Understanding Medicare with Senior Benefit Services
Understanding Medicare and Medicare products is what Senior Benefit Services does best! With this page insurance agents can review all the articles and blog posts we've developed that focus mainly on Medicare. Also check out our daily blog page with other content that includes more than just Medicare basics.
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The Centers for Medicare & Medicaid Services (CMS) released the 2022 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2022 Medicare Part D income-related monthly adjustment amounts.
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Every year we get questions about selling Medicare Advantage from a lot of “non-Medicare Advantage agents”. So I’ve decided to focus on a Medicare Advantage blog series that will address a lot of the questions our Marketing Department receives about Part C (That’s Medicare Advantage, you know).
What is Medicare Advantage?
Established in 2003, Medicare Advantage is an alternative option to Original Medicare where it pays for health care costs based on a monthly fee per enrollee rather than billing for each fee for a Medicare services that is provided to the client. (like Original Medicare). But for an actual definition we turn to www.Medicare.gov (the most useful website you should probably have bookmarked),
“Medicare Advantage Plans, sometimes called ‘Part C’ or ‘MA Plans’ are offered by private companies approved by Medicare.” When a client joins a Medicare Advantage plan, they still have Medicare, but not original Medicare Part A (hospital insurance) and Part B (Medical Insurance). The client instead receives coverage from Part C (Medicare Advantage Plan) that typically includes a Rx plan.”
The definition is pretty straight forward, instead of the client receiving Original Medicare they will have Medicare under Part C.
What Carriers Offer Part C?
There are quite a few carriers that offer Medicare Advantage, but the carriers we focus on are Aetna, Humana, and Johns Hopkins (MD only). These are private companies that have a contract with Medicare offering a couple different types of Medicare Advantage plans.
There are different types of Medicare Advantage Plans?
I know it’s confusing because there appears to be one Original Medicare so you would think there is one Medicare Advantage plan. However there are 4 common Medicare Advantage plans that you will see most often:
- HMO – Health Maintenance Organization plans are typically the most affordable (and sometimes with a $0 premium) but the client will have to go to doctors, hospitals, and specialists within the plan’s network.
- PPO – Preferred Provider Organization will cost more but allows your client to go to doctors, hospitals, and specialists out of the plan’s network. Of course, going outside of the network will come at a higher cost rather than staying within the network.
- PFFs – Private Fee For Services is very similar to Original Medicare where the client can go to any doctor, hospital, or specialist as long as they accept the plan’s predetermined costs for care.
- SNPs– Special Needs Plans focus on specialized health care for clients that have both Medicare and Medicaid (also called a Dual Eligible), living in a nursing home, or have chronic medical conditions.
With the carriers we work with, you will find that HMOs and PPOs are the most common Medicare Advantage plans.
What’s the cost of a Medicare Advantage plan?
Your client’s Medicare Advantage premium can vary from carrier to carrier and by state. Typically there is a monthly fee associated with the commonly sold HMO and PPO plans that is in addition to the Part B premium. Even though your client will not be receiving the benefits of Original Part A and Part B of Medicare they still will need to pay their Part B (Medical Insurance) premium.
Who Can Enroll in a Medicare Advantage Plan?
Any client that has Part A and B and lives in the plan’s service area. There is no underwriting except clients with End-Stage Renal Disease (ESRD), who typically cannot purchase a Medicare Advantage plan.
What’s the difference between Original Medicare and Medicare Advantage?
When you get right down to it, there’s not much of a difference. Both offer the same services, however Medicare Advantage is through a private company and the out of pocket costs can differ. In addition, there are details to both Medicare options that can make a big difference for the client. The Medicare Rights Center created a neat guide to help explain the difference. Click Here for the original copy or check out the details below:
- The traditional program administered directly through the federal government.
- Includes Part A (hospital) and Part B (medical) coverage if you enroll in both.
- You pay a deductible and/or coinsurance when you get health care (usually 20% of the Medicare-approved cost for outpatient care).
- Most people pay a monthly premium for Part B. There’s no Part A premium if you have at least 10 years of United States work history.
- You can go to any doctor or hospital in the country that accepts Medicare.
- No referrals needed to see specialists; no prior authorization for services.
- You can buy a Medigap plan as supplemental coverage.
- If you want Medicare drug coverage, you must buy a separate Prescription Drug Plan (PDP) from a private insurance company
- Sold by private insurance companies that provide Medicare benefits.
- Must cover the same Part A and Part B benefits as Original Medicare.
- Some also cover extra benefits such as vision and dental care.
