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Navigating the Medicare Market

Navigating the Medicare Market. Recruiting and Training Webinar. Attendees Receive. Gas. 2000. LUNCH. $250 GAS CARD DRAWING. MONTHLY LEAD DRAWING. $10 GIFT CARD. Gas. 2000. LUNCH. Charles R. Mankamyer. Senior Vice President  United American – General Agency.

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Navigating the Medicare Market

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  1. Navigating the Medicare Market Recruiting and Training Webinar

  2. Attendees Receive Gas 2000 LUNCH $250 GAS CARD DRAWING MONTHLY LEAD DRAWING $10 GIFTCARD Gas 2000 LUNCH

  3. Charles R. Mankamyer • Senior Vice President  United American – General Agency Representing UA in the field as one of UA’s largest producers from 1979 to 2009 … The opportunities available today with UA and the Senior Market are outstanding, may be the best opportunity since Medicare began in 1966! “ For those Agents that will recognize this opportunity and work it to its fullest potential …it will change their lives and their families lives! “ Good Luck & Good Selling!”

  4. Tom Conner • Regional Director  Central Region A graduate of Eastern Illinois University with a degree in business administration, Tom Conner began his insurance career as a General Agent. He then became a National Recruiter and traveled extensively for several years. Wanting to settle down, he took a position as the Midwest Sales Director for a major insurer where he recruited field marketing organizations and trained their Agents. Tom later worked as the Midwest Director for one of the largest third party administrators in the United States. “ I am really intrigued with the challenge and the opportunity to build UA into a national presence.” - Tom Conner • 214.563.1276 • tbconner@torchmarkcorp.com

  5. Focus of this meeting • United American’s Lead Contract • The New Medicare Landscape • Medicare Advantage (MA) and Medicare Supplement (Med-Supp) Insurance • Explanation of the Senior Market and why Medicare Supplements offer the MOST growth opportunity in the most stable market • Why the HDF is the “Thinking person’s policy” • Cash-free, FRESH Direct Response Leads

  6. The New Medicare Landscape

  7. New Medicare Landscape Which of the following products have you sold in the last 12 months? Source: Agent’s Sales Journal, June 2011

  8. New Medicare Landscape • The Affordable Care Act continues to be implemented bit by bit • Agents are being forced to shift their market focus • Products like Medigap’s (55%) are receiving increased attention as agents expand their product lines. • “I plan to move into the Medicare supplement business [in the next 12 months] and hope to establish an ‘Obamaproof’ market for my business,” said an independent agent from Plano, Texas who saw business decrease in the past year. Source: Agent’s Sales Journal, June 2011

  9. Medicare Facts Every day, more than 10,000 boomers will turn 65 in 2011 This exceeds 3.6 millionseniors Source: Pew Research Center, December 2010

  10. New Medicare Landscape Understanding Medicare Advisors and clients are surprised and confused to learn that Medicare will not cover all of their health care expenses when they retire. Advisors often feel unprepared to have this discussion because they don’t have in-depth knowledge about how Medicare works. But you don’t need to know all the ins and outs of Medicare to help your clients. You simply need to understand the basics. Source: Agent’s Sales Journal, June 2011

  11. Medicare.gov

  12. Medicare Enrollment • All Seniors are eligible to enroll in Medicare Part A when they turn 65. Enrollment is automatic through Social Security and premium-free for most people. • Enrollment in Medicare Part B is optional and requires a monthly premium of $115.40 (Income based), which is deducted from your Social Security check. In 2012, the monthly premium will decrease to$99.90 (income based).* • Parts A and B will cover many of the hospital and medical expenses, but not all of them. A Medicare Supplement insurance plan can help you cover the deductibles, coinsurance, copayments, and even the excess charges that Medicare doesn't cover. • Prospects must be enrolled to Medicare Parts A and B to be eligible for a Medicare Supplement policy. Source: Medicare.gov * CMS.gov press release Oct. 27, 2011

  13. WHAT ARE THE COVERAGE OPTIONS Medicare Advantage (MA) and Medicare Supplement (Med-Supp) Insurance ?

  14. Why Do Seniors Sign Up for a Medicare Advantage Plan? Cost Lack of Information $ ? $ ? $ ? $ $ ? ? $ ? $ ? $ ? $ ?

  15. MA = Medicare Advantage Plan (Part C) • Offered by private companies – provides Part A & B benefits • Three types of Medicare Advantage Plans: • Health Maintenance Organization (HMO) • Preferred Provider Organization (PPO) • Private Fee-For-Service (PFFS) • Must cover Medicare Part A and B services, but not structured the same as Medicare Supplements • Not guaranteed renewable • Medicare Advantage Plans can change the Senior’s benefits

  16. Medicare Advantage Plans • In 2010, more than 636,000 Seniors were canceled by their Medicare Advantage providers • In 2011, almost 700,000 Seniors were canceled by their Medicare Advantage providers • Over 200,000 Seniors have been cancelled going into 2012 • That’s Over 1.5 MILLION Seniors cancelled in the last three years from MA Plans!

