Hospital Indemnity With Medicare
Selling a stand alone hospital indemnity with Medicare is a popular strategy. Hospital indemnity plans can be a great benefit for MA and MAPD enrollees that may struggle with the copays for inpatient hospitalization and outpatient stays. The information below will give agents a sound strategy to make more hospital indemnity sales with their MA and MAPD sales.
Why sell it with Medicare Advantage?
We will start with some information on why a MA enrollee may want to have a hospital indemnity plan. Obviously, there are copays associated with MA and MAPD plans for both non dual and non QMB enrollees. In some states, MA plans have a deductible and copays for inpatient admission. For example, in northeastern states, it is not uncommon to have a $1,000 annual deductible and then a $750 copay. So the first stay in the hospital can cost $1,750. Other plans will have a copay per day such as $350 a day for 5 days. These costs can be difficult for those that do not have expendable assets or cash on hand. There are a few things to keep in mind when it comes to inpatient cost share.
- Original Medicare has a 60 day benefit period. If someone goes into the hospital and pays the Medicare Part A deductible, they do not have to pay it again if they are re-admitted within 60 days. This is not the case with Advantage plans. (although many agents think it is) Advantage plans do not have a 60 day benefit period so re-admitted clients will face a new schedule of copays every time they are admitted until they hit the plans OOP.
- Hospital indemnity plans (we will use GTL as the example plan) can be tailored to cover these costs. The benefit will also regenerate of 60 days of being out of the hospital and the premium will never increase. For those in MA plans, this can save a great deal of money with a plan premium that usually is in the $30 to $40 a month range.
Hospital Indemnity with Medicare sales strategy
Review the Medicare Advantage plan with the prospect. Show them the inpatient hospital costs and remind them there is not a 60 day benefit period. Often times, a prospect will have a concern about the potential out of pocket costs they could incur.
If they are concerned, show the an alternative that would cover inpatient in full. A Medicare supplement plan N or G can be used as an example since the both cover the hospital cost in full. Show them the Medicare supplement premium. Using CT as an example, a plan N is $160 a month. Let them know for $160 a month they would no longer need to worry about inpatient costs. They will likely balk at the premium of a plan N or G.
Tell them you have a middle of the road solution that will cover the hospital copays and will cost less per month. That is when you use the GTL hospital indemnity plan as a middle option. “I have a way we can take care of the hospital copays for about $40 a month.” Offering the Medicare advantage and the hospital indemnity plan will be a good compromise. Show them how you will use both plans to create this benefit.
Hospital Indemnity with Medicare: Benefits to the prospect and agent
The prospect benefits by this strategy because they have much less out of pocket risk for hospitalizations and they will pay much less than the cost of a plan N or G supplement. The agent benefits by having a good solution for the client and by receiving additional compensation. Keep in mind, Indemnity plans will pay during the AEP. AEP can be challenging for agents because they do not receive payment for AEP business until January. The indemnity plan will pay during AEP which can help the agent with cash flow.
Quoting hospital indemnity plans on our quote site
Our agent quote site allows you to quote the GTL (and others) along side of the Medicare Advantage plans. This makes it easy to get a rate and match the indemnity plan benefits with the inpatient copays of the MAPD plan. GTL also has an easy to use online enrollment site for agents. They can use it either at point of sale or over the phone. They also allow paper applications for old school agents like myself.
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