- The most common types are HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Organizations) and PFFS (Private-Fee-for-Service) plans.
- You still have Medicare but you’re no longer in Original Medicare—you’re in a private plan that typically has different costs and restrictions.
- You pay a deductible and/or copay for services (usually a fixed copay, like $15 per office visit).
- You still pay Medicare premiums, and your plan may charge an extra premium.
- You typically are required to use doctors and hospitals in the plan’s network.
- You may have to choose a Primary Care Physician, get referrals to see specialists, and/or get prior authorization for certain services.
- You can’t buy Medigap supplemental insurance to help pay your out-of-pocket costs.
- Plans must have yearly limits on your out-of-pocket health care costs (an out-of-pocket maximum), after which you pay nothing for the rest of the year.
- If you want Medicare drug coverage, sign up for a plan that includes both health and drug coverage, called a Medicare Advantage Prescription Drug Plan (MA-PD). You usually can’t have a separate Part D plan, unless you’re in a Medicare Medical Savings Account (MSA) or a PFFS plan.
Another thing to keep in mind is that hospice care falls under Original Medicare. However if a Medicare Advantage client requires hospice care then they will be able to use it under Original Medicare. If the client decides to drop their hospice care then they can return to the Medicare Advantage plan the following month.
What’s the downside to Medicare Advantage?
After comparing it to Original Medicare, Medicare Advantage doesn’t seem as bad as I originally thought. But what might work for one client, won’t work for them all. Here are some downsides for you and your client to consider.
One, the carrier is privately contracted by Medicare, which means if the carrier doesn’t renew the contract then members will lose coverage.
Two, depending on what type of Medicare Advantage plan the client enrolls in they might have to switch doctors and specialists. If they are not willing to do this, make sure you find a plan where their preferred doctors are within their network or at least a plan where they can travel outside of their network. Keep in mind networks can change from year to year. Speaking of the network, it’s important for clients to understand that if they travel or receive care outside of their “home” state, their plan may not cover that care (emergency care is often an exception). For us on the East Coast, there a lot of “Snow Birds” that spend their summers in a northern state, and their winters in the south. In situations like this they’ll want to ensure they have access to in network care when in a different state.
Another downside, is the Rx coverage in Medicare Advantage Plans. If you client is on a prescription medication make sure you check out what Tier Level their prescription falls under because pricing will vary from plan to plan. If you’re not too sure of the client’s prescription costs under Medicare Advantage then review everything under www.Medicare.gov’s Plan Finder. Here you can compare the out of pocket cost with a Medicare Advantage versus purchasing a Prescription Drug Plan (PDP) with Original Medicare. And just like the provider network, the Prescription formulary can change as well. So be sure your clients are reviewing plans annually to see how changes with their medications or changes to the plan’s formulary will impact their out of pocket costs.
Have any further questions?
If you have any further questions or comments about the basics of a Medicare Advantage, let me know in the comment section below. I’ll be happy to find out details for you.
Every year we get questions about selling Medicare Advantage from a lot of “non-Medicare Advantage agents.” So this year I’ve decided to focus on a Medicare Advantage blog series that will address a lot of the questions our Marketing Department receives about Part C (That’s Medicare Advantage, you know).
Here’s Part 2: Marketing Medicare Advantage Plans
Before we take a closer look at the do’s and don’ts of Medicare Advantage marketing, please keep in mind these important dates of the Annual Enrollment Period (AEP):
- October 1st – Medicare Advantage (Part C) and Rx (Part D) marketing begins
- October 15th – Medicare Advantage and Rx applications can be submitted for a January 1st effective date
- December 7th – Last day that Medicare Advantage and Rx applications can be submitted for a January 1st effective date.
In addition to the dates listed above and understanding the basics of Medicare Advantage, the agent will also need to know the rules of marketing these plans.
Why Are There Rules to Marketing Medicare Advantage Plans?
When it comes to Marketing Medicare Advantage Plans there are a lot of do’s and don’ts. The reason is that Medicare and Medicaid Services (CMS) is looking out for the best interest of people on Medicare. Enforcing Marketing rules and regulations allows CMS to ensure that those on Medicare aren’t being harassed, misled, or lied to by agents.
What the Agent Can Do (to Market a Medicare Advantage plan)
Beginning October 1st…
- The agent is permitted to call their own clients to discuss new plan options. If the agent has written a policy for a person, then they are a client, and the agent is free to contact them about new plans that are available for the 2019 year.
