Medicare Supplement Plans

Medicare states that the best time to purchase a supplemental plan is when your client first gets their Medicare Part B plan. That is because they do not have to answer any health questions. Should they choose to go without a supplement or go with an Advantage plan when they get Medicare, they could be declined based on health questions if they want a supplemental plan in the future.

Since none of us have a magic crystal ball, the supplement plan offers certainty of benefits, less risk, no networks and peace of mind for the future. The question really is “why wouldn’t my clients want a Medicare Supplement plan?”

Rate increases are expected with Medicare Supplements, and it is important to make sure your clients are aware of them as well. As an agent, it is part of your job to make sure that your clients are not blindsided, because it will ultimately come back on you. Set realistic expectations regarding Medicare supplement rates because rates so typically go up every year. 

Agents often neglect to tell their clients about these rate increases in order to make the initial sale, but this will come back to bite them in the long run when the clients decides to work with another insurance agent after being blindsided by rate increases.

As an agent that is looking for a plan to offer to customers, find a company that is:

Other things to look for are companies that provide household discounts and have no application fees.

Medicare supplement insurance was brought under federal oversight after Congress passed the Omnibus Reconciliation Act of 1980. This introduced Medigap plans A-J.

In 1998, high deductible plans were added to Medicap plans F and J, which brought the new total of Medicare Supplement plans to 12.

Medicare Prescription Drug Improvement and Modernization Act of 2003 initiated the first significant changes that would go into effect in 2006. Prescription drugs were included in Medicare supplement plans under Medicare Part D. Because of the modification, standard plans H, I, and J could no longer offer prescription drug coverage. It also introduced the first cost sharing plans, Medigap Plan K and Medigap Plan L.

With the new plans, a percentage of covered expenses was paid by the policyholder until a maximum out-of-pocket limit was reached.

Starting in 2020, Medicare Supplement Plans can no longer offer first dollar coverage. Specifically, they can’t cover the Medicare Part B Deductible. Medigap Plans C and F will be phased out.