Making Sense of Medicare: One Health Insurance Agent’s Approach to Educating Today’s Seniors

Let’s have lunch!

Lee Green is not your typical health insurance agent. Formerly the chief sales and marketing officer at a provider-sponsored plan, Lee took early retirement to start a new career doing the work he had overseen for years. After a two-year stint as a benefits consultant, he struck out on his own, focusing entirely on Medicare. On a mid-winter day, we met at a favorite restaurant for lunch. Our conversation ranged widely but primarily focused on three topics: Medicare beneficiaries, market trends and products, and—the lagniappe—Lee’s personal passion and rewards in this endeavor.

Medicare beneficiaries are confused!

Is my doctor/hospital in network? What’s a network? What happens if I travel? What’s the difference between Medicare and Medicaid? What does Part A, B, C, D mean? What are my options? The confusion and questions are countless, and that’s where Lee comes in. With his clientele split evenly between Medicare Advantage (MA) and Medicare Supplemental (MS) coverage, Lee has become the go-to resource for navigating through this maze of confusion. Once he has explained the basics, always in the context of his client’s level of knowledge, he proceeds to discover beneficiaries’ specific situations, needs, and preferences. As baby boomers continue to age into Medicare, coupled with the rise of consumerism in healthcare, it is extremely important to help beneficiaries understand their options in the market. Moreover, as providers consider launching their own MA plans, they will need to understand not only the MA market and the complexities of operating a health plan, but also the other options senior consumers face in terms of moving into Medicare. Brokers can play a large role in supplying that education to consumers.

It’s the network, stupid!

For clients who are loyal to their PCP, specialists, and/or hospital, the big question is who is in the network. These beneficiaries are typically directed to either an MA plan whose network includes their preferred providers (can be HMO, PPO, POS, etc.), or MS. Often seniors select MA because of the low/no premium and the limit on out-of-pocket expenses, as well as the supplemental benefits often found in MA plans—the most popular being dental, vision, hearing, gym membership, and over-the-counter (OTC) benefits for drugs and medical supplies. In contrast, higher income beneficiaries tend to select MS because there is no network restriction and they can tolerate the higher premiums. But if MS premiums increase as anticipated, and with popular F and C plans being closed to new enrollment in 2020 and beyond, Lee expects even more beneficiaries will convert to MA over the coming years.

Where is the market headed?

In the markets where Lee works, the most impactful trend is network disruption. Most beneficiary switching from one MA plan to another is due to network changes, so MA plans would be well advised to protect their networks at all costs. For example, a large outpatient provider network terminated its MA contract with a national payer just before AEP; as a result, the payer may have lost membership to a competing plan. MA members tend to stay with MA due primarily to three factors: attractive network, low/no premiums, and supplemental benefits. In another example, a provider-sponsored health plan successfully rolled nearly all of its cost plan members into one of its five new MA plans, largely because of the popularity of its regional network.

The number of MA plans offered is growing annually and there is significant variety in benefits, so most of Lee’s clients don’t understand many of the other value-add components of MA plans, such as a medical home, patient navigators, etc., hence the need for his services. In general, he envisions continued growth of MA plans, particularly with mid- to lower-income beneficiaries who are low utilizers. For high utilizers—particularly those with a higher income who want the ability to access any provider they see fit—he anticipates continued popularity of MS plans for those who wish to access centers of excellence where MS can be a preferred option.

Finally, in terms of MA HMO versus PPO plans, Lee finds that preferences depend on the breadth of the local HMO markets and the benefit design. A PPO might provide flexibility, with a higher premium but lower out-of-network (OON) benefits; however, OON physicians are not required to treat a plan’s patients and may refuse to do so, which of course creates the risk of member dissatisfaction. Some MA PPOs have high copays; one notable example is a national PPO with an OON inpatient copay of $270 per day for the first 20 days. Compared with a PPO like this, the HMO option can be very attractive. When an HMO has an excellent network, $0 premium, and a strong dental benefit, it becomes highly attractive. Some PPOs are fighting back with such innovations as Part B giveback benefits, which provide rebates for beneficiaries’ Medicare Part B monthly payments.

What’s it like being a Medicare agent?

Lee describes his work as the best of both worlds: he gets to help people while generating income. He likes being a “lifeline” for confused Medicare beneficiaries and is unafraid to recommend that they stay with a plan they like. He may not earn a commission in that instance, but he will create loyalty with clients. There is another benefit, getting out of the house: as his wife says, “I married you for better or worse—but not for lunch!” And after years of leading sales teams, he values the opportunity to interact directly and understand the members.

Understanding the consumer perspective is essential. Lee has built his business primarily via word of mouth and by experimenting with everything, from sitting at clinics and retail stores and presenting at senior housing seminars, to leveraging his significant network of professional contacts and his social media presence, and then carefully evaluating what works and what does not. He also spends six weeks each summer studying for recertification. One important element in the Medicare market is that Lee compares this field of work to that of a real estate agent: some are highly engaged and work full time, and some treat it more as a hobby. Lee highlights the difference between selling MA versus MS, particularly since agents with only MS experience don’t understand the local networks and thus are not typically successful selling MA. Organizations looking to launch MA plans need to understand how the broker community impacts marketing strategies for their market.

About half of his business is conducted during the Annual Enrollment Period (AEP), and the other half is comprised mostly of age-ins throughout the year (people turning 65). During his first AEP he had a very small signup rate; the next year it grew by 350%, primarily via referrals, and the third year it was up by 429%, with the growth primarily due to network disruptions. As Lee says, “It’s fun, I’m giving back to the senior community, plus it generates a nice retirement income in the process!”

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