Expanding your business portfolio with Medicare Supplement plans can significantly boost your market presence, particularly if you're already engaged in selling Medicare products. For professionals with experience in health or life insurance, venturing into Medicare Supplement sales offers a lucrative gateway into the broader Medicare market, enhancing your service offerings and client reach.
Advantages of Selling Medicare Supplements
Ease of Entry: Medicare Supplements, or Medigap, require no complex certification, allowing year-round client enrollment without strict enrollment periods.
Profit Potential: These plans offer high first-year commission rates and annual residuals, with the possibility of long-term income due to plan durations exceeding 8 years.
Expanding Market: Targeting the rapidly growing senior population (65+), Medigap plans complement Original Medicare, addressing a critical need in a vast market.
What is an FMO?
A Field Marketing Organization (FMO) plays a pivotal role in empowering independent insurance agents by enhancing their sales and client retention strategies. Through unparalleled customer support and access to cutting-edge resources and tools, an FMO acts as a vital partner for agents aiming to excel in the competitive insurance market. This partnership ensures agents are well-equipped to meet the diverse needs of their clients efficiently.
Who purchases a Medicare Supplement Policy?
Medicare Supplement insurance plans, also known as Medigap, provide a seamless entry into the expanding Medicare market. These plans cater to individuals already enrolled in Medicare, including seniors and, in some states, those eligible due to disability or disease, offering them a way to cover additional healthcare costs not covered by Original Medicare.
Key Compliance Guidelines for Selling Medicare Supplement Plans
Medicare Enrollment: Clients must have both Medicare Part A and Part B.
Medigap Eligibility: It's illegal to sell Medigap if a client has a Medicare Medical Savings Account Plan.
Transition from Medicare Advantage: Clients can switch to Medigap from Medicare Advantage, but must leave their Advantage plan first.
Renewability: Medigap policies are guaranteed renewable, regardless of health issues, as long as premiums are paid.
Premium Payments: Clients pay separate premiums for Medigap and the Medicare Part B premium.
Individual Coverage: Medigap policies cover one person. Spouses need separate policies.
Exclusions: Medigap doesn't cover prescription drugs, dental, vision, or hearing.
Further Information: For detailed rules, visit Medicare.gov.
Medicare Supplement Plan Rate Determination Methods
Community-Rated: Rates are determined without considering age, based on broader factors affecting all customers equally.
Issue-Age-Rated: Premiums are set based on the age at policy initiation, with no increases due to aging but potential adjustments for other reasons.
Attained-Age-Rated: Premiums increase with the policyholder's age, alongside other possible discounts and factors affecting rates.
Enhanced Understanding of Medicare Supplement Guaranteed Issue Rights
Federal Protection: Regardless of medical history, federal laws secure every Medicare beneficiary's right to a Medicare Supplement policy during the guaranteed issue period.
Open Enrollment Period: This critical period kicks off when an individual turns 65 and enrolls in Medicare Part B, extending six months with guaranteed issue rights.
Special Circumstances: Beneficiaries may also receive guaranteed issue rights under specific conditions, such as relocating from a Medicare Advantage plan's service area, although these rights may vary by Medigap plan.
Steps to become an Insurance Agent: See Get Started Selling Medicare
Get the Right Insurance License
Pre-licensing Course: Requirement: Complete your state's mandated pre-licensing course and pass the certification exam. Note: Each state has unique requirements for course duration and content.
Licensing Exam: Next Step: After successful completion of the pre-licensing course, sit for your state's official licensing exam.
Background Check: Procedure: Pass a background check, which may vary by state and can include fingerprinting, after clearing the licensing exam.
Apply for License: Final Step: With all exams passed, apply for your insurance license through the National Insurance Producer Registry (NIPR).
Obtain Error & Omissions (E&O) Insurance:
E&O is a critical safeguard for insurance agents, providing essential liability coverage. Here's why it's indispensable:
Risk Management: Protects against claims arising from errors or omissions in your professional services.
Financial Security: Shields you and your agency from the financial burden of legal fees associated with these claims.
Complete the AHIP Medicare Certification:
Essential Certification: AHIP certification is mandatory for agents intending to sell Medicare Advantage plans.
Affordable Investment: The test fee is $175, but we provide a discount, making it a cost-effective step towards boosting your sales, especially during the Annual Enrollment Period (AEP).
Simple Certification Process:
Website Navigation: Start by creating a new account or logging into an existing one on the AHIP website.
Plan Selection: Choose the certification year and opt for continuing education credits for added benefits.
Preparation and Exam: Complete the training modules and quizzes to prepare, aiming for a 90% or higher score on the AHIP exam.
Certificate Management: Ensure you print, save, or transmit your certificate to keep it secure. Additional Benefits with ExecutiveFMO:
Support and Updates: Contracting with ExecutiveFMO grants access to weekly newsletters and regular updates, including information on further AHIP certification discounts at no additional cost.
Enrollment Periods
Initial Enrollment Period (IEP): A seven-month window surrounding an individual's 65th birthday, allowing first-time Medicare enrollment.
Open Enrollment Period (OEP): From January 1 to March 31, permitting changes between Medicare Advantage (MA) plans or a switch to Part D.
Annual Enrollment Period (AEP): Occurring from October 15 to December 7, this is the primary time for switching from Original Medicare to an MA plan.
Special Enrollment Period (SEP): Available for specific life events such as relocation or loss of coverage, with eligibility for changes to coverage or Special Needs Plans (SNPs) under certain conditions.
General Enrollment Period (GEP): From January to March for those who missed their IEP, though penalties may apply and coverage starts July 1. Each period serves a specific purpose, ensuring flexibility and access to necessary coverage adjustments based on individual circumstances.