  17. Medicare Advantage Plans Did you know? • Medicare Advantage Plan can change the Senior’s benefits and premium annually • Doctors can opt out of the plan at any time • Annual Notice of Change (ANOC) • Typical changes include: • Premium increases • Benefits reductions • Providers pulling out of the area

  18. 2010 vs. 2011 Benefit Reduction This example taken from one of the nation’s top Medicare Advantage insurers Source: Medicare.gov

  19. Other Out-of-pocket Costs Include • Hospital Stay • Office Visits • X-rays • Lab Work • Ambulance • ER Visits • 20% Copay • Durable Medical Equipment • Medical Supplies • Out-of-network fees • Radiology • Skilled Nursing • Outpatient Surgery • Diabetes Supplies

  20. Medicare Advantage Good Health vs. Health Conditions (Ages 65-69 in Texas) Up to 61% increase! Source: Medicare.gov

  21. Sense of Urgency

  22. Medicare Advantage Non-Renewal • October 15 to December 7, Seniors can change from one MA Plan to another, or • Disenroll from any MA Plan and return to Original Medicare and purchase a Med-Supp Plan • Opportunity to educate Seniors about their choices, including our Medicare Supplement Plans • Now is the time!

  23. Why Med-Supps offer the most growth 10,000 Individuals Turning Age 65 in USA …Everyday! Thousands of Seniors Turning Age 65 …Every Month In Your Local Area …Opportunity is NOW!

  24. Medicare Supplement Open Enrollment Medicare Supplement policies are guaranteed issue during open enrollment periods; the applicant cannot be turned down for health conditions. Health questions must not be asked or completed during Open Enrollment. The other application questions do apply. A person is eligible for an open enrollment plan: • For 6 months following initial Medicare Part B enrollment at age 65 or older. • Open enrollment applies in some states to those under age 65 enrolled in Medicare due to disability. • Applications can be taken up to 6 months before the prospect’s open enrollment There are also times that a person can join Med Sups without health questions when they are coming off a Med Advantage program or employer group coverage Also keep in mind there are also some other state specific times of guaranteed enrollment Contact your director

  25. 5 Keys to Selling MA Disenrollees

  26. New Medicare Landscape How to Grow Your Medicare Business When you sell based on price, all you’re doing is churning your business Source: Agent’s Sales Journal, October 2010

  27. How to Grow Your Medicare Business Sell the Right Plan the First Time • Two Thirds of Seniors have middle to High Incomes… • Seniors want value, not the cheapest plan! • Is the customer comfortable with cost-sharing or do they prefer insurance that covers everything? • How healthy does the customer expect to be in 5, 10, or 15 years? • Does the customer have any chronic conditions? • Give your opinion!

  28. What We Offer Our Producers and Policyholders today! • ProCare available in all states except: CT, MA, MN, NH, and NJ • MC4810 Medicare Supplement in WI

  29. ProCare Med-Supp Plans We Offer A F K B HDF L C G M D N Plan availability varies by state

  30. Medicare A/B Chart

  31. UA Policies Issued in 2010 82.8% of our Medicare Supplement policies sold in 2010 were Plan F or Plan HDF Source: Company Statistics, as of 12/2010

  32. Overview of Plan F Plan F • Excess Doctor Charges – • Pays 100% of excess charges • Foreign Travel Emergency – • Pays 80% after $250 deductible #1 Selling Medicare Supplement Nationwide! #1 Selling Medicare Supplement Nationwide!

  33. Overview of Plan N Plan N subject to a copay Plan N • Before Plan N benefits take effect, policyholder pays: • $162 annual Part B Deductible • Up to $20 copay for office visit • Up to $50 copay for emergency room visit • Emergency room copay waived if policyholder admitted to hospital • Any Excess Doctor Charges • New Plan Effective June 1, 2010

  34. Premium Savings Q:How do people save money on any kind of insurance (health, car, homeowners)? A:They raise their deductible … And Save $$$$$$$$

  35. Overview of High Deductible Plan F (HDF) Plan HDF subject to a Calendar-year Deductible High Deductible Plan F (HDF) • High Deductible Plan F benefits begin after out-of-pocket expenses exceed calendar year deductible • $2,000 in 2009, 2010, and 2011 • $2,070 in 2012 • Medicare pays its portion whether or not the policyholder has met the Calendar-year deductible for Plan HDF • Second most popular plan • Fastest growing plan • Lowest Price Point

  36. History of HDF • Designed to address Seniors’ concerns of higher premiums • HDF deductible (co-pay) is $2,000 in 2011 – it has been the same amount since 2009 – increases to $2,070 in 2012 • Great choice for seniors who are relatively healthy and can afford to pay out-of-pocket deductible • Per the Centers for Medicare & Medicaid Services (CMS), the annual HDF deductible may or may not increase. Adjustments in the HDF annual deductible amount is subject to the release of the Consumer Price Index (CPI) which generally occurs in October of each year.

