Colleagues and friends, we are entering unchartered waters in 2010. We are now the most publicized industry in the world. This could be a blessing or a curse, it's all in how you handle change.
Regardless of your political stance, we should all agree that there are drastic changes going on in the insurance industry and in particular, the impact on our seniors. At a record rate, baby boomers are turning 65 and more than ever they need our expertise, experience and support in assisting them with this life-changing transition. The changes to Social Security, Medicare and in particular the impact on Medicare Advantage are presenting new challenges to the industry.
The key for you to survive in these times solely lies in your ability to stay ahead of the curve and be a source of knowledge to your clients. Have you done your homework? The following are a few examples that you should use in your presentations that will gain trust with your clients and give them peace of mind that you are prepared to protect them from current and future change.
Goodbye Medicare Advantage
Since 2003, I have made many predictions starting with the surge of HRA Section 105 plans becoming a common practice in my various articles in Life Insurance Selling. Now in 2010, I can tell you that after countless hours of research, Medicare Advantage will soon be a thing of the past and will be remembered as one of the largest mistakes in American health care history.
Currently there are over 10 million Americans on Medicare Advantage, most of which are on a no-premium plan. Nearly 7% or 660,000 seniors will have to change their plan in 2010 due to the end of private fee-for-service plans with most major carriers. Most of these consumers will be forced to re-enroll in traditional Medicare. For those of you who believe that traditional Medicare with a Medigap policy is the best protection for our clients, this is good news! The $130 billion cut to Medicare Advantage beginning in 2013 will be the straw that broke the camel's back. The federal government has clearly stated that the expense for a senior on Medicare Advantage is 14% higher than an individual enrolled in original Medicare with a Medigap policy. They have also clearly stated that it is simply unaffordable, resulting in drastic increases in premium, co-pays and coinsurance to our clients.
In speaking with several major HMO carriers, I was informed that the average zero-dollar premium plan from 2009 will now have an average premium of $52 a month and client contribution to their health care will rise as high as 70% in 2010. This is just the beginning, folks. Once the $130 billion in cuts prove not to have the desired impact, there will be larger cuts, eventually leading to the elimination of Medicare Advantage as we know it. Most experts are predicting this to come to a head by 2018-2020 at the latest. Once premiums and out-of-pocket expenses begin to match or exceed the exposure of traditional Medicare with a Medigap policy, our clients will demand that we take action.
I recently interviewed the senior vice president of a prominent Medicare Advantage carrier with whom you are all familiar with and I asked about a memo that was released stating, "87% of our clients will be able to keep a zero-dollar premium plan in 2010." I asked if they could back this prediction with factual numbers and prove how they would be able to afford this when all other carriers cannot. It has been two months and I have yet to hear or see anything further from this source. Are you ready for the change?
New focus on the fact-finder
Due to these drastic changes in our industry, we have decided to make adjustments and train our agents to do the same. I would like to share some of the strategies that we are using, bringing great success to our field agents.
First and most importantly, remember that we are not dealing with the seniors of yesterday. The baby boomers are savvy, well-educated consumers. Most have been very involved in the decisions made with their benefits and retirement strategies. Keeping that in mind, a fact-finder is very important in our process with these consumers. The days of out-bidding your competitor and selling an insurance policy are over! These consumers are looking to be well-educated by someone who is willing to dig deeper and identify their real needs.
A fact-finder will clearly identify these needs allowing you to present a solution. Your product will sell itself once your potential client has truly realized that need. Your fact-finder should include a Medicare review, retirement overview, long-term care and final expense reviews. Also, as of Jan. 1, 2010, there are new tax advantages allowed annually for anyone that owns a long-term care policy. There are state-specific and federal tax advantages. We encourage you to check your state's policy on this.
We all know that the referral is the most powerful lead we can ever have in the insurance industry. Using the fact-finder process will allow you to identify the need, service that need and confidently ask permission to share your knowledge and skills with the client's friends or family. Remember, the phone can be your friend or your foe. When making initial contact with the potential client, we encourage our agents to offer a Medicare review. We do not offer quotes or discuss products over the phone. Getting in front of your prospect is the hardest part of our job, so keep it simple and get the appointment.
If the proposed is hesitant about the fact-finding process or is reluctant to provide you with the information you are requesting, you should explain briefly and politely that it is part of your job to be in compliance with the federal government and for you to properly advise them, you will need the details of their current situation. Throughout this process you will build on the ever-important "yes" answer and gain the confidence and trust of your client.
Social Security update
Another great strategy when prospecting is to offer to educate the consumer about their Social Security and what changes they can expect. Social Security is a very sensitive subject for our seniors and proposing an appointment to discuss changes in Social Security rather than discuss insurance can give you great success in appointment-setting.
Throughout this process, please be sure to provide accurate, documented information and always stay in compliance. Never use scare tactics or intimidate the consumer into doing business based on Social Security projections. Inevitably this appointment will lead to a fact-finding process, a need and the resulting sale.
Seniors are into seminars
Be active in the seminar world. Seniors are attending informative seminars at a record rate right now. They are confused and scared of the changes they are constantly hearing about. You can be a wonderful source of peace and reassurance in their lives.
Our prospects want the knowledge and services that we provide; however, they do not want high-pressure sales. Seminars are so highly attended because of the safety the consumer feels. In a group setting, seniors feel safe and assume that there will be no sales process. They are correct. There should never be a sale in a seminar atmosphere. Seminars are for information, education and for the consumer to establish if they need your services. Use your seminars to create interest and show needs. If you do so successfully, the appointments will present themselves.
Be sure to be in full CMS compliance when presenting a seminar, especially if you are discussing Medicare Advantage. I would highly recommend that you do your homework and get accurate, up-to-date rules and regulations when conducting a seminar.
It's your job to open clients' eyes
In closing, I would like to thank you for taking the time to stay informed. Remember to stay ahead of the curve, continue your education and most importantly, remember that our customers come first. The most important part of your job is to service your clients with honesty and integrity.
Use your fact-finder. It will make your job easier and truly allow you to identify needs and use appropriate measures to find a solution. Speak with your peers, and work together in seminar situations. Offer Medicare Reviews to your prospects. It's your job to open your clients' eyes to the realities of senior living and what they truly need to live a healthy, happy lifestyle in their golden years. Good luck to you all in your endeavors and Happy Selling!
Gerard DeMare is the Unit Supervisor of Bankers Life and Casualty in Denver. With over 20 years of experience, Mr. DeMare, along with Field Training Expert Dayna Pagard, serve the senior market of Colorado, specializing in Medicare supplements, long-term care and annuities. Feedback or questions are appreciated at gerard.demare@bankerslife.com.
