The million-dollar question: "which plan should I sell?" Let's face it, there are so many options available
and we are tasked with the difficult job of finding the best option to fit the needs of our client, and that
is exactly where you should start. Ask the right questions to personalize a plan just for them and you can
never go wrong. As an added bonus, engaging in a memorable experience will commonly result in higher
retention rates and referrals.
In my opinion, Medicare Advantage Plans give you that flexibility. When selling a Medicare Supplement,
also known as Medigap plan, you are providing a basic "vanilla" coverage. In some cases a Medigap plan
is the safe way to go. But, here are a few things to keep in mind:
Simplicity
Retiring and moving off your employer group coverage is scary. Comparing a Medicare Advantage Plan
to their current HMO or PPO is simple. They work the same way with the added convenience of only one
Medicare Health Plan card.
The alternative is explaining how Medigap works, how they need to purchase a separate Part D
Prescription Drug Plan, and show several Medicare cards prior to a doctor appointment.
Freedom
Medicare Advantage Plans give you the freedom to shop your plan based off your changing needs on an
annual basis. This is called the Annual Enrollment Period. You are subject to only one underwriting
question (which will be going away in 2021), "Do you have end stage renal disease?"
As opposed to Medigap where you would have to go through an extensive health underwriting process
if you wanted to change plans due to rising costs, etc.
Budget
Medicare eligible individuals are on a fixed income and should be cautious of their spending each
month. Medicare Advantage Plans have a lower monthly cost because if you need to use your coverage
you are responsible for a deductible and copay. In other words, you pay as you go or as you need to use
it.
On the other hand, Medigap you pay a higher monthly premium to have less of an out of pocket
expense when using your coverage. However, is that higher monthly premium worth your peace of mind
if you are not using your coverage?
Protection
Medicare Advantage Plans have an annual max out-of-pocket protection that varies from $3,400-$6,700
per plan. You can think of it as a second deductible that once you reach it, you are covered at 100%. You
may never reach this in a lifetime.
In comparison, you could spend $3,400 annually on a Medigap plan for several years and never have a
catastrophic loss. Current health status and family history should be taken into consideration.
Additional Benefits
Most Medicare Advantage Plans have extra coverage built in to their plans, for example; dental, vision,
hearing, wellness, fitness, over the counter allowance, and prescription drug coverage.
Medigap policies only fill in the gaps of Original Medicare and do not offer any of the things mentioned
above. You would need to buy additional policies to gain access to those benefits.
Care Management
Medicare Advantage Plans assign each member a coordinated care advocate. The individual helps
facilitate better care for patients and improve health outcomes. This results in keeping costs low for the
member and the providers by ensuring the patient receives the right level of care with efficient
communication. Through this program, Medicare has experienced less fraud. Fraud is a large factor in
what keeps insurance costs rising.
Medigap policies do not have as complex of a claims review process, which can result in higher risk of
fraud.
Stability
Medicare Advantage Plans are here to stay and becoming more popular. CMS and the carriers are
developing new ways to expand benefits, lower costs each year, and increase member satisfaction. It is
a competitive market, which benefits the consumer.
When you purchase a Medigap policy, the coverage is the same per plan letter across each carrier. Rates
can change at any time due to age, company financial history or inflation. Medicare is eliminating Plan C
& F in the year 2020. The main reason is to force beneficiaries to pay the Part B annual deductible.
Medicare has eliminated other plan letters in the past and it is naive to believe that they will not
continue this trend.
Donut Hole
The majority of Medicare Advantage Plans offer assistance during the coverage gap (which will be going
away in 2020).
Medigap requires you to purchase an additional stand along Part D Prescription Drug Plan that leaves
you fully exposed.
Network
Yes, there is a network for Medicare Advantage Plans. But, there is a misconception that your plan does
not travel with you. Some carriers are nationwide, which expand their networks accordingly. Others
have out-of-network copays or travel programs built in for your protection. Most Medicare Advantage
Plans offer worldwide coverage for medical emergencies.
In comparison, Medigap is accepted anywhere that Medicare is participating with the provider. This also
includes worldwide coverage with an annual deductible for certain plan letters.
Commissions
A flat fee or "Fair Market Value" is set by CMS. Typically, it increases each year for new business and
renewals. Most companies pay in a lump sum for the first year and then renewals are paid monthly.
Renewal commissions are paid for the length of the policy or lifetime.
As opposed to Medigap commissions that are paid based off a percentage of the annualized premium
and start to decrease after about seven years.
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