Medicare Supplements

[Frank Stastny]

sman,

No, of course not. I don't know what state you sell in but that is definitely the exception, not the rule.

As more and more agents begin looking out for their clients best interests, and not at their own, I think we will see the premiums on Plan F begin to be reduced.

Premiums for the various plans are going to run in cycles. Right now United World has an F for $109.00 per month. Continental's Plan D is $93.25. Both are for a non smoking female age 65. Not much of a difference. However, I'll bet that within two years we will see at least a 25% to 30% increase in World's plan F. Continental's Plan D has been going up around 9% when they have an increase.

With Plan F being less expensive than a D or G in your state then you are doing what Kyle and I are; looking out for your clients best interest. Contrary to what the insurance companies tell us, I believe that is what we should be doing.

In fact, you are really doing your client's a favor at your own expense because you are not getting any commission at all on the excess charges part of the premium.

By the way. Am I the only one who feels that the agent should also get a commission on the policy fee? Expecially since our commission is not increased when the cost of the policy is increased.

 

[Guest]

By the way. Am I the only one who feels that the agent should also get a commission on the policy fee? Expecially since our commission is not increased when the cost of the policy is increased.

Could you explain this please?

Thanks,

Al

 

[Frank Stastny]

al3,

The companies I write for charge an extra $20 to $25 dollars in addition to the initial first month's premium. They call it a "policy fee".

In other words they are charging the new policy holder that much extra just for the privilege of taking a policy with that company. (I know, they claim it is to cover admin costs. Companies didn't use to do that and they still made a lot of money.)

Agents, at least I don't, receive any commission on the "policy fee".

When I sell a policy my commission is based on the premium at the time of sale. When the company increases the premium, my commission is still based on the cost of the policy at the time of sale. I do not receive commission on the increase.

If the premium was $100.00 at the time of the sale and the premium is now $150.00 I still only get commission on $100.00.

If insurance companies took care of their agents as well as we agents take care of our clients the world would be a better place.

 

[Guest]

While we are on the topic a (senior-citizen on Medicare) friend in Florida (where I'm not licensed) sent me the following about her supplement:

These are my contract benefits as listed on my card
Blue cross----1C
Blue shield---1C
I don't know if this refers to my plan---has been in effect since 1990.

When did med-sups get regulated by 'letter' (A, B,....etc.)?

Anyone know if this might be a standard C plan or perhaps something grandfathered in?

Thanks,
Al

 

[Frank Stastny]

I believe that Med Supp policies became standardized in either 1992 or 93. Before that companies could sell anything and call it a policy designed to supplement Medicare. Some people had four of five of them.

I have never represented BC&BS so I don't have a clue what that means. Maybe someone in FL can answer that.

 

[midwestbroker]

In 1992, there were 10 standardized plans (A-J)

In 2005, K and L came into effect

All plans prior to the 1992 change were not standardized, so it is hard to say what you have.

I would call either BCBS, or Medicare (since the plan had to be Medicare approved) to get an outline of coverage.

 

[sman]

sman,

No, of course not. I don't know what state you sell in but that is definitely the exception, not the rule.

As more and more agents begin looking out for their clients best interests, and not at their own, I think we will see the premiums on Plan F begin to be reduced.

Premiums for the various plans are going to run in cycles. Right now United World has an F for $109.00 per month. Continental's Plan D is $93.25. Both are for a non smoking female age 65. Not much of a difference. However, I'll bet that within two years we will see at least a 25% to 30% increase in World's plan F. Continental's Plan D has been going up around 9% when they have an increase.

With Plan F being less expensive than a D or G in your state then you are doing what Kyle and I are; looking out for your clients best interest. Contrary to what the insurance companies tell us, I believe that is what we should be doing.

In fact, you are really doing your client's a favor at your own expense because you are not getting any commission at all on the excess charges part of the premium.

By the way. Am I the only one who feels that the agent should also get a commission on the policy fee? Expecially since our commission is not increased when the cost of the policy is increased.

