Comparing Medigap Plans - Is It More Than Just Price?

[cai24]

I am very new to selling Medicare supplements, and I'm trying to learn as much as possible. This is probably a basic question, but is there more than just price when choosing a plan? In my area, Humana and Transamerica seem to be the cheapest for Plan G. If Humana is the least expensive, does it ever make sense not to use them (at least for new enrollees/open enrollment)? Is it possible that Transamerica or one of the other options would have smaller rate increases, thereby making them more appealing?

My other question involves UnitedHealthcare. My understanding is that their Medigap plans are community rated (but I may be incorrect). It seems to be more expensive initially, but could there be significant savings later down the road? How would this compare to other plans in terms of rate increases, etc? I believe that Humana and TransAmerica are issue-age rated, but I don't know for sure.

I apologize in advance for the questions. I'm trying to learn as quickly as possible. If anyone has any recommendations for training, please let me know.

 

[Todd King]

Price is definitely a factor. Another factor would be the company itself. You'll probably find over time that Trans is not a company you'll like dealing with on a continued basis. Working with them is like pulling teeth just to get something done.

UHC does have a decent history of keeping rate increases low. However, that still doesn't mean they are the best company to use nor does it speak to future increases.

Keep in mind that the best you can do it to do what is in the best interest of the client today. We never know what the future will bring for them, but we use our best judgement.

 

[somarco]

Selling on price alone = very short career.

This may not be an issue if you operate in a GI state.

Standardized plans are identical in every way except premium

Community rated plans charge the same rate to those that are 65 as they do folks who are 95. Do you see a problem with this approach?

 

[mickeyma]

Since all plans are STANDARDIZED and offer the same, basic benefits, why not sell on price. Why overpay by $10-$20 a month without getting any more benefits. The only reason I can think is for when a company has a history of raising rates significantly or denying claims.

I agree with Todd King about Transamerica. They were a pain to deal with but had low rates in California in the 70-80 age group.

B U T......stay in touch with your clients through emails several times a year. This will help keep them on the books - birthday, holiday emails, changes to Medicare, health tips, etc.

I receive replies from many of my clients thanking me for the emails. They give me referrals, too.

 

[Todd King]

Selling on price alone = very short career.

This may not be an issue if you operate in a GI state.

Standardized plans are identical in every way except premium

Community rated plans charge the same rate to those that are 65 as they do folks who are 95. Do you see a problem with this approach?

My first manager tried to explain that to me. I didn't get it then and many years later, I still don't get it. If it were other products, I might understand, but not when it's a plan that every company out there in the market has.

You see, I never minded re-writing my own clients to get them a better deal. Maybe that's the difference. Either way, my career has not been short at all.

That manager, who was so adamant about it, also made a statement that no one would ever be able to steal his clients no matter what the price. I asked him to give me a list of his clients so that I could show him just how wrong he was. I never got that list.

I told him straight up though, if I did go see his clients he was going to look like a crook by the time I was done!

Now, with all that being said...there are times when you can save a client "Too much money". They won't believe you can save them but so much.

 

[somarco]

@Todd King back when you were selling, I doubt you sold on price alone. Perhaps you did, but if so, why did you caution @cai24 about TransAm?

Regardless of the product, if all clients eat off the dollar menu do you really have clients or temporary policyholders?

Offering lower priced plans is not a problem but if you train your clients to chase the lowest price how much loyalty is there?

I rewrite clients from time to time. Maybe 5% of "new" apps are rewrites of existing clients.

My retention rate is near 100% so I guess my clients stick around for something other than today's lowest price.

 

[Todd King]

@Todd King back when you were selling, I doubt you sold on price alone. Perhaps you did, but if so, why did you caution @cai24 about TransAm?

Regardless of the product, if all clients eat off the dollar menu do you really have clients or temporary policyholders?

Offering lower priced plans is not a problem but if you train your clients to chase the lowest price how much loyalty is there?

I rewrite clients from time to time. Maybe 5% of "new" apps are rewrites of existing clients.

My retention rate is near 100% so I guess my clients stick around for something other than today's lowest price.

I cautioned him on Trans because they tend to make things harder than they have to be. That's more about the company. However, if I were with a client, I wouldn't pull out Trans at all. Maybe it they were just that much lower than anybody else, but most of the time (probably 100% of the time) that isn't true.

My retention on Supps and FE were around 98% or so. I won't say I sold on price 100% of the time, but close to it. I just never seen any sense in a client paying more than they have to, especially when they all have the same plans and they all pay their bills.