Quick Tip: Don’t forget the 48-Hour Rule

November 8, 2012

No, I’m not talking about the 48 hour “cooling off period” or the new 48 hour requirement regarding when Scope of Appointment Forms must be obtained for a Medicare Advantage or Part D appointment. While CMS applies this time frame to just about everything these days, this is specific to enrollment submissions.

To put it simply, the “48 hour rule” means that all enrollment applications should be submitted to the carrier within 48 hours of receipt by the agent.  It should be noted that the 48 hours are calendar hours, not business hours so weekends and holidays count as well.

Furthermore, if you are working with a carrier that requires you to submit your enrollments to your upline for processing, you need to make every effort to have those submitted within 24 hours so they can submit them to the carrier within the 48 hour window.

The reason behind the “48 hour rule” is to allow the carriers ample time to process the enrollment on their end before they have to send it to CMS. Carriers have seven calendar days to do this. Since Star Ratings are tied to latency for the first time this year, you should expect that carriers will be making a push to get as many enrollments submitted as possible within that 7 day window. This could result in disciplinary action for agents who consistently fail to submit their enrollments within 48 hours.

So, as you are submitting enrollments this AEP, make sure you keep the “48 hour rule” in mind. And again, if your enrollments go to your upline first, submitting them within 24 hours is ideal.

How to Order Your 2012 Medicare Advantage Enrollment Kits

October 12, 2011

We recently sent out several email blasts letting agents know how to pre-order enrollment kits. Below are links to those emails for companies that have provided their order procedure details. Carriers continue to provide us with information.  Be sure to check back for updates.

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Future Growth of Medicare Supplements

April 26, 2011

CSG Actuarial recently published a research paper entitled “Medicare Supplement: 2010-2020 Market Projection”.  In this research paper, CGS analyzes Medicare Supplement policy numbers from the past five years and gives projections on the growth of policies through 2020.

First off, if you sell Medicare Supplements, you should read this report.  CGS does a great job of explaining the market.  It’s packed with easy to understand information, graphs and data tables.  It only takes about 15 minutes to read and it gives you a better understanding of who is buying Medicare Supplements and why.

If you don’t have 15 minutes, below are my “CliffsNotes”:

The total number of Medicare Supplement polices has declined over the last five years.  CGS suggests three reasons for the decline:

  • Medicare Advantage enrollment increased from 4.8 million (2004) to 11.9 million (2010).
  • The cost of Medicare Supplement plans has increased since 2004.
  • The number of Medicare Part B beneficiaries has decreased.

Despite the declines of Medicare Supplement polices of the last five years, CGS concludes there will be a year over year increase in policies through 2020.  They list four primary opportunities for growth:

  1. Baby Boomers
  2. Medicare Advantage Reductions
  3. Decrease in Retiree Health Benefits
  4. New Medicare Supplement Plans

I’ve only posted a high level summary.  CGS’s research paper goes into more detail and provides data for each of the reasons and opportunities listed above.  Trust me; it’s worth the time to read it.

AP Article: Obama administration eases pain of Medicare cuts

April 20, 2011

Here is some good news to brighten our day.

The AP published an article last night (4/19/11) outlining the Obama administration’s plan to “ease the pain of Medicare cuts”.   The Health and Human Services (HHS) department is going to award quality bonuses to hundreds of plans that only have “average” star ratings.  The author compares HHS’s new methodology to grading on a curve.

What does this mean for you and your customers? 

For 2012, your customers will likely see benefits stay the same or improve.  The Medicare Advantage market is so competitive that companies will have to squeeze in more benefits to make sure they are hitting their enrollment goals.  It may also lead to less turmoil in the market place.  Sure, some plans are going to exit no matter what HHS does, but there are other plans that need just a little bit more margin to stay in a given market place.  It would be a welcome change of pace to not have to move your customers to a new Medicare Advantage plan during the 2012 SEP/AEP.

Below are a couple quotes from the article:

    • “The insurance industry says the bonuses will turn what would have averaged out as a net loss for the plans in 2012 into a slight increase.”
    • “The net result is that the boat didn’t get rocked.”

