How Advisers Are Handling Medicare Part D: It's a Matter of Attitude

For the past several months, and particularly since Nov. 15, 2005, advisers selling Medicare Supplement coverage have had their hands full. Why? Because "confusing" is a kind description for the introduction and implementation of the new Medicare Part D (Prescription Drug) benefit.

The national news media have criticized Medicare Part D for being "too confusing" for its potential beneficiaries. And there is a great deal of truth in that assessment. But what's new about that? Any new federal program takes some patience and understanding in deployment. It is disappointing, however, that the Part D benefit has compounded problems and failed to deliver the simplicity that the program was meant to have.

So, how do producers deal with the grief?

As president of the National Association of Medicare Supplement Advisors, I decided to find out. For two weeks following the Nov. 15 introduction (first sale date) of Part D, I interviewed about 20 of our members and received numerous viewpoints. There wasn't much "gray area" in the agents' thinking -- the responses were nearly all "black or white."

The agents' responses break down into four main types:

1. Those who are having terrific success with marketing the program.

2. Those who are passive yet participating.

3. Those who are referring people to mail-order or pharmacy programs.

4. Those who want nothing to do with anything new and are willing to pay the price for ignoring their clients and refer them to company letters and offers.

Although I can sympathize with some agent negativity in trying to deal with all the comprehensive details of Part D, it would be of no value to discuss the last three "attitudes" in this article. Let's focus on examples of agents who are finding great success enrolling their clients in the program.

The enthusiasm of those who decided early on to get ahead of the program and prepare themselves for its implementation is overwhelming.

For example, here's how Stanley Schwartz, MSAA, of Quincy, Ill., evaluated his participation: "I have been having a blast. This is Dec. 3. I have had 12 working days of enrollment. I have enrolled 29 people in one of six plans offered by two nationwide companies. I have picked up two new Med Supp policyholders in the process, and I have four more that I will likely write within the month. I have six appointments scheduled for next week, and the calls are coming in.

"All I did was send out a letter to all of my existing clients in mid-September, offering a few suggestions to explain and prepare them for Part D. Of my existing clients that have come into my office, probably 85% have had my letter with them! I also put three ads in our local paper with my photo and logo.

"My goal at the onset was to make this as quick and simple as possible for the enrollee. It's worked. I was able to get someone with six common drugs in and out within 30 minutes with the confidence that he was in the most practical plan. Certainly, it didn't start that smoothly, and there are still bumps in the road as I go. But it is fun writing the book on how to market a new product. One man who came in with a real 'chip on his shoulder' told his wife as they left, 'We just killed a snake. That wasn't so bad after all.'"

Schwartz also noted that his "homework was done well ahead of time," but I was most impressed with his overall assessment of the total process: "I am convinced more than ever that John Q. Public really needs the help of a specialist. When a client brings me his or her mail order or drug store material, I will highlight in the Summary of Benefits what needs to be compared. I let the client make the decision. In one case, that meant a 'no sale' for me, but what I gained in credibility was invaluable. Credibility is worth far more than an enrollment commission. But in most cases, it has meant an enrollment and a very happy client."

These comments were echoed by Nancy Brickley, MSAA, of Fort Wayne, Ind. She wrote: "I've been having a great time since Nov. 15 because my clients are contacting me and begging me to visit them to talk about the changes in Medicare. No 'cold calling' needed! I've been scheduling appointments two and three weeks ahead due to my clients asking me to see them.

"I have written four Medicare Supplement conversions for people on group insurance who are losing their prescription drug coverage. I am so busy I can't keep up with everyone who wants to see me. I've had invitations to speak in front of groups."

Brickley's point is well taken. Many people are losing their group coverage, and many companies declared before the outset of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA 2003) that if Medicare ever came up with a prescription drug benefit, the companies would discontinue group health benefits for retirees. As a hopeful solution, MMA 2003 included billions of dollars in funds to encourage U.S. employers to keep retirees on their group medical plans. But, as time is telling, that is not always the case, and there is not enough incentive for some employers to keep retirees on their health plans. That opens another opportunity for the agent to make a sale -- probably a Medicare Supplement Plan F in combination with the Part D plan.

This brings up another crucial point. In selling Medicare Part D, you (the agent) must ask the Part D prospect or client if he or she currently has a group health insurance plan in force. This is a must! Because some companies already have sent letters of "creditable coverage" to their retirees, many of them have warned the retiree that purchase of Part D might result in an automatic termination of the retiree from the existing group health insurance program. You cannot afford to overlook this important question and write Part D coverage on a client who consequently would lose underlying group health insurance coverage with his or her former employer. Being subject to an Errors and Omissions insurance claim will reduce any producer's appetite to continue in the insurance business. Don't overlook this just to make a sale!

The most positive response I received from the agents I interviewed came from Mike Colson, MSAA, of Carson City, Nev. "This past September, I started to organize seminars in the seven basic areas where my clients live," Colson wrote. "They were mailed invitations with follow-up phone calls. The seminars were very well attended ... about 90%. I began making appointments prior to Nov. 15, scheduling eight to 10 a day, by ZIP code, to reduce my driving time. I knew the demand would be great. It has exceeded my expectations. I am selling seven to 11 Part D plans each day in the field. This is Dec. 9, and I've written 133 apps so far.

"Far more important than that, my clients are thanking me over and over. They do not even have a clue how to figure all this out on their own. They are simply thanking me for my time and effort. I'm asking them when I make the appointment to have their medications out for me to see and also their current cost for each. I simply work the numbers to see where they get the best deal.

"The way I see it, this is not an option. It is a must. If I don't do this, I'm abandoning my clients. Someone else will do it, and I stand a good chance of losing clients. I originally told them I would help them as time goes along. This is the fulfillment of that promise."

That's a good summation of how to succeed with Part D. As a trusted adviser, you are the key to a sensible and satisfactory solution for the perils of the Part D program. All the print, television, and radio advertising, direct mail pieces, and stumbling through the Medicare Web site cannot replace the value of the agent in achieving the success that Part D requires. Agent footwork is the antidote to negative attitudes for all of us in the insurance industry.

Ronald J. Iverson, MSAA, a 34-year veteran of the insurance business, is the founder and president of the National Association of Medicare Supplement Advisors and has developed a training program for the Medicare Supplement Accredited Advisor (MSAA) designation. He has conducted long-term care seminars across the country and has written two books and several continuing education courses on LTC insurance.