- The agent may solicit a potential enrollee who has given previous permission to be contacted. This can happen in a couple of ways. One, the potential enrollee approaches the agent asking to be contacted about a Medicare Advantage Plan. Two, the agent has permission to contact the potential enrollee after a sales event and the person, once again, asks to be contacted.
- The agent may call a potential enrollee to confirm an appointment time. The agent can also call to confirm an appointment with a potential enrollee who lives in a long term care facility on upon request of the potential enrollee.
- The agent can leave business cards with a potential enrollee/client to give to a friend or family member, but the referred person must initiate contact with the agent first.
- The agent can conduct sales activities in common areas of health care facilities. Common areas include hospital or nursing home cafeterias, community or recreation rooms, and conference rooms. Sales activities include submitting an application, or, a sales presentation for a group of people or individual.
- The agent can take an appointment with a potential enrollee immediately after a marketing/sales presentation provided the potential enrollee signs the scope of appointment form prior to the appointment.
About the Scope of Appointment Form
The Scope of Appointment (SOA) form is a required document that gives the agent permission to talk with a potential enrollee about Medicare Advantage or Rx plans. Additionally, the potential enrollee can also elect to discuss other products during the same appointment (i.e. hospital indemnity plans, dental, vision and hearing plans, or Medicare Supplement (Medigap) plans). Make sure to let the potential enrollee know that the SOA is a permission slip for the agent, but they are not required to purchase anything.
Click Here for a generic CMS Approved copy of the SOA form.
What the Agent Cannot Do (To Market a Medicare Advantage plan)
- Agents cannot say they are from Medicare or use the term “Medicare” in a misleading way. They cannot call potential enrollees stating they are representing Medicare or that Medicare asked them to call.
- Agents cannot go door-to-door soliciting potential enrollees. In addition, agents cannot approach people with Medicare in common areas or leave unwanted emails, text messages, or voicemails. If the person is not the agent’s client, they cannot be approached about the subject of Medicare.
- Agents cannot hold sales activities or events within health care settings that are NOT common areas. They are not permitted to meet in waiting rooms, exam rooms, hospital patient rooms, dialysis centers, and pharmacy counter areas.
- Agents cannot make unwanted calls about a non-Medicare related products – such as final expense, annuities, Medicare supplements, etc. – and turn the conversation to Medicare Advantage or Rx products. This is called the “bait and switch” and is not tolerated by CMS.
- Agents cannot call a client that has been referred to them by another client. As stated previously the potential client must make the first contact.
- Agents cannot market non-health related products such as annuities and life insurance to potential enrollees during a Medicare Advantage sale or sales presentation.
- Agents cannot conduct marketing or sales activities at an educational event. For example, they cannot discuss specific plan benefits during an educational event.
- Agents cannot offer gifts to potential enrollees for more than $15. If a gift is offered, it must be available to all potential enrollees, even if they do not enroll in a plan.
What is the difference between a Sales Presentation and an Educational Event?
Sales Presentation/Events are designed to steer or attempt to steer potential enrollees toward a particular plan or limited set of plans. These can in formal or informal group settings – such as being approached by a potential enrollee at a booth. SOA forms are required for one-on-one settings but not during a group presentation.
Educational Events are designed to inform potential enrollees about Medicare Advantage, Prescription Drug (Rx) or other Medicare Programs. During this time, the agent is not permitted to mention a particular plan or products, or, steer the client to purchase a particular plan.
There are a lot of rules for marketing Medicare Advantage and Part D plans. Keep in mind these rules apply only to agents selling Medicare Advantage and Part D plans. If you are selling other health products or non-health products you are not required to comply with CMS’s rules and regulations for Medicare. Finally, we urge you not to see these rules as an inconvenience or burden to selling Medicare Advantage products, rather to understand that CMS’s primary purpose is to protect the interest of the potential client.
Any Questions or Comments?
Feel free to leave a question or comments feel free to let me know in the comment section below. Or email me at firstname.lastname@example.org.
Marketing is always a great way to find new clients for Medicare Advantage plans. However, with everything that goes along with Medicare Advantage there are rules on how you can market those plans. One of the ways in which agents like to reach out to potential new clients is through events. There are two forms of presentations that an agent can take part in during the AEP and other times of the year to market to potential enrollees:
- Educational Events
- Marketing/Sales Events
An agent can hold Educational Events for potential or current Medicare beneficiaries or those representing Medicare beneficiaries (example: family members). Educational events are strictly designed to inform the people that attend about Medicare Advantage, Prescription drug, or other Medicare programs without going into the specifics of a particular carrier. Of course, there are more detailed guidelines to protect attendees from dealing with an unwanted sales presentation.
