Some agents are extremely successful selling Medicare Supplements, Medicare Advantage plans, or Medicare Part D prescription plans. Others only offer these products as a sideline to their other lines when working with prospective clients. This article pertains only to those truly serious about generating an excellent income from the sale of Medicare related products. Part-time emphasis on Medicare products may earn a little ongoing revenue, but unless you are dedicated to staying abreast of the industry, no amount of best practices will help.
Let’s start with the obvious. When someone turns 65 they are automatically eligible for Medicare benefits providing they have paid into the Social Security system a minimum of 40 quarters. Also eligible are those individuals under the age of 65 that have been on Social Security disability for a minimum of two years. And, many also learn they can “piggyback” a spouse or former spouse’s eligibility when they might not have otherwise personally qualified for coverage. You can learn more about the ins and outs of medicare jacksonville florida and the plans available from Thomas and Associates if you’re interested.
With an estimated 10,000 individuals turning age 65 each day through the year 2020, that generates a very large number of prospects. How to capture and retain those prospects is information most seasoned agents keep to themselves. Therefore, this article may be helpful to those wanting to break into this very lucrative market.
Prospecting
You can purchase lists of individuals soon to turn age 65. The same name list is normally provided to any agent that pays for the list. You are simply taking your chances with getting your name in front of a sufficient number of prospects in your territory-along with all the other agents with the same intent of signing up that individual. It works only if you are willing to spend the money to do the direct mailing, and have a good sales pitch to entice the prospect to reply to your letter or postcard.
Word-of-mouth marketing is always the best source of new leads. You have demonstrated your capability and desire to assist someone, and then they feel good about recommending you to their friends. This comes over time; the seasoned agent has many satisfied clients. However, if you are new to the industry you cannot depend on referrals to fuel your new business.
Many agents use clustering methods, such as inviting prospects to a common meeting area to discuss Medicare and the various insurance solutions available once the prospect is properly enrolled. This is a very cost-effective way to generate leads. The counter limitation is having to conform to Medicare imposed regulations that impact what can be said, what can be provided in terms of monetary value, when you can hand out business cards, etc. Each carrier being represented at those meetings will also have a say as to what is said, as their neck is on the line when an agent purports to have solutions that are not truly representative of the products they represent. One method to guard against an agent promising too much, or by doing comparisons of various plans, is the usage of Secret Shoppers, who attend your meetings to determine if you are accurately representing MAPD and Part D. A positive in using these cluster-type meetings is that, typically, those in attendance will come from the immediate trade area thus limiting follow-up meeting time.
Another proven lead generation method is to work with influence centers, such as property and casualty agents that do not want to, or have the time to, correctly cultivate their existing P&C clients when it comes to Medicare.
Often you can station yourself in high traffic areas, like near, but not in, the prescription drug area of a major pharmacy like Walmart, CVS, Walgreen, etc. Those opportunities are available through your Field Marketing Organization, and normally only during the Annual Enrollment Period. Selling to prospects onsite is prohibited. However, a casual conversation may lead to several new one-on-one appointments, and that requires a properly secured Scope of Appointment form.
My success has come from direct mail marketing to association members. They already have an affinity for their trade association, and often this becomes a true endorsement of you as their preferred agent.
Selling
You only have so much time to spend once you have made contact with the individual. It might be nice to set four appointments per day, hoping to see three individuals, and then sell at least one of those three. That’s a great goal to set for yourself! However, in reality, things often limit your ability to meet that extensive of a goal. And, your cost and distance of travel often limits your time to spend with prospects. If you only did a percentage of this goal, like selling to only three individuals weekly, you can still achieve financial success over the long run.
Consider selling over the phone. It is not as effective as one-on-one meetings, but you can cover much more ground using the telephone, followed up with mail, email, etc. Be cautious about who you call, due to the telephone solicitation rules. However, once a prospect has requested your assistance, they generally are exempt from the solicitation guidelines. That’s the real key to having an offer via direct mail that prompts the prospect to send something back to you requesting information. In my experience, that comes from becoming extremely competent on Medicare Part D… knowing which plan works best for that individual in terms of pharmacy preference, prescriptions used, etc. This also means never selling a Medicare Supplement policy without also correctly advising your prospect on which of the available Part D plans might work best for them based on their personal needs and desires. To simply refer the client to Medicare.gov is a sure way to allow a competitive agent in the door. Yes, it means having to certify annually with AHIP and the various carriers you represent, but that is the price of becoming the type of agent individuals want to use and trust enough to recommend to their friends. It also gives you access to that segment of the market that might want to try Medicare Advantage plans.
What to Recommend
The time-proven Medicare Supplement policy remains the staple product for most agents that devote a high percentage of their sales efforts in the Medicare market. It is easy to describe, and several options are available, with Plan F being the frontrunner. To do so you also need to have a true understanding of the prescription plans, as supplements do not include this. With most seniors taking, or predictably will take, medications, once you get past the adage of “all Plan F policies pay the same,” you need a way to demonstrate your true expertise to your prospect. That’s where Part D becomes the determining factor for why the prospect should select you over another agent.