Here is a link to the AP article:

Obama administration eases pain of Medicare cuts

Medicare Supplement Sales Grew in 2010

April 15, 2011

Deborah Donahue, of Mark Farrah Associates, recently published an article analyzing the growth of Medicare Supplement sales in 2010.  Ultimately, the reduction in Medicare Advantage Private Fee for Service plans, the introduction of Medicare Supplements Plan N and Plan M, and the release of Modernized Medicare Supplements all contributed to the overall growth in 2010.

Click Graphic to Enlarge Source: MFA's Medicare Supplement Market Data; Health Coverage Portal™

Donahue also breaks down the Medicare Supplement market by company.  UnitedHealthcare owns a surprisingly high 32% of the market share.  When you add in Mutual of Omaha, these two companies own 43% of all Medicare Supplement polices.   What is the saying?… “So go these companies, so goes the market”.  As these two companies make changes to rates, underwriting and commission other companies are surely to follow.

Click Graphic to Enlarge Source: MFA's Medicare Supplement Market Data; Health Coverage Portal™

Lastly, Donahue also breaks down the Medicare Supplement market by plan type.  It’s not surprising that Plan F makes up 44% of all plans.  What is interesting are the numbers of Plan N and Plan M that have been sold since June 1, 2010.  Donahue writes, “Newly offered Plan N gained 147,912 members since June 2010 when it was introduced. Plan M did not fare so well, with only 265 covered lives.”

If you are selling in the Medicare Supplement market, you should read this article.  Deborah Donahue at Mark Farrah Associates does a fabulous job of breaking down the Medicare Market in a quick and easy to understand manner.

Here is a link to the Article: Growth in Newer Medicare Supplement Policies Continues

Health Care Reform and Agent Commission

March 17, 2011

As you probably know, commissions for the underage health market have seen significant cuts due to Health Care Reform. Now the question is; Will Medicare Supplement, Medicare Advantage and Medicare Part D commissions see the same cuts? There are pretty good arguments on both sides, but I’ve read two articles this week that show encouraging movement in regards to agent commissions. If this kind of movement for the underage market can continue, commissions for Medicare products are less likely to be affected.

Here are links to the articles:

National Underwriter: NAIC Panel Seeks Producer Commission Comments

NAHU Washington Update: NAIC Working Towards Legislation to Remove Agent and Broker Commissions from the MLR

Mutual of Omaha Announces Changes to Medicare Supplement Plan N Underwriting

February 2, 2011

Mutual of Omaha has announced underwriting changes to their Plan N Medicare Supplements.  This will affect all Mutual of Omaha companies including United World and United of Omaha.  Exceptions will include New York, where health questions may not be asked (per state regulations) and in open enrollment or other guarantee issue situations where health questions normally do not apply.

New Applications

The underwriting changes will also bring about new applications.  Where the new applications are already approved, the new underwriting guidelines will be effective with applications signed on or after February 16th 2011. The states are where the new applications have already been approved are:

United World:  AL, MD, MN, MT, ND, NJ, NM, PA, UT & WY

United of Omaha:  AR, AZ, GA, IA, ID, IL, IN, KY, LA, MI, MO, MS, NC, NH, OH, OK, OR, SC, TN, TX, VA, WV & WI

Commission Changes

This change will also affect commissions on Plans M and N.  Mutual of Omaha will have new commission schedules available shortly, but you can expect commissions on all plans to be uniform.

Here is a link to the announcement from Mutual of Omaha and more detailed information.

Even with these changes, Mutual of Omaha will continue be a leader in the Medicare Supplement marketplace.  That being said, this will open up many new doors to other Medicare Supplement companies that want to offer guarantee issue or limited underwriting plans.

Now the question is where do you put your clients who have health issues?  Do you wait until the Medicare Advantage AEP and put them in a plan then?  Or perhaps look for other Medicare Supplement companies with more lenient underwriting? 

One thing is for sure, it is important for agents to keep up with as many carriers as possible with the ever-changing Medicare market.  The slightest difference in underwriting can mean a declined or approved application for your client.

If you have any questions regarding Mutual’s changes, please feel free to contact us or reply below.


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