The private Medicare plan market has its little problems, too.
A Medicare Plan Finder website update caused nightmares last year. The Centers for Medicare and Medicaid Services (CMS) is now requiring Medicare Advantage plans to take enrollees with end-stage kidney disease on the same terms that they take other enrollees, and that could cause claim cost headaches. And then there’s the issue of solvency.
But, in the short run, the annual election period for 2021 Medicare Advantage plan and Medicare Part D prescription drug coverage starts Oct. 15. Many coverage issuers that offer Medicare Advantage plans, Medicare drug plans and Medicare supplement (Medigap) insurance policies make a point of saying that they like agents, and pay agents, as opposed to using ropes of garlic and barbed wire fences to keep agents away.
About 23 million of the 62 million people who are eligible for Medicare have Medicare Advantage coverage, and about 14 million have Medigap coverage. Some of the other Medicare enrollees have other types of Medicare plans that are administered by private health insurers or by private health plan administrators.
Companies in the Medicare plan market are so enthusiastic about that market that, last spring, as the first COVID-19 wave was peaking, distributors put out press releases announcing that they were hiring a total of thousands of Medicare plan call center agents.
SelectQuote, an agency based in Overland Park, Kansas, is so focused on the Medicare annual enrollment period that it put out a national press release to announce that it has succeeded at hiring, and onboarding about 2,000 Medicare plan sales associates, to supplement the internal agents who normally handle sales of life insurance, senior health care, and property and casualty insurance products.
SelectQuote said its senior division makes about 70% of all of its new policy sales during the annual election period, which extends from Oct. 15 through Dec. 7, and another, more limited Medicare Advantage plan open enrollment period, which lasts from Jan. 1 through March 31.
Another major Medicare market player, Walmart, has ramped up involvement by setting up its own insurance agency, rather than simply depending on outside companies to help it sell coverage.
Insurers and distributors are so interested in the Medicare plan market partly because of long-term trends, such as the aging of the baby boomers; partly because the stabilizing effect of the government subsidies the Medicare program gets; and partly because, due to the subsidies and the nature of the products, the Medicare plan market the market is resistant to the calamities rocking many other insurance markets, such as low interest rates, hurricanes, windstorms and wildfires.
Here are five other things to know about what’s happening in the Medicare plan market heading toward Thursday.
1. The market looks competitive.
Getting a clear, broad picture of Medigap price trends is difficult, because the market is so fragmented, and state agencies are in charge of the rates.
UnitedHealthcare, a large issuer that’s part of UnitedHealth Group , has put out rate sheets showing that, in states like Alabama and Maine, its typical standard rates will be going up about 6% to 7% in 2021.
CMS has giant spreadsheets that show what’s happening to Medicare Advantage and Medicare drug plan prices. There, the average monthly premium is on track to decrease 11% in 2021, to $21.
The average basic premium for a stand-alone drug plan will be about $30.50, up from $30 per month this year.
2. Only about 31% of people aging into Medicare plan to get enrollment help from live humans.
GoHealth, a broker, came up with that statistic when it conducted an online survey, this summer, of 2,106 people who were ages 62 and older and not enrolled in Medicare, or ages 65 and older and enrolled in Medicare.
As competitive as the Medicare plan enrollment advice market is, a majority of people signing up for this complicated program plan just to waltz in there all by themselves, or with help from a relative, or Dr. Google, CFP. (See the slideshow above for more details.)
Perhaps partly as a result of that lack of live-human advice, 19% of the GoHealth survey participants with Medicare said their plans are not meeting all of their health care needs.
Six percent don’t even know if their Medicare coverage is meeting their health care needs.
3. Agents and markets in the field are feeling the effects of the increased level of competition.
Jesse Slome, director of the American Association for Medicare Supplement Insurance, said in a written response to an email interview that the “pace of change has been greatly accelerated compared to a year ago.”
“There is accelerated consolidation and acquisition of companies that will give larger national distributors significant competitive advantages,” Slome said.
Distributors that sell directly to consumers “are out from the shadows and now a significant part of the industry,” Slome said. “For the typical agent/broker, COVID-19 is forcing even the most technology0resistant to accept and adopt changes in how they market and enroll if they plan to still be in business going forward.”
4. COVID-19 itself might not have that much effect on experienced retail agents.
Lindsay Engle, a Medicare market tracker who works for MedicareFAQ.com, an Elite Insurance Partners website, said in response to an email interview that the image of local agents meeting with clients at a kitchen table, or at a table in a drug store, is off the mark.
“Social distancing won’t have much of an impact, since most sell over the phone,” Engle said.
Engle is also skeptical about the idea of the big call centers crowding out experienced local agents who have been successful in the past.
“Most agents that don’t work in a call center are selling out of their home calling leads themselves, as an independent agent,” Engle said. “The benefit of working out of a call center is you don’t have to generate your own warm leads, they are generated for you. A lot of them working out of their homes work with a lead gen company as well — the same lead gen company that sells to the call centers that buy them v. generate themselves in house. So, technically they are the same leads.”
5. At least some in the private Medicare plan sector are excited about the idea of the election leading to “today’s Medicare program for more.”
The administration of President Donald Trump has been skeptical about the idea of expanding eligibility for Medicare.
Sen. Bernie Sanders, an independent from Vermont who caucuses with the Democrats, has proposed a single-payer “Medicare for All” program that, if implemented as written, would eliminate the current version of Medicare. Sanders’ bill would also eliminate the need for Medicare Advantage and Medicare supplement insurance coverage, and it would ban the sale of any product that would compete with the coverage offered by his universal health coverage program.
Joe Biden, the Democratic nominee for president, has opposed Sanders’ Medicare for All proposal. Biden is supporting what appears to be a much more popular coverage expansion proposal: lowering the eligibility age for the current version of Medicare to 60, from 65.
Slome said lowering the eligibility age for the current version of Medicare to 60, or even lower, could be great for Medigap issuers.
“Looking ahead, the growth potential for the industry is enormous,” Slome said.
If the federal government really cuts the regular Medicare eligibility to age 60, “that will result in an immediate growth of the market by 20.5 million,” Slome said.
— Read The Marketing Alliance and EHealth See Commission Revenue Holding Up, on ThinkAdvisor.