Avoid These Top 5 Mistakes New Medicare Agents Make

Published by Carolyn Portanova and Cassandra Bennett

Becoming an independent insurance agent is a great career path and if you’re contemplating entering the senior healthcare market, you get the fulfillment of assisting seniors with their healthcare coverage. And when it comes to the senior healthcare market, Medicare is at the top of the list. Even if you’re a veteran and have been offering Medicare solutions for years to your clients, it can still be complicated. So, let’s discuss the top five mistakes new agents make and how to avoid them.

1. Confusing Open Enrollment vs. Guaranteed Issue
2. Not asking enough probing questions on underwritten cases
3. Using the wrong application
4. Using an invalid enrollment period or anniversary/birthday rule
5. Leaving a client uninsured when switching plans

​Confusing Open Enrollment vs. Guaranteed Issue
Many times, the terms Open Enrollment and Guaranteed Issue are used interchangeably. Much of this is because in both situations a client can acquire a new Medicare Supplement plan without undergoing Medical Underwriting. CMS and the carriers’ definitions of Open Enrollment and Guaranteed Issue are two different things.
 
An Example of a Client in their Open Enrollment Period:
Mr. Stewart is turning 65 and signs up for Part B and wants to purchase a Medicare Supplement plan. He is within his six-month Open Enrollment period (within 6 months from his Part B effective date) and can purchase a Medicare Supplement plan without any medical underwriting.
 
An Example of a Client Who is a Guaranteed Issue:
Mr. Smith signed up for Medicare Part B at age 65, but his wife is still working (more than 20 employees) and has great health benefits. Mr. Smith decides to enroll in Medicare Part B and remain on his wife’s health plan. Three years later when he is age 68 his wife retires, and they lose their group health coverage. Now Mr. Smith (and his wife) needs to sign up for a Medicare Supplement policy. He is no longer in that six month
period when he signed up for Part B and no longer qualifies for Open Enrollment. Instead, he is a Guaranteed Issue situation, and can only sign up for plans A, B, C*, D*, F*, G,*, K or L that are sold in his state by any insurance company (per MACRA rules).
 
Guaranteed Issue in Medicare Supplement Terms:
is defined as the rights a client has in certain, special situations when insurance companies are required to sell or offer the client a Medicare Supplement policy (these rights are listed in the 'Choosing a Medigap Policy’ booklet.
 
*Plans C and F are no longer available to people new to Medicare on or after January 1, 2020.
However, if your client was eligible for Medicare prior to January 1, 2020 (but not yet enrolled), they may be able to purchase Plan C or Plan F. People new to Medicare on or after January 1, 2020, have the right to purchase Plans D and G instead of Plans C and F.

​Not asking enough probing questions on underwritten cases
When a client must answer health questions to be considered for a Medicare Supplement policy it’s imperative that you ask questions and get detailed answers about the status of their health. Insurance companies have certain lookback periods that they use to determine whether a client will pass Underwriting. If you don’t have a thorough understanding of their current (and past) health situation, it causes delays with the application process. Keep in mind, you can always call the Underwriter to ask if the application should be submitted and you can also use the Underwriting feature in our quoting tool to see if your client will qualify.
If you’re selling Medicare Advantage plans, you don’t have to worry about asking probing health questions. Medicare Advantage plans are required to accept any Medicare eligible applicant regardless of health status.

​Using the Wrong Application
The easiest way to submit applications is electronically to avoid any issue with using an outdated or incorrect application. However, there are times when a paper application may be necessary. To avoid any complications, it’s important to make sure you’re using the correct application for your client. Always double check the carrier’s forms and materials to ensure you’re using the most up-to-date paper application to avoid any delays and headaches.

​Using an Invalid Period and/or Anniversary/Birthday Rule
Below we’ll go over the different enrollment periods and Anniversary and Birthday rules that are state-specific. It’s important to understand the differences and to know when your client can enroll or dis-enroll.
Medicare Annual Enrollment Period (AEP)
AEP runs from October 15th through December 7th each year. During this time, Medicare-eligible individuals can:

• Change from Original Medicare to a Medicare Advantage plan (or vice versa)
• Switch from one Medicare Advantage plan to another Medicare Advantage plan
• Switch from a Medicare Advantage plan that doesn't have drug coverage to one that does (or vice versa)
• Join a Medicare Prescription Drug Plan (PDP)
• Switch from one Prescription Drug Plan (PDP) to another

 
Initial Enrollment Period (IEP)
The Initial Enrollment period is a seven-month period when someone is first eligible for Medicare (Parts A and B). For those eligible due to age, this period begins three months before they turn 65, includes the month they turn 65, and ends three months after they turn 65. During this time, they are also eligible to enroll in Part D (Prescription Drug Plan) or Part C (Medicare Advantage Plan). If a consumer misses their Initial Enrollment Period, they may have to wait to sign up and will be
liable for late enrollment penalties. For those eligible due to disability or certain qualifying circumstances dates are calculated differently.
 
Medicare Advantage Open Enrollment Period (MAOEP)
Between January 1st and March 31st each year, individuals enrolled in a Medicare Advantage Plan (MA or MAPD) can:

• Switch to another Medicare Advantage Plan (with or without drug coverage).
• Dis-enroll from their Medicare Advantage Plan and return to Original Medicare. If they choose to do so, they'll be able to join a Medicare Prescription Drug Plan.
• Switch to another Medicare Advantage Plan (with or without drug coverage) or go back to
• Original Medicare (with or without drug coverage) within the first 3 months they have Medicare.

 
Special Enrollment Period (SEP)
Special enrollment periods are enrollment periods outside of the usual IEP, AEP or OEP when an individual may enroll in a plan or change their current plan. There are various types of SEPs, including SEPs for dual-eligibles (those enrolled in both Medicaid and Medicare), and for individuals whose current plan terminates, who change residency and who meet exceptional conditions. Depending on the nature of the special enrollment period, an individual can:

• Discontinue an enrollment in a Medicare Advantage (MA) plan and enroll in Original Medicare
• Switch from Original Medicare to a Medicare Advantage plan
• Switch from one Medicare Advantage plan to another MA plan

 
Medigap Open Enrollment Period (MOEP)
Medicare eligibles have a six-month open enrollment period that begins the month they turn 65 or older and are enrolled in Part B. During this one-time open enrollment period, they can enroll in a Medigap (Medicare Supplement plan) regardless of their health status, and they cannot be denied coverage. If they do not enroll during their six-month enrollment period, they will have t to answer health questions, may pay higher premiums and may be denied coverage all together.
 
Anniversary/Birthday Rule
Medicare Supplement enrollees can change their Medicare Supplement plan in certain states to another plan of equal or lesser benefits around the date of their anniversary/birthday each year without answering health questions. If your state does not have an underwriting exception such as the Medigap Birthday Rule, your client will likely have to go through underwriting. You must refer to the state’s and carrier’s rules regarding enrolling your clients under a Birthday or Anniversary rule.

​Leaving a Client Uninsured When Switching Plans
When moving a client from one plan to another it’s crucial to ensure that your client has coverage during the transition period. Not using the proper time frame set forth by the carrier or criteria to move a client can be disastrous. Each carrier has very specific rules about transitioning your client from one policy to another and they’re also state specific. Be sure to thoroughly go over all the parameters when it comes to re-writing your client into a new policy.
 
The world of Medicare can seem daunting to seniors and to new insurance agents as well, but with the proper training and education - and an FMO who will be there for you to answer any questions you may have - you’ll be destined for great success. Reach out to us today if we can assist you on your Medicare journey.

Tweet