Plan F is Dead
As you may have heard, the Plan F Medicare Supplement is going away in 2020. The big question is - who would want the Plan F to go away? It's not insurance agents, it isn't consumers, and it's not even the insurance companies. So who is it?
I am sorry to tell you it is the Federal Government. Specifically, the Republicans believe that first-dollar coverage is costing Medicare too much money. There have been two independent studies done, and both studies concluded that to not be true. In other words, a Medicare beneficiary is NOT more likely to have a treatment with a Plan F than they are with a Plan G. However, the Feds had their minds made up that there is no need for first-dollar coverage.
So, in the year 2020 the F Plan will no longer be offered to new enrollees. The lawmakers in D.C. are looking everywhere they can to pinch a penny to save Medicare. I hate change but since I have had several months to ponder this, I believe that we as agents are sitting on a gold mine, if we're ready to stake our claim.
Opportunities, not problems
These kind of opportunities don't come around everyday, so consider the opportunity you have before you. Your current policyholders will not have to give up their Plan F policies, but most likely the premiums on a block that is no longer active in new sales will see significant rate hikes.
Let's take a quick trip back to look at Plan J. Once it was pulled from the market and no new sales came in, those premiums had the highest rate increases. I will bet the same holds true for Plan F starting 2021 or earlier. My recommendation is to start selling the Plan G now, and take a serious look at your block of Plan F business. I would recommend moving that block to Plan G with an add-on of either a final expense product or a good cancer plan.
If you have already done the math to package Plan G with final expense you should see it's a winner. By doing this you will be giving your clients more benefits than before, and your renewals have been enhanced. It is proven that consumers purchase insurance for benefits - not to save money. If you position yourself and business correctly, you can take advantage of this change the Federal Government has placed on your policyholder, and you will end up helping your client and your business.
I have never liked the fact that the insurance companies have been taking $200 off the commissionable premium for a $147 benefit. Consider writing Plan G and a final expense on your next sale, and when replacing existing business it should be an automatic process.
Contact Kirk Sarff in our office for his recommendation on the best final expense in the marketplace. In this business we're always adapting to changes. Make some minor changes and you will profit!
Happy selling and we appreciate all your efforts!
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