Mastering the Evolving Medicare Supplement Landscape: Insights and Strategies for Brokers

In the ever-evolving world of Medicare, it's paramount that we stay ahead of the curve to provide the best possible solutions for our clients. Whether it's addressing concerns about rising premiums, decoding the complexities of Medicare Advantage and Medicare Supplement (Medigap) plans, or exploring the unique benefits specific to plans, the goal remains the same: equip brokers and beneficiaries with the knowledge and tools they need to succeed.

As President of Medicare Supplement at Humana, I have received a range of inquiries from brokers, all aiming to navigate Medicare’s complexities in an effort to serve their clients. Below are the most frequently asked questions along with my insights.

1. “My clients love Medicare Supplement and the simplicity it affords, but they have concerns about future premiums. How do I position this to clients?”

Concerns about the future premiums for Medicare Supplement plans are understandable, given rising health care costs and inflation. When comparing today's premiums with historical pricing, we see adjustments reflective of this trend. Based on my experience,

I would recommend exploring options like Plan N, which offers a balance between cost and coverage, resembling the commercial coverage with which many are familiar. When exploring a Humana-specific plan option, our rating philosophy positions us in the middle of the pack, ensuring competitive premiums. In fact, we have observed a trend toward rate stability as other issuers align with our pricing strategy. Aside from premiums, it's essential to communicate the value that Medicare Supplement plans offer, emphasizing their role in helping to pay for some of the costs not covered by Medicare. By presenting Plan N as an alternative and highlighting a company’s commitment to fair pricing and quality of service, we can help clients navigate their concerns about future premiums effectively.

2. “I sell both Medicare Advantage and Medicare Supplement. Are there changes coming?”

The Centers for Medicare & Medicaid Services (CMS) is proposing changes that may have some impact on Medicare Advantage plans, but no final changes have been published yet. When it comes to Medicare, brokers are encouraged to prioritize client needs, which can be supported through a diverse portfolio approach that accommodates both Medicare Advantage and Medicare Supplement. Brokers can expand their offerings to include Medicare Supplement plans and ancillary plans and can capitalize on sales opportunities outside of the Annual Election Period to ensure a continuous commission flow and establish themselves as a comprehensive advisor. This approach allows brokers to navigate clients through health care options effectively, maintaining their financial health and fostering trust. 

3. “I saw that Medicare Advantage now represents more than half of all Medicare eligibles. Is there still going to be room for Medicare Supplement?”

Despite Medicare Advantage covering more than half of Medicare eligibles, Medicare Supplement plans are poised for growth, with projections showing an increase from 14.3 million to 17 million selecting a Medicare Supplement plan by 2031. This growth is significant, especially when you compare Medicare Supplement plans to Medicare Advantage’s individual plans (removing Group MA and Special Needs Plans from the equation). When isolating individual sales, Medicare Advantage and Medicare Supplement are fairly balanced, demonstrating a continued demand for plans on both sides that cater to personal needs. This underlines the continued relevance and demand for Medicare Supplement, ensuring its place in the Medicare ecosystem as a flexible and preferred option for many seeking tailored health care coverage.

In my opinion, starting with Original Medicare and Medicare Supplement when first becoming eligible for Medicare is a wise choice and offers beneficiaries the flexibility to switch to Medicare Advantage later without complications. For some individuals who start with Medicare Advantage, underwriting may be more difficult if they decide to switch to Original Medicare with a Medicare Supplement plan unless exercising the initial 12-month trial right.

4. “Do you expect to see any changes to Medicare Supplement offerings?”

Just as the industry is scrutinizing Medicare Advantage, we might see influential entities such as the National Association of Benefits and Insurance Professionals (NABIP) or AHIP (formerly America’s Health Insurance Plans) advocating for updates or modifications in Medicare Supplement policies. Considering the growing adoption of rules that allow for special elections and birthday-based plan changes, the timing appears opportune for a reevaluation of Medicare Supplement plan designs. This process could potentially lead to enhancements that make Medicare Supplement plans more attractive or suited to current consumer needs, possibly influencing a spike in sales. My perspective is that both Medicare Advantage and Medicare Supplement will continue to have their distinct places in the market, catering to the different needs and preferences of Medicare beneficiaries.

5. “Do you prefer Plan G or Plan N?”

Medicare Supplement Plans G and N each offer different levels of coverage to help fill gaps in Original Medicare. Regardless of the issuer with whom your customer has a plan, Plan G and Plan N offerings remain the same.