Frank,

I wasn't asking a question I didn't know the answer to. It was more for effect than anything else. It just bothers me when people make blanket statements like the one perfectchoice made below:

"I can not believe how many "gurus" seem dumbfounded when I tell them I never recommend the F plan. They are looking for high premium dollars if that is all they sell."

That same female you spoke of would be $92.17 for Plan F in my state. There is none cheaper. If I was looking for the "high premium" I wouldn't be selling United World's Med Supp. Also, United World only sells Plans A, B, F & G in my state. I would sell G if the price difference were greater. It's generally only $5-$6 per month cheaper. So I figure it's better to spend the $6 to get the Part B deductible paid and all of the Part B excess paid. Call me crazy, but I think that's just good math.

As for the commissions, yes they are low and yes it would be nice to not have $150 deducted from the premium before calculating commissions, but 16% of something is better than 100% of nothing. I don't like the fact that we don't get an increase when the premiums are raised, but I figure that will help in keeping the premium increases lower.

 

[midwestbroker]

However, there are a lot of people out there that will talk to their friends and their friends have plan F, so that is what they want.

Sure, you the stranger insurance agent can tell them otherwise, but they are going to listen to their friends first (most of the time).

 

[Frank Stastny]

Sman,

I agree totally with what you said. You do have your client's best interest in mind and I didn't mean that you didn't. You are also right about your commission. I will sell med supps all day for 16%, and if that keeps increases to a minium then I am also in favor of that.

Selling Med Supp insurance isn't about how much you are going to make on one sale, it is about the number of apps that are written. When I was captive my commission was 15% and my sales totals, dollars, were in the top 21 agents with the company. (They had about 3,600 captive agents at that time.) I did very well when I was with them. If you write enough apps you will make money.

I think what perfectchoice was referring to was that his managers and others were on his butt all the time for not selling Plan F. I use to take a lot of heat from everyone at the company when I was captive because I didn't sell Plan F. Everyone told me I was stupid for "leaving that much commission on the table". We all can only speak from out personal experience. Your situation is totally different.

If a Plan F was that price in Missouri I, like you, would jump all over it. I'm sure perfectchoice would also. That is the cheapest Plan F I have ever heard of. You are obviously doing a super job for your clients and I applaud your efforts. I sure didn't mean to imply anything else.

Sometimes when we try to communicate by typing and not by speaking something we "say" may sound good to us but others reading it may have a totally different take on what we were trying to say.

 

[Frank Stastny]

Midwestbroker,

I don't think of myself as a "stranger". I am the one who knows more about Med Supp's than all their friends put together. I am the "expert" at least in that house at that moment.

I hear that all the time from people I talk to. I patiently listen to what they have to say and then I explain, in plain language so they can understand, that they are wasting money and so are their friends.

I take a totally logical approach, and my presentation is designed in such a way that no logical, reasonably intelligent person can really argue with what I have told them. (The one thing in selling insurance that can't be overcome is ignorance, no mater what you say or how good you are. You will never sell those people, anything.)

All of a sudden I see the lightbulb come on and they are astounded that their current agent didn't explain any of that to them. Now what do you think they are going to do with that information? Yep, share it with all their friends along with my phone number.

That is where the selling part of being a Med Supp agent comes in. I never let the prospect pick or tell me what policy they want. I feel it is my responsibility to inform them and guide them to the one that is the best investment of their premium dollar. (I have actually stood up and started for the door when they told me they only wanted an F because that is what their friends have.)

There is a huge difference between presenting an Advantage plan and selling a Med Supp policy. They both have their individual challenges and the approach the agent needs to take when talking to a prospect. I'm sure I don't do nearly as well as you when presenting an Advantage plan. I know I don't because I haven't sold very many.

I find that prospects respect and refer me a lot more when I just don't write something that I know is not in their best interest.

I'll bet I could even convince you that in Missouri Plan F isn't the best one for your prospects.