Many agents are now also recommending Medicare Advantage plans. Approximately 35 percent of those on Medicare (currently 55 million) with additional gap insurance now use an Advantage plan. The rapid growth has come largely from carriers having captive agents and large marketing budgets to attract individuals to hear the story about Medicare Advantage Prescription Drug (MAPD or “All-in-One”) plans. These work well for those individuals that currently have, and then maintain, their good health. However, in an aging population medical issues often become increasingly pressing, and then the cost-sharing disadvantage of the Advantage plans becomes a major factor. For instance, your client develops cancer and needs extensive medical treatment. On the Medicare Supplement Plan F, generally most of those costs are paid by Medicare and the supplement policy and the client can use the policy with any medical provider that accepts Medicare assignment of benefits. On the Medicare Advantage plan the client is typically limited to medical providers within the immediate territory. Also, cost-sharing and other expenses can often add up quickly to the upper limit stop-loss provision of the policy. Often the stop-loss expense exceeds the cost of a Medicare Supplement policy. And, if the medical expenses continue into the following calendar year, those out-of-pocket expenses need to be met yet again when on a MAPD. However, there are MAPD Special Needs plans that cater to specific medical issues, and these can be a true advantage to those with qualifying health needs. Or your potential client may not be able to afford more traditional insurance, so the MAPD again becomes a godsend for your prospect. One other instance where the MAPD policy works very well is as a backup plan for VA benefits.
Medicare Part G plans are just like the Plan F, only the client first pays the federally stipulated Medicare Part B deductible before the supplement insurance kicks in. These Medicare policies are quickly becoming the leading supplemental gap product as Plan F is legislated to no longer become available for sale in 2020. The legislative rationale behind discontinuing Plan F is to assure that the client has some “skin in the game” other than the policy premium. The good news for those considering a supplement is that many carriers plan to permit anyone that has their Plan F at the time the legislation becomes effective can “grandfather in” their existing coverage to a Plan G. This will mean that only new applicants have to worry about the legislation. The bad news is that anyone that remains enrolled in Plan F will no longer have any new “blood” in the system…the pool of insureds will steadily decrease as those insured die or otherwise discontinue their coverage. This could develop into a remaining adverse selection pool, in that an aging population is more likely to utilize their policy benefits and new younger applicants will not be added to that insured pool. A potential counter to this is having the assurance that during the Annual Election Period of October 15 – December 7, those that have an existing Medicare Supplement policy can elect to move to a Medicare Advantage plan with no health questions asked.
Maintaining your Client Base
First, the good news. Most seniors dislike change. Therefore, once you have them as a client they are likely to remain in your portfolio of clients. However, with the advent of Medicare Advantage plans, people often want to learn their alternatives. If you don’t have a good grasp on these types of plans, then your client will assume they must turn to another agent to learn.
A provision of the Medicare rules means everyone currently enrolled in a MAPD or Part D plan can change to another plan during the Annual Election Period. Some might feel this is a limiting factor, as it means your clients are free to explore other options annually on those plans and you might lose them to another agent. However, it also is a great excuse to touch base with your clients annually just to assure them their plan is still the best for them, or to schedule a one-on-one opportunity to discuss something new. Clients like to be stroked, even if it fails to generate any new revenue. The alternative is to let another agent do this and then you are forced to find a new client just to get back the revenue level you had prior to the loss of that client.
Many agents use anniversary or birthday cards to stay in touch with their clients. This methodology has worked well for many years. Today, with the internet, agents have a very inexpensive way to stay in touch with their clients via email or text messaging. You are very unlikely to get into protocol trouble by sending an individual a birthday greeting by email. The client likes receiving the acknowledgement, but you also then have a test of the accuracy of the address. People do change their email addresses, and if your message bounces you can get on the phone and ask the client for the new contact information. This then becomes yet another opportunity to discuss not only how they are getting along, but to learn if their policies are working as projected, to pick up referrals, etc.
Financial Capability
Earlier it was mentioned that one goal would be to sell one policy each day. More realistically, when first getting started, two or three policies weekly would be more realistic. This still remains a modest goal, even for someone that has never sold Medicare products in the past. The two to three policies sold per week in year one, compounded over the next several years, results in a very substantial income. Using an average of $400 commission per plan sold, and only two to three sales per week, that still generates in the vicinity of $50,000 during the initial year. If you continue doing this in your second year, and you retain 80 percent of the initial year’s sale revenue (generally subsequent years generate a reduced commission rate, and some of your clients will terminate coverage), then in year two your income increases to more than $90,000; then $120,000 in year three. Of course, you will have marketing expenses in obtaining your Medicare related income, but the net earnings will sustain an agent for many years. If you had dedicated your efforts to sell more than two to three policies per week, you have not only a full-time income stream, but also a solid income going into subsequent years in the form of residual income. Those agents that specialize in Medicare earn great incomes and have a steady residual income stream. And, as most agents first getting started tend to do, they expand their Medicare income by introducing dental, vision, final expense, cancer and long term care insurance to supplement their Medicare revenue. Always remember, it is easier to market to existing clients than to new clients. Therefore, the add-on products will come naturally.
Once you dedicate yourself to the senior market you find that it is more than simply a monetary thing. It becomes your mission to help people resolve their gap of knowledge about Medicare. It is one of the most rewarding feelings you will ever encounter in the insurance world. Seniors need your help.
