How to sell Medicare
If you ever thought about starting your own business, you might want to know How to sell Medicare. This post will benefit anyone who wants to be an independent agent. In other words, an agent who owns their own business and works as a General Contractor. The post does not focus on those who work as a sales person for a specific insurance company.
Who are we; Crowe and Associates is an independent insurance FMO. We provide our agents ongoing support by offering them; training, contracting, online quoting tools and a free lead program. If you are just starting out with Medicare sales, call us to learn what a career in Medicare sales is all about.
Please take a look at our outline of how to start your own Medicare sales business.
How to Sell Medicare:
- Is a career in Medicare sales right for you?
- Medicare basics.
- What products do you want to sell and how to sell them.
- Contracting and annual certifications (Click here for contracting kit)
- Marketing and generating sales opportunities
- Sales Presentation for face to face meetings
- Online quoting engine free for contracted agents
- Free Medicare lead program – lead types
1. How to sell Medicare; The good and the bad of Medicare Sales
There are challenges with Medicare sales as with any sales career you choose. It can be difficult to get yourself started and organized. The biggest challenge with any sales career is finding enough prospects to make your business profitable. You must be comfortable as well as knowledgeable when you talk about the products with potential clients
Many agents say they cannot find enough viable sales opportunities. It is very important to understand that getting in front of enough people will be one of your biggest challenges.
Agents must complete annual carrier certifications in order to sell Medicare Advantage and Part D Rx plans.
This can be time-consuming and some people are not willing to do it. You must complete the certifications in order to fully understand Medicare and the plans you are selling in order to show prospects what they need. (Also need to do the certification before you can sell the product)
There are many good reasons why someone would want to have a career in Medicare sales. The first is; you really are not selling anything. Most people will enroll in some type of Medicare program; either an MAPD, Medicare Supplement and/or a Medicare PDP plan. You do not need to sell them on that concept, in most cases, they already know they need a plan. Your role is to help them figure out which choices will best suit their needs.
Once your client decides which plan/plans are best, you will help get their application submitted and make sure that any question they have are answered. You do not charge your clients for your services as you will receive commission from the company they sign with as your payment. The premium payment is the same to the client either with or without you as their agent. Medicare sales is more like a consultation than an actual sale. Like Auto and Home insurance, Medicare is something they must have so there is no convincing needed.
Another good part of Medicare sales is the recurring commission/revenue that your Medicare book of business generates.
Once you build up a good size client base, their plan renewals offer a good deal of recurring compensation. This can become a large portion of your annual income. When this is the case, you will not need to sell every day in order to receive a paycheck. If you are a hard working, successful agent; you can build a book of business with 500 clients in only 2 to 3 years. A book of this size can generate renewal income of $120,000 a year. Many successful agents realize they need with time and patience to learn the business. Once these skills are mastered, you will be rewarded with a satisfying and profitable career.
2. Medicare basics; understanding Original Medicare:
If you want to be successful selling Medicare, you must understand how original Medicare works. Without a thorough understanding of original Medicare, you will not be able to explain it to others. It is very important to know how Medicare A and B work to understand how a Medicare supplement, Medicare Advantage and Medicare Part D plan work with those plans.
Medicare A and B: People become eligible for Medicare A and B the first of the month they turn 65. Everyone is automatically enrolled in Medicare Part A. Medicare Part A is hospitalization insurance. In most cases people are not charged for Medicare Part A. If the person is drawing Social Security payments at the time they turn 65, they are also auto enrolled in part B. There is a standard monthly cost for Part B. The cost is taken out of the client’s Social Security check every month. If the person has not elected Social Security payments yet and they do not have access to health coverage through employment; they will need to sign up for Part B. If they sign up for part B, but do not collect Social Security, they receive a quarterly invoice.
To view 2020 Medicare A and B benefits:
3. How to sell Medicare; Determine what and how you want to sell:
It important to figure out what kind of medicare plans to offer and how to market them. If possible, it would be best to offer Medicare Advantage, Medicare supplements and Medicare Part D Rx plans with the competitive companies in your sales area. The reason we say this is; the more options you can offer your client, the better chance of finding the best plan for their needs. While this is ideal, not all agents do it this way for a couple of reasons.