  37. Medicare Annual HDF/F+ Deductible Sales of High Deductible Plan F began in 2005

  38. Review

  39. HDF Claim Example • Lisa has an HDF policy • What happens when she has a Part B claim? Total approved Part B Doctor Claim $100 $80 Medicare’s 80% of Approved Charge $20 Customer’s 20% of Approved Charge If deductible is reached then senior owes $0 * * Policyholder must meet HDF calendar-year deductible ($2,000 in 2011; $2,070 in 2012) before benefits begin, and pay their HDF premiums.

  40. Sample Med-Supp HDF Rates The sample UA/First UA Medicare Supplement Plan HDF rates shown below are for a nonsmoker female, age 65. Rates shown are effective [March 1, 2011]. Rates are subject to change and may vary according to area and smoker/nonsmoker status.

  41. Premium Savings Example Agents can help Seniors understand how HDF may be suitable coverage for their health needs AND budget NATIONAL AVERAGE $ 155 Brand X Plan F monthly premium - $ 41 * Our Plan HDF monthly premium $ 114 Monthly Premium Savings × 12 Months $ 1,368 Annual Premium Saved ** × 10 Years $ 13,680 10 Year Premium Saved * UA ProCare, National Average, Age 65 Female, Nonsmoker ** Example assumes no rate increases on either plan; policyholder must meet HDF calendar-year deductible ($2,000 in 2011) before benefits begin For illustrative purposes only

  42. Life Expectancy/Renewals - Total Income Would you pay $1,368 per year to cover a possible loss of $2,070? Average Annual Claims Loss considering all ages is only $620! Source: United American 2009 Claims Data

  43. Claims Data 80% of United American’s Medicare Supplement population up to age 68 has annual claims above Original Medicare of $534 on average 78% of our Company’s Medicare Supplement population up to age 72, has annual claims above Original Medicare of $621 or less on average 71% of our Company’s Medicare Supplement population age 73 or older, has annual claims above Original Medicare of $707 or less on average Source: United American 2009 Claims Data

  44. Saving Premium Over Time Example assumes no rate increase and no increase in the HDF calendar-year deductible

  45. HDF $1,000 Deductible Waiver Post Card • Helps write new business and maintain high persistency • Valid for new HDF policies effective Oct. 1-Dec. 31 • Policyholders only required to pay $1,000 out-of-pocket before benefits are payable by UA • Policyholders required to meet full annual deductible beginning Jan. 1, 2012 • Not available for First UA

  46. Five Great Options for Annual Premium Savings $ 155 Brand X Plan F Monthly Premium - $ 41 Plan HDF Monthly Premium $ 114 Monthly Premium Savings with HDF • Cancer Insurance • Hospital Indemnity Insurance • Life Insurance • Lifestyle Annuity • Reserve Fund Annuity Products and Benefits vary by state

  47. RESERVE FUND ANNUITY UA offers a unique product – RFA assists Med-Supp policyholders with paying HDF calendar-year deductible or copayment RFA’s interest rate is guaranteed at 3% No charge to open, no lock-in time for deposits, no surrender charges, and no commission loads Open with as little as $50 and can deposit up to $4,000 per year Can be added to Plans A, B, D, HDF, G, K and L Not Available in NY and VT 3%

  48. Three Interest Rate Examples * Accumulating monthly (compounded annual yield)

  49. What We Offer Our Producers and Policyholders today! Lifestyle Single Premium Annuity • Minimum 3% Interest • Withdrawal Charges Eliminated after Year 6 • Deposit • Minimum $5,000 • Maximum $20,000 • Issue Ages • 0-80 • Hospitalization and Nursing Home Waiver of Withdrawal available in most states • Not available in: • CO, MA, or NY

  50. Company History Introduction Industry Ratings A+ (Superior) Financial Strength Rating from A.M. Best Company for more than 30 consecutive years (as of 6/11) AA- “Very Strong” Financial Strength Rating from Standard & Poor’s (as of 5/11) • United American opened its doors in 1947. • We gained recognition as one of the nation's leading writers of individual Medicare Supplements. • Source: NAIC 2010 Medicare Supplement Insurance Experience Report, June 2011

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