This is Christopher West, I want to do a brief for those agents who work with seniors in the Medicare space right now, as a result of the Affordable Care Act, we’re going to have a lot of seniors being shoved from their employer plans into the private market, and this is why you come to this article.
We’ve got to help them understand that there are more options than what they’re being told right now. What is happening in AT&T can be a serious issue for 2015, they are shedding their very lucrative employee benefits program gradually.
They’ve hired one insurance broker to handle all the benefits for all of their employees which is the Aon Group, it is headquartered in Chicago Illinois. Now the situation for AT&T is that there are almost 310 thousand retirees across the country who are affected by their action, they have to select either Medicare Supplement Plan or the Part D drug plan through this program.
It is called exchange that they’ve set up through Aon. If they buy Part D drug plan through Aon, then entitles them to a $2,700 benefit per year in a health care reimbursement account which they can use to pay the premiums for their Medicare Supplement Plan, even though they do not buy the plan through Aon, but to trigger a benefit.
They have to buy either their Medicare Supplement plan or the Part D drug plan through Aon and here is the problem, let me show you an example, there’s a 75-year-old man who lives in Charleston South Carolina, nonsmoker and these are the benefits being provided to him as options from the Aon group, what you see on the right side of your screen is the option there, if he wanted Plan F rather than shopping the entire market for Plan F, they’ve chosen the most expensive plan in the marketplace, one of the reasons why is that insurance agents, insurance brokers want to make a percentage of the premium. So if I’m going to offer Plan F with one premium and my incentive is profit, I’m not saying that is their incentive. I’m just hypothetically speaking here, then I will show the highest rated plan, highest cost plan in the marketplace. that’s what we’re doing here.
So 75-year-old male, nonsmoker, zip code 29464, this is his only option for Plan F. Now he could pick Plan A or Plan K, which no one buys because they are $89 and $11 higher than Plan F, the only option for Plan F is to 3404. So how does that compare to the independent marketplace which we’re a part of?
All the Medicare plans are the same, the only difference is how much premium you pay for it. Here’s a snapshot with same zip code, same age, same everything, showing all the companies that are available. My recommendation in this case would either be Manhattan Life or New Era, both are great companies.
So what difference does it make here? If you want to see what everybody else is showing in the area, you’ve got these rates, you’ve got Aetna, which is a good company too. For plan A which no one ever buys it, you’ve got AARP at $116. And then for Plan F, this is the one that most people are going to select.
Now this is not as dramatic as you’re going to see in the next example, but this is just another example, Plan L, which no one purchases $69 instead of $111 that they’re offering. Why is there discrepancy here? You can see that, this would save a 75-year-old man a very significant $57.04 per month which means $684 dollars a year.
He would save by having someone shopped the market for him and give him an honest opinion. Now let me give you a different example and this is a real example, a 80-year-old lady called me and she was really upset, because she couldn’t get a plan in her marketplace through Aon, now Plan F for an 80-year-old in Michigan is simply not in the cards.
Aon does not offer it, you can see the plans that they offer here, Plan K and Plan L are very competitive. We are showing the two plans, which cost $220 a month, that’s how that compares to the real marketplace.
The only one most people are going to buy is plan F, but it’s not available. They want to sell it to these people for $220. But in the independent market, it costs $126.68, which is a huge difference, it can save her $93.32 per month, which is $1119.84 a year by shopping with somebody independent.
They won’t give here plan F, if she could, she still could save another $50a month and do not have to do plan, in which has co-payments, but they won’t give her that because she’s 80 years old. But with the 80-year-olds, many companies reduce their commission for them, and in this case, they’ve chosen not to offer that benefit to them.
So for agents, here’s how we have to navigate this client, we must first go through Aon for one plan, I recommend going through them for the drug plan. Then shop the market for these people, seniors need to shop this with an independent agent, get a second opinion on the plan that they want, which is most likely going to be plan F. Why do I say Plan F? Typically I like Plan G better, when you’re in a guaranteed-issue situation, the government says that you’re only allowed to have certain plans through guaranteed-issue rights.
Then after you buy the drug plan through them, shop with an independent agent, get the plan that you want and compare it to what you’re being offered with the very limited choices right now. Once you’ve got a plan with Aon like the drug plan, you can pick whichever medicare supplement you want. And then use the health care reimbursement account to pay both premiums again, that $2,700 benefit is now available to you, once you’ve selected one plan at least through the Aon group.
I’m very sad to hear what’s going on with these retirees right now, but they’ve got to know that the better solution is to find an independent broker. If you’ve got any agent who says that there’s only one plan for you in a market place, you need to fire him and find somebody who’s independent, who does not work for one insurance company, who does not tell you a lie.
If he’s telling me that, there’s only one plan F in the marketplace you have to purchase, I will stick to it and I will see that is $234 while the right one is $177. I have been giving others the best deal in the past 19 years, nobody would like to pay $234 for something they can get with $177.
That’s what I want to tell you, if you have any questions, you can contact me at Medicare agent training.com. Have a great day.