Some agents sell supplements only to avoid certifications.
Some agents sell only Medicare supplement plans just to keep things simple. This works fine; however, you will be walking away from sales opportunities by not offering part D Rx plans or Advantage plans. On the other hand, if you offer supplements only, you do not have to answer benefit questions. You also do not have to do certifications or understand rules of engagement. This is just a matter of preference. Some agents start off with just a couple companies until they get the hang of the business and then add carriers either when they are ready or as needed.
- Medicare Supplements do not require any annual certifications but, Advantage plans and Part D Rx plans do. An annual product certification is required for every company’s advantage plan and/or Part D Rx you plan to sell. This can be time-consuming. Most companies require you to do an annual AHIP certification if you want to sell their Advantage and Supplement plans. The one exception to the AHIP requirement is for United Healthcare. Agents can sell UHC Medicare Advantage and Part D plans without completing AHIP.
- The more companies you offer the more difficult it is to keep all the benefits, rules and intricacies of each one straight. Additionally, when you market MAPD and Part D plans, you must follow certain rules to remain compliant. Medicare supplement plans do require annual certifications and do not have rules of compliance in order to sell them. CLICK TO LEARN MORE ABOUT TAKING AHIP
4. How to sell Medicare: Compensation:
In most cases, the compensation for Supplements is straightforward. Many companies pay commission based on a percentage of the premium. The percentages ranges anywhere from 12% to 20%. This varies by carrier and the supplement. Most carriers either do not pay comp or pay very little comp on Medicare eligible applicants under the age of 65.
Most supplement companies pay a 9 month advance on the premium and, in most cases, renewal comp is paid at the same rate as the initial compensation. Some Medicare supplement companies only pay commission for a certain number of years. Six years of payouts is common for carriers that limit payout years. This means, you will only receive renewals for a set number of years.
CMS sets the commission rates for both Medicare Advantage and Medicare Part D each year.
Because of this practice, it is easy to know what the payouts for an Advantage or Part D sale will be for the year in any state. CLICK HERE FOR THE 2020 MAPD AND PDP PAYOUT AMOUNTS
Please note; if you sell a Medicare Advantage plan to someone who does not currently have a MAPD plan, you receive the full allowable payout. If your client is already on a MAPD plan, you receive 50% of the full comp. All renewals pay at 50% of the full comp. LEARN MORE ABOUT HOW MAPD COMMISSION IS PAID OUT
Most companies pay commission a week or two after you write the case.
Most companies do not make you wait until the plan is effective to pay you. Although, during the Medicare OEP, companies hold all commission payments for cases written in OCT, NOV and DEC for a January 1 start date. These cases are paid out in January. During the year, companies pro rate the commission payments. Your renewals will always start in January. This is the case regardless of what month you placed the case.
Please be aware: Some agencies will take a portion of your commission. For that reason; you should choose an up-line that pays at the full street commission level. It is also a good idea to check that you will receive your payments directly from the insurance carriers.
5. Medicare sales contracting and annual certifications
Contracting with Crowe and Associates is easy; you will need to submit only 1 contract to be appointed with most companies. Once you fill out your contract, this will allow us to appoint you with any company you choose now. In the future, you can easily add carriers by simply sending us an email request. CLICK THIS LINK FOR CROWE AND ASSOCIATES CONTRACTING.
Please note: A few companies only use their own contracting link. If that is the case, we will have them send you links to be contracted via email.
Send complete contracts back to us either by fax at 203-567-6235 or email to Lisa@croweandassociates.com.
Individual agents, fill out the contract with your personal information. Please include a voided check for the account you want commission payments to go to. You will also need to include a copy of your E and O insurance as well as a copy of your insurance license.
To contract as an agency; Your agency must have an insurance license. You also need to have a licensed,certified agency principle in order for the agency to receive commission payments. This applies to both Medicare Advantage and Medicare part D plans. If the agency principle is not willing to do the certifications, listed someone who is willing to do the certs as the principal.
Agencies can choose to have employee/producer commissions paid to their agency.
