Jeffrey Wade
Medicare supplement insurance, also known as Medigap, is additional insurance that covers what Medicare does not, such as copayments, coinsurance, and deductibles. Medicare supplement insurance agents and brokers must be licensed by the state and must follow specific marketing rules. While Medicare does not send people out to sell more insurance, there are many independent agents and brokers who sell Medicare supplement insurance plans. These agents and brokers can contact people through direct mail, phone calls, or in-person meetings, and they are paid commissions for each sale or enrollment.
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What You'll Learn
Medicare marketing rules
Medicare marketing guidelines are in place to ensure that Medicare Advantage plans (MAPs) and Medicare Part D plans (PDPs) are marketed appropriately to beneficiaries. These guidelines are set by the U.S. Centers for Medicare and Medicaid Services (CMS).
The CMS has expressed concern over certain MAP and PDP marketing practices, identifying instances of misleading, confusing, and inaccurate information being provided to beneficiaries. In response, the CMS issued a final rule in April 2023, revising the regulations governing marketing by MAPs and PDPs. These changes are applicable for all contract year 2024 marketing and communications beginning on September 30, 2023.
The new Medicare marketing requirements include reforms such as:
- Advertisements cannot mention a specific plan name or use the Medicare name or logo in a misleading way.
- Plans must notify enrollees annually and in writing of their ability to opt out of phone calls regarding MAP and PDP business.
- The prohibition on door-to-door contact without an appointment still applies, and SOA cards cannot be collected at educational events.
- TPMOs must list all the MAP or PDP sponsors they represent in marketing materials.
- Plans must require agents to explain how an enrollee's current coverage will be affected by their enrollment choice.
- Plans must implement an oversight plan to monitor agent/broker activities and report non-compliance to CMS.
In addition to the CMS guidelines, there are other rules that Medicare plans and their agents must follow when marketing to beneficiaries. These include:
- Not coming to a beneficiary's home uninvited to sell or endorse anything.
- Not calling a beneficiary unless they are already a member of the plan or have given permission to be contacted.
- Not requiring beneficiaries to speak to a sales agent to obtain information about the plan.
- Not offering cash or gifts worth more than $15 to join a plan or providing free meals during a sales pitch.
- Not asking for payment over the phone or online; a bill must be sent instead.
- Not asking beneficiaries to provide names and contact information for friends or family for sales purposes.
- Providing written information with a complete description of how the plan works.
- Making clear that there is no guarantee that a doctor or hospital will accept the plan's terms and conditions.
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Medicare sales commissions
Medicare does not send people out to sell more insurance. However, Medicare does have marketing rules for health plans, and independent agents and brokers selling plans must be licensed by the state. These agents and brokers are sometimes employees of the contracted company, but they may also be hired independently. Generally, agents and brokers receive an initial payment in the first year of the policy and half as much for the second year and beyond if the member remains enrolled.
The Centers for Medicare and Medicaid Services (CMS) set the broker commissions for Medicare Advantage and Medicare Part D annually, based on the fair market value. For 2025, the national maximum broker compensation rate for MA sales will be $626 for initial sales and $313 for renewals. The 2025 PDP national maximum broker compensation will be $109 for initial sales and $55 for renewals. These rates vary by state and region. For instance, in CT, PA, and DC, initial Medicare Advantage commissions for 2025 will be $705/member/year, while in CA and NJ, they will be $780/member/year.
There are various ways to sell Medicare, including direct mail, which is the most common lead source, and over the phone.
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Medicare sales techniques
Firstly, it is crucial to understand the target market. Agents should review the demographics of their target area, including the number of people turning 65, average household income, and the percentage of homeowners. This information can help tailor the sales approach to the specific needs and preferences of the target audience.
Generating leads is a fundamental aspect of Medicare sales. Direct mail is a common and effective lead source, where agents can send out mailers or lead cards to potential customers. Utilizing digital marketing techniques, such as pay-per-click campaigns, social media advertising, and SEO, can also help reach a wider audience and draw traffic to informational resources. Local advertising in newspapers, radio stations, and community bulletins can address common Medicare questions and concerns, providing valuable information to prospective clients.
Building trust with clients is essential for successful Medicare sales. Agents should focus on the client's needs, simplify complex information, and provide clear, honest guidance. Asking questions about health needs, prescriptions, and budget, while showing empathy and patience, can help establish trust and showcase expertise.
