Entering the Medicare Advantage (MA) market can be very exciting — yet very daunting. There are rules and regulations issued by the Centers for Medicare and Medicaid Services (CMS) that pertain only to MA and Part D sales and marketing, the plans can be confusing, and choosing the best place to start might be overwhelming. Here are the five biggest questions — and answers to those questions — you have about selling MA products. The answers will tell you what to expect when getting involved.

What is MA?
Medicare Advantage programs, also called Medicare Part C, are CMS-approved private insurance plans which provide Medicare beneficiaries with health care (and in some cases prescription drug coverage) under Medicare guidelines.

MA programs consist only of medical coverage, while Medicare Advantage Prescription Drug (MA-PD) programs comprise both medical and prescription drug coverage.

In addition to the premiums paid by the client, CMS pays the carrier a fixed amount per month for the beneficiary’s care. In turn, the carrier provides and administers all the plans benefits. The private insurance carrier provides the primary coverage under these programs.

There are five main types of MA plans:

  1. Health maintenance organization (HMO). These plans have a defined network of providers. The member must pick a primary care doctor, who will refer them to a specialist if necessary. Coverage is limited to providers listed in the network.
  2. Preferred provider organization (PPO). This type of plan has a defined network of providers; however, the member can choose to go outside the network. Typically, this will result in higher out-of-pocket costs. The member does not need to choose a primary doctor, and no referrals are needed to see specialists.
  3. Private fee-for-service (PFFS). These programs do not have a defined network. Members can go to any provider who accepts the terms and conditions of the plan and is willing to bill the carrier directly for services.
  4. Health savings account (HSA). Formerly called medical savings accounts, these plans allow members to place money (up to a certain amount) in a tax-deferred account. The member is usually responsible for all medical costs up to the amount in the account, and then the plan will contribute after that total is reached.
  5. Special needs plan (SNP). This type of program is for beneficiaries with certain qualifying conditions, such as diabetes. The plans usually provide extra benefits pertaining to the member’s condition, such as lower costs for doctor’s visits or reduced prescription costs.

Which plans can I sell?
MA and MA-PD plans vary by county. The easiest way to see what is available is to use Medicare’s Web site, www.medicare.gov, and enter the Zip codes of each county in which you wish to offer plans. Then, you can see which types of plans are offered (HMO, PPO, PFFS, etc.), if they include drug coverage, and information on basic copays. Medicare also allows you to download a summary of benefits guide, which outlines the copays of the various plans in detail.

How do I get started?
Once you have determined which carriers you choose to represent, you have two options on how to proceed. You can sell the products directly with the carrier (although some carriers may not allow this), or you can go through a brokerage general agency or wholesaler. Selling directly through an insurance company means that you are contracted under the carrier with no up-line or other agents associated with you. This will usually result in the highest commission levels. Going though a wholesaler means that you have an up-line and the wholesaler will take an override on your production, which sometimes results in a reduced commission. In return, the wholesaler may provide you with additional training, support, marketing, leads, or other incentives for using them.

Be aware that if you choose to go through a brokerage general agency, you will most likely sign a contract. If you decide to depart from the organization at a later time, you will need a release from them. Some carriers require you to sign a contract but will automatically release you after a certain amount of time has passed during which you haven’t written any applications (usually six to 12 months).

Whichever path you choose, you will have to get certified with each carrier annually. This may include an online study course or an in-person seminar or training session. After that is completed, you must pass an exam in order to offer MA plans from that carrier. This exam will typically cover marketing and sales guidelines, plan designs, plan copays, and other information related to MA plans specific to that carrier. These topics are covered in the training prior to the exam.

In September 2008, CMS released new marketing and sales guidelines for agents selling Medicare Advantage and Part D plans. Although these regulations may be covered in your training seminars, it is still a good idea to read over the guidelines yourself to make sure you are in complete accordance with them. to read an outline of the regulations, or visit www.cms.hhs.gov to view the full text.

When can I sell MA?
MA, MA-PD, and Part D follow an enrollment schedule annually as follows:

  • : Oct. 1 – Nov. 14. Producers can market plans, but no applications can be distributed or accepted.
  • : Nov. 15 – Dec. 31. Plans can be marketed and applications accepted for the following year’s enrollment.
  • : Jan. 1 – March 31. Medicare beneficiaries who chose Part D coverage can switch to an MA-PD program.

People who are aging into Medicare, are coming off group coverage, have just moved to a new service area, have Medicaid, or qualify for an SNP are eligible for additional enrollment or plan change periods. Most carriers will cover this with you during your training sessions.

Why should I offer MA or MA-PD plans?
The MA program offers an alternative to Medicare supplements, which some Medicare beneficiaries cannot afford or do not qualify for. Since MA programs are structured with Medicare, they have to be as good or better than original Medicare. The programs often provide additional benefits – such as dental, vision, hearing, and health club memberships — which are not included in original Medicare. Additional perks may also be available depending on the plan and carrier.

Also, because the plans change each year, you have a built-in opportunity to meet with your clients on an annual basis to review coverage, earn renewal commissions, and get referrals.

With the Medicare market growing and more people living longer, MA is an expanding market. The need for seniors to have health coverage is already there, and as an honest, ethical agent you can have great success serving the Medicare market.

Michael Gattorna is a senior market benefit consultant at American Alliance Insurance Group. He can be reached at 816-591-7377 or midwestbroker@yahoo.com.