• Plan G does not pay for the Medicare Part B deductible. After this deductible is met, Plan G covers 100% of Medicare Part B excess charges, meaning it will pay for the difference if a provider charges more than the Medicare-approved amount. It also covers coinsurance and copayments for Medicare Parts A and B services and provides coverage for emergency health care services during foreign travel, up to plan limits.
• Plan N excludes coverage for the Medicare Part B deductible and does not cover excess charges from providers charging more than the Medicare-approved amount for services. Plan N introduces a copayment of up to $20 for doctor's office visits and a copayment of up to $50 for emergency room visits that do not result in an inpatient admission. Like Plan G, Plan N offers foreign travel emergency health care coverage, with specific copayments applying to office and emergency room visits under this plan.

Plan G is now one of the GI plans (MACRA changes as of Jan. 1, 2020), however, N remains on the “must health qualify” list, outside of OE.  I would say that’s one of, if not the biggest driver for Plan N rate stability.

The choice of issuer affects premiums, which can vary widely for the same plan based on the company's pricing strategy, location and available discounts. Additionally, an issuer’s reputation, financial stability and customer service can impact the satisfaction and the overall value your client will get from a Medicare Supplement plan. Some issuers may offer to a policyholder access to additional savings, such as wellness program discounts, adding further value to your client’s choice.

Deciding on whether one should choose a Plan G or a Plan N really comes down to personal preference.  Personally, I like Plan N, but I also understand others might enjoy the peace of mind of knowing everything is covered under a Plan G once the Part B deductible is met.

6. “My clients are on a budget for health care. If PDP prices climb, are there lower-cost Medicare Supplement options that are still considered good coverage?”

For clients concerned about health care budgets, especially with Prescription Drug Plan (PDP) prices, Medicare Supplement Plan N and high-deductible options like Plan G offer viable, cost-effective coverage solutions. As mentioned above, Plan N provides substantial coverage with lower premiums by introducing copayments and not covering the Part B deductible. It's an attractive choice for those seeking a balance between affordability and comprehensive benefits. On the other hand, the Plan G high-deductible option allows for even lower monthly premiums in exchange for a plan deductible. After meeting the annual plan deductible, the plan covers all remaining costs for the year with the exception of the Medicare Part B deductible. This plan suits clients willing to pay a higher upfront cost for substantial coverage later, offering a strategic way to manage health care expenses. These options demonstrate that affordable Medicare Supplement plans can still provide excellent coverage, helping clients stay within their health care budgets without sacrificing the quality of care.

7. “Medicare Supplement is a standardized product, but I am hearing that there are additional services or discounts with some companies or plans. Is this true?”

Most issuers offer access to services or discounts on many Medicare Supplement plans. At Humana, for instance, we provide access to valuable discounts on things like hearing aids and supplies on many Medicare Supplement plans. Humana also works with the SilverSneakers® program, granting Medicare Supplement members on many Humana plans access to a network of more than 15,000 fitness facilities nationwide, along with a wide range of indoor and outdoor fitness classes and social gatherings. Additionally, our Well Dine service from the Medicare Advantage side has been extended to include our Medicare Supplement policyholders, offering 14 free frozen meals automatically sent to your client’s house after an inpatient hospital stay. As a reminder, some states do not permit discussion of these discounts or services prior to enrollment, but if permissible in the states, benefits like these, regardless of the issuer, can be included when presenting plan options to clients.

8. “I get emails all the time talking about Medicare Supplement agent incentive plans. Aren’t they all the same?”

Agent incentive programs within the Medicare Supplement market often seem similar at first glance, primarily because commission structures across the industry tend to align closely. However, at Humana, we distinguish ourselves through our unique approach to incentive qualifications. Our criteria for broker incentives (at the time of this published article) are straightforward with just one application needed to qualify. This policy is unparalleled in the industry and is designed to ensure that brokers are not only rewarded with competitive commissions but are eligible to earn additional incentives for simply choosing to work with us. Although agent incentives and commission structures vary by state, this approach encourages brokers to "try us" and see the benefits for themselves, setting us apart in a crowded marketplace. Our aim is to build strong, supportive relationships with our brokers, recognizing their crucial role in our success and the well-being of our members by providing them with exceptional opportunities for rewards beyond the standard commission structure.

Understanding the unique benefits, costs and coverage details of Medicare Supplement plans enable you to guide your clients toward informed decisions that best suit their health care and financial objectives. Embracing this knowledge enhances your role as a trusted advisor and ensures your clients navigate their Medicare options with confidence and clarity.