Guidelines for the Educational Event:
- Must be explicitly advertised as educational
- May be hosted in a public venue by the Plan/Part D sponsor or an outside entity
- May include communication activities and distribution of communication materials
- Communication is defined as clearly presenting information without containing any marketing content
Guidelines for the Agent at the Education Event:
- May answer beneficiary initiated questions
- May set up a future marketing appointment and distribute business cards and contact information for beneficiaries to initiate contact (this includes completing and collecting a Scope of Appointment form)
- Must NOT include marketing or sales activities or distribution of marketing materials or enrollment forms
- May NOT conduct a marketing/sales event immediately following an Educational Event in the same general location (example: same hotel)
In addition, if the Educational Event is organized by a plan sponsor then the following disclaimer must be used in all announcements: “This event is only for education purposes and no plan specific benefits or details will be shared.” This announcement is not required if the agent is not representing or being sponsored by a particular plan.
The purpose of a Marketing/Sales Event is to steer potential enrollees toward a particular plan or a limited set of plans. During the event, the agent is allowed to educate those who attend the Marketing/Sales Event about Medicare Advantage, Part D, and other Medicare programs which also makes the sales presentation an Educational Event. However, there are separate guidelines for the agent during a Sales Presentation.
Guidelines for a Sales/Marketing Presentation
- Sign in sheets must clearly be labeled as “optional”
- Health screenings or other activities that may be perceived as or used for “cherry picking” are not permitted
- Plans/Part D sponsors (agents representing one particular carrier) cannot require attendees to provide contact information as a prerequisite for attending an event
- Contact information supplied for raffles or drawings may ONLY be used for that purpose
- Agents representing a particular plan sponsor must use the CMS approved scripts and presentation provided By the Plan/Part D sponsor.
There are 2 types of Marketing/Sales Events:
- Formal: Structured in an audience/presenter style with the agent providing specific plan sponsor information
- Informal: The presenter or agent typically utilizes a table or kiosk to discuss the benefits of the Medicare Advantage or Part D products ONLY WHEN APPROACHED by a potential or a beneficiary of a potential enrollee
Formal Marketing/Sales Events Guidelines:
- The audience was previously invited to attend
- The audience can be comprised of current members of Medicare or Medicare Advantage and prospective members as well as those attending on behalf of a Medicare beneficiary
- Presenters must announce all products that will be covered at the beginning of the presentation
Informal Marketing/Sales Events Guidelines
- Cannot approach potential enrollees or beneficiaries of potential enrollees
- Discussing non-health care related products (such as annuities and life insurance) is considered cross-selling and is strictly prohibited.
Both Formal/Informal Event Guidelines:
- May hand out information including enrollment applications
- May collect enrollment applications at these events
- May formally present benefit information to the audience via a scripted talk, electronic slides, handouts, etc.
- May provide educational content to the audience or passersby
- May provide a nominal gift to attendees with no obligations. Nominal gift is defined as an item worth $15 or less.
- May NOT conduct health screening or other like activities that could give the impression of “cherry picking.”
- May NOT compare one plan sponsor to another by name unless both plan sponsors have concurred
- May NOT provide meals to attendees
Scope of Appointment Form:
If a beneficiary requests a one-on-one meeting then the beneficiary must fill out a Scope of Appointment form prior to the appointment. Scope of Appointment forms are not required during a Formal Marketing/Sales Event.
Contact the Carrier For Details:
CMS attempts to regulate the guidelines for Educational Events and Marketing/Sales Events with the use of Secret Shoppers. These are contractors of CMS that pose as Medicare beneficiaries to make sure the agent is staying compliant during their events. Typically the plan sponsor (carrier) requires the agent to report an upcoming Educational Event or Marketing/Sales Event. Please make sure to contact your carrier for complete details on how to properly register your event.
While there are plenty of rules for holding an Educational Event or Marketing/Sales Event, keep in mind CMS creates these guidelines to make sure the client is able to learn about their Medicare options with no pressure to purchase anything from the agent. If you want to know more about Marketing Medicare Advantage and Rx click here for our article reviewing the Dos and Don’ts.
Any Questions or Comments?
Feel free to leave a question or comments feel free to let me know in the comment section below. Or email me at email@example.com.
https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/Downloads/CY2019-Medicare-Communications-and-Marketing-Guidelines_Updated-090518.pdf (page 17 of 84)
https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/downloads/R91MCM.pdf (more details)