As Medicare continues to evolve – and opinions on that subject already span the entire political and social spectrum – the ongoing refinement and restructuring of Medicare’s supplemental coverage has created some new opportunities for insurance specialists.
When the Medicare Prescription Drug Improvement and Modernization Act was passed in 2003, those who had already familiarized themselves with the various nuances of the already complicated Medicare Parts A, B and C (and the 10 standardized supplement plans) suddenly found themselves with more complex offerings. Part D prescription plans, Part C Advantage plans and other elements of the federal program are equally bewildering to senior clients, and advisors who’ve specialized in the field can provide some welcome relief to prospects.
That said, there’s long been a discrepancy between those who specialize in Medicare supplement insurance sales and those who offer more broadly structured products such as long term care insurance and annuities, but the worlds aren’t so different. And working together with those who do specialize in Medicare supplements can be an ideal gateway for advisors looking to branch out and help new clients.
Jim Summers, president of Omaha, Neb.-based Senior Market Sales, says that Medicare supplements can indeed be a smart “conversation starter” when it comes to offering a wider range of investment and wealth protection products to seniors.
“The top three annuities salespeople that I know have used Medicare supplements to get in the door,” Summers says. “What the annuities guys know is that seniors are inevitably going to ask their advisors about Medicare Part D, and when you have an educated agent who can easily transition between those worlds, it can create some business. They’ve created a totally sweet spot with their clients. We deal with one carrier which is very big on the cross-selling of long term care insurance and Medicare supplements.”
Summers says that Medicare supplement sales alone can be a good business – some who specialize in the products write up 200 to 300 cases per year, and seem entirely happy to retain that single focus – but that a more determined advisor can turn a supplement transaction (or even an inquiry) into something much bigger.
“Many agents like the supplement sales process because it’s easy. You do one interview with a client and you can make a sale, which is fine for many of them. But it’s also a good opportunity to talk a little more about health care as a broader issue. And at least you’ll understand what their potential medical situation will be, and can offer some solutions. When you have an educated agent who can make an easy transition between supplements and other products, it’s a great place to be.”
Jesse Slome, executive director of the American Association for Long-Term Care Insurance, agrees that Medicare supplement sales tend to be somewhat single-minded in their focus, which only provides a better jumping-off point for inquiring about LTCI coverage.
“With supplements sales, you’re in and out – it’s a very transactional-oriented event, which is the exact opposite of an LTC sale,” Slome says. “Medicare supplement agents typically look at LTCI as difficult and cumbersome to get people through the underwriting process. But by not talking about LTC or even asking one simple question about it, you’re leaving money on the table – and very few of the seniors who’ve been sold supplemental coverage have even looked at or talked about LTC. So it’s an important question to ask ? all you have to do is scatter some simple seeds and see what happens.”
Both product areas have their popularity, he says, with about 10 million Americans enrolled in Medicare supplement programs and another 8 million holding LTCI policies, but crossover between the two is a win-win situation for anyone involved. He also says that changing legislation provides some new and exclusive angles for LTCI specialists.
“Increasingly, in states with the Partnership Act, which mandate holding LTCI credentials to sell it, you’ve got a golden opportunity for advisors and a great incentive to get licensed. It’s a disadvantage to the tens of thousands of advisors who aren’t licensed.”
Summers echoes that sentiment. “As partnership plans get approved in more and more states and there’s more education, people definitely want to be in a position where they can sell Medicare supplements and more,” Summers says.
Teamwork can make the transition between Medicare supplements and wider-reaching retirement financial products a better deal for all involved, as well as creating a variety of opportunities.
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