packages.

Then in 2003, the Medicare Modernization Act (MMA) required elimination of prescription drug benefits, authorized two new plans (K and L) with cost-sharing features, and encouraged development of standardized benefit designs with additional cost sharing features.

More cuts came in 2008 with the passage of the Medicare Improvements for Patients and Providers Act (MIPPA).   This legislation led to the elimination of at-home recovery benefits to be replaced with hospice care.  It also included the removal of preventive care benefits in response to increased FFS coverage.  2008 did see the introduction of two new Medigap policies (Plans M and N) with increased beneficiary cost-sharing features.

Medicare SELECT plans are identical to standardized Medigap plans but require policyholders to use provider networks to receive full benefits.   This results in Medicare SELECT plans to generally cost less than related Medigap plans.

In April 2015, Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

MACRA states that as of January 1, 2020, Medigap insurance carriers may no longer sell Medigap plans covering the Part B deductible to newly eligible Medicare recipients.  Only individuals who are age 65 before 2020 or those Medicare eligible due to a disability will qualify.

Three states maintain waived Medigap plans, exempt from all legislative changes from 1990 on. The three states (Massachusetts, Minnesota, and Wisconsin) continue to offer standardized Medigap plans.   Individuals who had purchased Medigap plans in these states do have the ability to keep their coverage if they move out of the three waiver states.

According to the NAIC data, 97 percent of Medigap policies in force on December 31, 2015 were standardized plans. Pre-standardized plans made up only three percent of existing Medigap policies.

Medigap plans are “guaranteed renewable” regardless of when they were purchased. This means Medigap policyholders can maintain their coverage and not have their policy cancelled if there is continued payment of premiums.

AHIP noted that Medigap plans with the highest rate of growth offered the beneficiary a predictable and consistent premium.  This feature was especially important to fixed-income Medicare members.

It also saw plans that mirrored features seen in traditional commercial products (coverage for copayments, coinsurance, and deductibles) favored by consumers.

Mutual of Omaha’s Direct-to-Consumer Application Process

Is it a good idea for a senior to fill out their own electronic application for Medicare Supplement coverage?
Should you, as an agent, send out direct mail with a carrier's website and a six-digit number code after it, and expect seniors to sign themselves up?
Absolutely not.. see the video:

 

medigap training

Radio Interview with Chris Westfall on Medicare

On November 15, 2014, Chris Westfall was interviewed on the “Money Matters” radio program on WSC 94.3FM in Charleston, SC.

The show's host, Rick Durkee, is a well known financial advisor in the greater Charleston area with a financial services firm dedicated to those that are retiring or already in retirement. Chris met Rick through a mutual friend at the radio station and Chris was invited to be a guest on the show, in recognition of the “Medicare season” going on.

Here is the interview, edited by Chris for brevity (commercials removed):

Is it legal to call folks about their Medicare plan?

Is it legal to cold call for Medicare plans?

Excerpt from SeniorAgentPodcast on iTunes:

Can I legally call someone and talk about Medicare Supplement plans?

This is a question that was asked by a new agent this week.

The agent said she had heard that you can lose your license, pay a fine, etc. for cold calling someone about Medicare plans.

What the agent is referring to is the marketing of Medicare Advantage Plans.
You can find the marketing rules from CMS about Medicare Advantage plans here.

However, in most all states, it is perfectly legal to telemarketing / cold call, door knock, and approach seniors about Medicare Supplement plans. Only one state, that I know of, has restrictions on the marketing of Medicare Supplement plans.

That state is Ohio. Their law prohibits the following for both Medicare Advantage AND Medicare Supplement marketing.

(2) Any of the following unsolicited contacts with a Medicare-eligible person:
(a) Door-to-door solicitation including leaving information such as a leaflet, flyer, or door hanger at a residence, or leaving information such as a leaflet or flyer on someone's car;
(b) Approaching individual prospective applicants in common areas (e.g., parking lots, hallways, lobbies, sidewalks, etc.);
(c) Telephonic solicitation including leaving electronic voicemail messages;
(d) These prohibitions on marketing through unsolicited contacts do not extend to mail and other media (e.g., advertisements, direct mail), or unsolicited contacts with prospective applicants with whom the entity or insurance agent has a business relationship.
Near the end of this podcast, I have several suggestions for various new ways to market Medicare Supplement plans through centers of influence.

Those referenced interviews are found at MedicareAgentTraining.com

 Hear the audio of the podcast answer here.

Also on the topic of telemarketing – CANNOT call folks for Medicare Advantage plans, as said before:

Residual Income and Insurance Sales

Medicare Supplement Training

 

I'm often asked, by agents considering coming into the niche of marketing insurance to seniors,

“Which way should I go? Life insurance sales or Medicare Supplement sales”

See the video:

The question really is, are you looking for one-time income or residual income?
If you can pay your bills right now, while starting to build your residual income, that's the best strategy.

Life insurance should be pursued in niche marketing. “The riches are in the niches.”
Medicare Supplement sales should be pursued to build a residual income for the future. This is a great retirement plan.

Mentioned in the video:

https://MedicareAgentTraining.com – Medicare Training

Thanks for watching..

Chris Westfall
[email protected]

 

 

Medicare Supplements and Pre-Existing Conditions

This is a video I did recently on Medicare Supplements and Pre-Existing conditions.

I lost a client once because one of the Medicare Supplement companies, CIGNA, sent out their new policy with a highlight on a Pre-Existing Condition warning. They did not, however, explain in their materials that the pre-ex does not apply if they've already had their Medicare Supplement policy with their former carrier for at least six months.

So, if you are replacing one Medigap (Medicare Supplement) policy with another one, and they were with the old company for at least six months, there are no pre-existing condition exclusions. There are no waiting periods, there are not denied claims with the new carrier where that would not have been denied with the old carrier (if they're moving to the same plan letter with the new carrier).

Here is the video explaining how pre-existing conditions are treated when changing Medicare Supplement policies.

Here is the “Choosing a Medigap Policy” guide:

  http://www.medicare.gov/pubs/pdf/02110.pdf

You can request copies of this from Medicare directly (www.medicare.gov) or by requesting it from any insurance carrier you are writing business for now.