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What You Need to Know about Medicare Advantage in 2017

What You Need to Know about Medicare Advantage in 2017

What you need to know about medicare advantage in 2017 is that in 2016 alone, Medicare Advantage plans added approximately 900,000 new members, even though enrollment is growing at a slow pace. The future of Medicare Advantage is very lucrative for the insurance industry. This makes it an excellent sales opportunity for an insurance agent who is looking to capitalize on a strong product line.


What Makes Medicare Advantage Unique

In comparison with other types of health insurance, Medicare Advantage is one of the safest plans from the perspective of the consumer. The managed private care version of a federal health program for seniors topped almost 18.7 million at the beginning of December of 2016.

The most popular companies for enrollees were United Health, Kaiser Permanente, Humana, and Aetna. CMS actually sanctioned one of the other big players in the Medicare Advantage market in early 2016 for failing to comply with Medicare rules set forth by the agency.

Cigna only enrolled approximately 4,000 members in 2016 potentially as a result. This was largely due to the fact that Cigna was not able to participate in the annual enrollment period due to the sanctions from CMS. That enrollment period ran from October 15th to December 7th. The membership for Cigna’s Medicare groupings may drop significantly in the coming months if they are not able to turn this around.

Enrollment exploded for other new players in the Medicare Advantage arena, including insurer Centene. They have been investing a lot of time and funds into the Medicare Advantage business and enrollment grew from 34,000 last year to more than 302,000. The other big move for Centene in 2016 was the acquisition of Health Net.

Why Medicare Advantage Now?

Although it would appear at face value that the Medicare program has grown relatively slowly to the tune of 5% in the last 12 months, it has slowed in the last couple of years. In 2014, for example, the growth was 9.8% and at the end of 2015 it was at 6.8%.

The funding cuts associated with the Affordable Care Act began in 2012 and were phased in over the last couple of years. The cuts were primarily geared towards off-setting the costs of Affordable Care Act exchanges and bringing payment rates in line with traditional Medicare. Rates for Medicare Advantage are based on the utilization and trends associated with traditional fee for service Medicare plans and then adjusted for plan members’ risk scores.

Currently experts do not know whether or not the benefit designs for Medicare Advantage have thinned out because of funding cuts. Premiums, however, have stayed relatively flat although out of pocket cost caps have increased to 25% on average since 2011. Annual growth in Medicare Advantage enrollment is expected to hover between 5% and 7% in the next couple of years.

Some major players in politics, however, want to turn Medicare into a premium support system allowing beneficiaries to receive vouchers to have traditional Medicare coverage or a private plan. More than 2,000 different Medicare Advantage plans will be offered and available to seniors in 2017. However, up to one quarter of all Medicare beneficiaries will have a choice of plans limited to three or fewer insurers.  

Being aware of all the benefits and challenges associated with selling a particular product can help to position an insurance agent in the right way. Partnering with an agency that understands the needs of the modern insurance agent and customer can also make the selling and closing process much more effective.

If you’ve been thinking about getting into Medicare Advantage or expanding your business with this particular product, now is a good time to capitalize on a major opportunity. If you need help knowing where to start, contact our office to learn more about how we can help you start or grow this part of your business.

Key Takeaways In This Article

  • Don't assume your customer doesn't want a Medicare Advantage plan
  • Use a needs analysis to asset whether a Medicare Supplement or a Medicare Advantage is the right fit for your customer.
  • The opportunity is growing for Medicare Health Plans.

Over to You

We'd love to hear your thoughts in the comments below on:

  1. Why do you or don't you selling Medicare Advantage products?
  2. In your area, what do you run into more often? (Medicare Supplements or Medicare Advantage)
  3. What are your personal views on Medicare Advantage products? Good or Bad?

If you have any questions, please leave a comment below. We will carefully read each one of them. Happy Selling!

About the Author Matthew King

Matthew King is a co-owner of TR King Insurance Marketing and partner at Independent Life Insurance Agent Association. When he's not creating processes, content, and developing SEO strategies, he likes to immerse in gaming with his wife and friends.