Additionally, Medicare sales often involve a combination of phone, SMS, email, and in-person interactions. Utilizing an autodialer can increase the speed of connecting with potential customers over the phone, and a voice signature can streamline the sales process by allowing clients to sign applications verbally. Face-to-face interactions, such as hosting seminars and webinars, provide opportunities for personal connections and building trust with prospective clients.
Furthermore, Medicare sales agents should be mindful of the marketing rules and regulations set by Medicare. For instance, agents cannot require customers to speak to a sales agent to obtain information about the plan, offer cash or gifts to join their plan, or ask for payment over the phone or online. Adhering to these rules ensures ethical sales practices and protects the rights of potential customers.
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Medicare sales tools
Medicare does not send people out to sell more insurance. However, there are independent agents and brokers who sell Medicare plans. These agents and brokers must be licensed by the state, and they must follow specific rules when interacting with potential customers. Some of the rules that agents and brokers must follow include not charging a fee for processing a client's enrollment in a plan, not steering clients towards a particular plan, and not communicating incorrect information about the plan.
Marketing and Lead Generation:
- Direct mail is a common and effective lead source for Medicare Supplement leads. Agents can purchase lists from a T-65 Lead database, design mailers, and send out a minimum of 1,000 mailers per week.
- Referrals are an important part of sales success, and agents should not overlook asking customers for referrals.
Sales Tools and Software:
- CRM (Customer Relationship Management) software is essential for managing client data securely and efficiently.
- Organization software tools help agents stay on top of pending items, track client renewal dates, and communicate updates with team members.
- Password managers protect agency security and save time by allowing quick logins.
- EContracting solutions speed up the appointment process by allowing contracts to be completed online.
- Quoting and enrollment platforms, such as PlanEnroll, provide up-to-date pricing and plan details, allowing agents to streamline enrollments and maximize sales.
Online Presence and Website:
A client-friendly and informative website is crucial for Medicare agents to establish an online presence and boost credibility. The website should include content that boosts search engine rankings and funnels viewers towards a contact form.
Understanding the Target Market:
Agents should review the demographics of their target market, including age, income, marital status, and homeownership, to better target prospects for Medicare supplements or Medicare Advantage plans.
Training and Sales Techniques:
- CMS offers an excellent online training library with specific topics on Medicare and mock tests.
- When marketing to seniors, it is important to use a relationship-selling method, offering honest and genuine service that addresses their needs.
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Medicare sales agent requirements
Medicare does not send people out to sell more insurance. However, there are independent agents and brokers who sell Medicare plans. These agents and brokers are not employed by Medicare but are licensed by their respective states.
To become a Medicare insurance agent, one must first obtain a health insurance license in their state of residence, also known as a resident state health insurance producer license. This license provides fundamental training on health insurance plans, including original Medicare, Part C, Medicare supplement plans (Medigap), and Part D plans. Obtaining this license is simple but requires ongoing work to maintain it annually.
Medicare sales agents can utilize various strategies to generate leads and increase sales. Direct mail campaigns are a common and effective strategy, with response rates typically higher for Medicare than for other types of insurance. Agents can also leverage autodialers to make phone sales, though compliance with state rules is essential. Additionally, Medicare sales agents should have a strong understanding of their target market's demographics, such as age, income, and marital status, to maximize their sales efforts.
Medicare sales agents must adhere to strict marketing rules when selling plans. They cannot require members to speak to a sales agent to obtain information about the plan. They are also prohibited from offering cash, gifts, or free meals during a sales pitch. Agents are obliged to provide written information about the plan, including any limitations on doctor or hospital acceptance of the plan's terms.
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Frequently asked questions
Medicare does not send people out to sell more insurance. However, there are independent agents and brokers who sell Medicare plans. These agents and brokers must be licensed by the state and must follow specific rules when selling Medicare plans.
Independent agents and brokers can sell Medicare plans through various methods, including direct mail, phone sales, and in-person meetings. They can also use modern tools such as Customer Relationship Management (CRM) platforms and quoting platforms to streamline the sales process and provide personalized recommendations to potential customers.
Medicare plans and people who work with Medicare cannot:
- Come to your home uninvited to sell or endorse anything.
- Call you unless you are already a member of the plan or have given permission to contact you.
- Ask for payment over the phone or online.
- Offer cash or gifts to join their plan.
- Sell non-health-related products during a sales pitch for a Medicare health or drug plan.
