Episode 23: Medicare broker deep dive - interview with Matt Gibson from 90 Days From Retirement
Mastering Medicare
00:00
Exploring the Lack of Underwriting in Medicare Advantage Plans
The chapter explores the absence of underwriting in Medicare Advantage plans, comparing it to traditional insurance plans and emphasizing the minimal qualification requirements. It also looks into optional health risk assessments used for data collection by insurance carriers but not as a prerequisite for enrollment in an MA plan.
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- Introduction of the guest Matt Gibson from 90 Days from Retirement, a platform educating about insurance post-retirement.
- Discussion about the prevalence of insurance agents buying leads of people turning 65 and how 90 Days from Retirement differs by providing education instead.
- People turning 65 often receive unsolicited mail and phone calls offering help with Medicare, which can be overwhelming.
- Explanation that data about people turning 65 is publicly available, and some businesses generate leads by buying and selling this data.
- Mention of the lack of enforcement of rules against unsolicited phone calls to sell certain Medicare products.
- Brief explanation of the main products sold by Matt's agency, including Medicare supplement plans also known as Medigap plans.
- Medicare and Medigap: Medigap plans supplement Medicare by covering deductibles and co-insurance that Medicare doesn't cover. This is one path individuals can take when they start Medicare.
- Medicare Advantage (Part C): Contrary to Medigap, Medicare Advantage acts as a replacement policy for Medicare. When someone signs up for a Medicare Advantage plan, their Medicare parts A and B are essentially turned off and the responsibility for payment and administration is transferred to the insurer. In exchange, Medicare pays the insurer a monthly fee.
- Medicare Advantage Plan Payment: Most Advantage plans have zero monthly premium for the individual because the insurer receives payment from Medicare, which can be a substantial sum.
- Becoming a Medicare Broker: To become a broker, one must be health insurance licensed, contract with specific insurance companies, and pass carrier-specific training and certification. The process can be time-consuming and complex.
- Commission Structure: Brokers must contract with insurance companies to earn commission. The commission rates are standardized and set by CMS. They do not directly negotiate these commissions but rather work under the structures set by larger field marketing operations (FMOs).
- Medicare Advantage (MA) plans and Part D drug plans are highly regulated, and insurance carriers cannot incentivize brokers to sell more products through bonuses or rewards.
- When a broker facilitates the signup of a client for an MA plan, their name and broker ID number are included in the application (paper or electronic), enabling the insurance carrier to attribute the commission.
- Brokers must be certified and part of the network of the plan they are selling. They can't start selling a plan for which they haven't taken certification.
- The availability of MA plans varies by zip code, influenced by factors such as population and medical resources. Brokers are licensed by state and may not have access to marketing materials or sell plans in states where they are not licensed.
- If a broker is certified with a limited number of MA plans available in a client's region, they are expected to inform the client about the existence of other plans, even if they don't earn a commission on them.
- Brokers often have to narrow down the choice of plans based on the client's needs, including preferred doctors, medications, and hospital networks.
- All telephonic or online consultations have to be recorded, and brokers are required to inform clients that they might not be licensed with every product in the area, even if they are.
- There were approximately 60,000 complaints to Medicare from call centers in the previous year, likely because brokers were not fully representing all available products in their market.
- Brokers use tools to compare the cost of medications across carriers and to search for doctors within each carrier's network. However, some carriers choose not to participate with certain tools, requiring brokers to go directly to the carrier's website.
- The discussion involves health insurance, Medicare Advantage (MA) plans, and how insurance agents/brokers operate.
- The speaker mentions a preference for checking a carrier's site when looking for doctors or dentists.
- Agents often receive an upfront commission when clients sign up, followed by smaller, ongoing commissions for renewals.
- After signing clients, the speaker’s office offers full service, assisting with claims, billing, and more. They provide quarterly newsletters and communicate regularly, especially during annual election periods.
- If a client's MA plan is changing significantly, the agent may recommend exploring other options. However, if the plan remains largely the same, clients are advised to continue with it.
- Not many clients switch from one MA plan to another, or from MA to original Medicare, or vice versa. Changes typically occur due to network alterations, alteration in benefits, or advertisements.
- Switching from an MA plan to a supplement plan is not always easy and may involve health questions and underwriting. Outside of specific open enrollment windows, clients cannot switch.
- Churn within the MA system does occur, though it doesn't benefit the speaker's agency financially to regularly switch clients' plans. Other agents, however, may benefit from such churn.
- There is no cost to the consumer to work with an agent. Agents are also not allowed to buy meals or gifts for potential clients, though smaller items such as coffee or appetizers are permitted.
- There is no underwriting process for MA plans. Once you have Medicare and live within the service area, you are eligible.
- For more information or assistance, the speaker invites people to visit their website, 90daysfromretirement.com.
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