Hospital Indemnity Plans With Medicare Sales
A hospital indemnity plan can easily be included with most Medicare Advantage and Supplement sales when positioned the correct way. A few quick adjustments to the normal Medicare Advantage or Medicare supplement presentation is all it takes. To understand the strategy it is important to understand hospital indemnity plans first. We utilize GTL for our go to hospital indemnity plan so we will use them in the example. This strategy is a great way to both give your clients a better deal and make an extra commission along the way. Read more about Hospital indemnity plans with Medicare sales below.
What is a hospital indemnity plan?
A hospital indemnity plan is an insurance policy that pays a daily cash benefit for hospital confinement. The amount of the payment and number of days it will pay can be adjusted. GTL offers amounts from $100 to $600 a day and benefit periods of 3,6,10 and 21 days. The benefit is not a reimbursement but simply pays the stated benefit for every day of hospitalization. The 3 and 6 day benefit will also pay for short duration hospital stays such as being under observation or for treatment in an ER. Plans are guaranteed issue for ages 64.5 to 65.5 and simplified issue at all other times. Rates can not go up and the plan is guaranteed renewable. Benefits recharge after 60 days of no hospital confinement.
How much do they cost?
As an example. A 6 day benefit at $400 a day for a 65 year old costs $36.22 a month. A 70 year old would be $44.48 a month. (rates do no go up once they buy the plan at a given age)
How do you incorporate it into an MAPD or Medicare Supplement Sale?
MAPD Example- This is assuming an MAPD is the right type of plan for your client or prospect. Show them a $0 premium MAPD plan. Assume the plan has a $395 a day copay for hospitalization up to 4 days. This is a potential $1,580 out of pocket for your client. Also, if they go back in after 60 days, they will need to pay the copay again. If they want to reduce that risk, you can show them a more expensive MAPD with a lower hospital copay. For example a $99 a month plan with a $125 a day for 10 day hospital benefit or a Medicare supplement plan N that covers hospital in full but costs $150 a month.
MAPD and GTL plan strategy
As an alternative, show them a way they can have an MAPD plan with no hospital copay as well as a premium of only $36.22 a month. ($0 premium MAPD and a $400 a day for 6 day GTL plan) Using this strategy, they will receive $400 a day for up to 6 days. If they go in for 6 days, they will pay $1,580 for the MAPD copay and receive $2,400 from GTL. If they go back in 60 days or more later, the GTL will pay out again. This works for the client and the broker will also make an extra commission of $260.40 from GTL plus receive a renewal payment in future years.
Medicare supplement example
You could sell a client a Medicare supplement plan F, G or N. All three will cover hospital in full but the monthly premium will be at least $146 a month (using CT rates as an example) As an alternative, you could show the client a plan High F or Plan K supplement. Premiums for those plans are around $60 a month. Both leave the client paying some or all of the hospital deductible of $1,313 however. (payable again if they are re-admitted after 60 days) In fact, you could give your client a GTL 3 day benefit plan for $600 a day for $39.16 a month. This would give them a medicare supplement with coverage for the hospital deductible for about $100 a month.