Just have each employee/producer fill out a commission assignment form at the time of contracting. Agencies can also have the street level commission paid directly to the agent/employee and have the GA level override paid directly to the agency. Agencies must meet certain requirements to be set up at a GA level.
If you sell either MAPD plans and/or stand-alone part D Rx plans, you must take annual certifications. Each carrier will provide a link or website for you to complete your annual certifications once you are contracted to sell their plans. If you need to locate a list of where to go for each company, you can find them at pfsinsurance.com. Just click on the compliance tab and then click on the certifications tab. You will need a username and password to access this. Call our office at (203)796-5403 to get yours.
What is AHIP:
AHIP is a designation you must take and pass it every year in order to sell MAPD and PDP plans. There a different modules that make up the AHIP test. The modules include a Medicare training course, Fraud, waste and Abuse (FWA) and CMS general compliance. The cost for the AHIP is $175 however, if you take it through a carrier, (UHC, Anthem, Aetna Humana, ect) you only pay $125
If you are new to Medicare sales and need to take AHIP after July, it would be best to wait and take the new AHIP. The new AHIP comes out in July each year. It will count for the following year as well as the remainder of the current year.
United Healthcare is one of the few companies that does not require you to take an AHIP course every year.
You are not required to do annual certifications or AHIP if you are selling only Medicare supplements. Although, UHC AARP Medicare supplements do require certification through the UHC certification portal.
NOTE: After you finish your contracting and certifications, you need to order sales supplies from the carriers you are appointed with. Pinnacle financial can place your orders for you. Just call them at 1-800-772-6881.
Note: our agents have access to a FREE personalized, online quoting/enrollment platform called Connect4Medicare CLICK HERE TO LEARN MORE
6. Marketing and sales generation
- If you are already a broker in the health business, your clients will age into Medicare eventually. Your clients will have friends and family members who may need Medicare plans and if they already know and trust you, they will automatically think of you if someone asks for a recommendation. Be sure to put a note on your calendar four months prior to your clients or their spouses turning 65. You can put the notes in years in advance. Once they are 3 months away from their 65th birthday, they will get a ridiculous amount of calls and mail. You a able to submit a Medicare plan 3 months prior to the month you turn 65. That is why you should contact them early.
Do you already offer group health insurance?
- If you do, you can also work with anyone coming off the group plan for retirement or coming off the plan at 65.
You can purchase mail response leads.
- These leads are postcards that a prospect fills out and sends back in order to receive information. This type of lead is a little more difficult to be successful with but with the right amount of persistence it is possible.
If you are trusted and respected by your clients, they will refer their friends and relatives to you.
- This is very common with medicare products. Many agents give clients referral gifts to thank them for sending them business. Be aware that Medicare has rules in place when it comes to giving gifts out.
Online leads can be very profitable.
- However, it takes a lot of preparation to work this type of lead. Click here for more details about how to work online leads.
Seminars can be a great way to generate Medicare sales.
- Some of the large carriers will cover seminar costs for you. This is easier to do if you build a good relationship with the local broker manager. If you do this; when you want to do a seminar, the carrier will pay for advertising, send out the invites and coordinate the event for you.
7. Face to Face Sales Presentations:
This is a more challenging idea for some people than others. Please click on the link below to view our webinar:
8. FREE online quote/enrollment tool:
All agents who contract with our agency have access to the online quoting tool at no cost. This tool allows you to compare MAPD, Medicare Supplement and Part D plans in minutes. You can also quote term and UL life insurance, final expense and long term care. You can access this site with a user name and password. Call our office at 203-796-5403 to see what this site can do. Just ask us to get you a username and password.
9. How to sell Medicare: Free Medicare lead program
We offer a free Medicare lead program. This program is available to any agent or agency that is has us as their up-line on all their Medicare plan sales. There is absolutely no reduction in your compensation. You receive compensation directly from each carrier. There are no production minimums to participate. You can use our lead program with any program that you choose to use to generate Medicare sales. This includes, mail leads, seminars, billboards, print ads, etc. Send us your paid receipts each month and we will reimburse 100% of your costs up to $500 a month. There is no catch. FREE MEDICARE LEAD PROGRAM DETAILS