2012 and Beyond

MEDICARE – THE NEW NORMAL

U.S. Medicare ChiefDonald BerwickOctober 5, 2010*

“Those who wish to preserve status quo are not going to be contributors to our nation’s future. They can’t be effective partners.

All of us will have to change the way we do business.”

*http://www.healthreformgps.org/wpcontent/uploads/he10062010_berwick.pdf

MEDICARE SUPPLEMENT2011 YEAR-IN-REVIEW

Baby Boomers began turning 65 (10,000 daily).

SMS records 79 rate increases from various carriers in various states.

Commissions decrease on replacement and guaranteed issue business.

On-line and telephone-sales for Medicare Supplement increase.

Re-insurance pacts for smaller carriers dry up.

Larger carriers increase market share.

Larger carriers continue to develop strategic partnerships for Medicare recipients (Wal-Mart/Humana, Aetna/CVS).

A+ carriers enter market place (Aetna and CSI – A Berkshire Hathaway Company).

Large companies restricting, or canceling, retiree health benefits.

Fewer carriers offer new Medicare Advantage plans during AEP.

UNITED STATES MEDIGAP ENROLLMENT & MARKET SHARE BY LEADING CARRIER – MAY 2011

http://www.uhcmedsupstats.com/state.php Medigap Enrollment Medigap Market Share

UNITEDHEALTHCARE INS CO* 2,935,358 30.46%MUTUAL OF OMAHA GRP 1,035,090 10.74%WELLPOINT INC GRP 583,483 6.05%HCSC GRP 477,125 4.95%CONSECO GRP 348,684 3.62%BCBS OF MI GRP 219,999 2.28%HIGHMARK GRP 195,916 2.03%WELLMARK INC GRP 176,009 1.83%BCBS OF MA GRP 172,913 1.79%BCBS OF FL GRP 160,960 1.67%GENWORTH FIN GRP 139,920 1.45%BCBS OF NC GRP 126,708 1.31%BCBS OF MN GRP 126,231 1.31%LIBERTY NATL GRP 124,310 1.29%BCBS OF AL GRP 123,468 1.28%AMERICAN FINANCIAL GRP 122,496 1.27%BCBS OF KS GRP 117,745 1.22%STATE FARM GRP 113,358 1.18%ARKANSAS BCBS GRP 103,058 1.07%BCBS OF NJ GRP 93,868 0.97%All Other Medigap Carriers 2,140,025 22.21%

Total 9,636,724 100.00%

MEDICARE SUPPLEMENT 2012 THE NEW NORMAL

Medicare will be a highlighted topic due to the 2012 election cycle creating consumer confusion.

More companies discontinuing retiree health benefits.

Larger A+ carriers either eyeing or planning Medicare Supplement market entry.

Fewer, IF ANY, smaller carriers planning Medicare Supplement market entry due to inability to capitalize reserves without re-insurance.

Increase of on-line and telephone-sales of Medicare Supplement policies as carriers increase technological platforms (DIRECT TO CONSUMER).

Continuation of employers dropping retiree health programs while 10,000 Baby Boomers turn 65 daily.

Further restrictions for advertising and solicitation for Medicare Supplement (re: Ohio/NAIC guidelines)

2012 MEDICARE SUPPLEMENT MARKETING PLAN

Our job at Senior Marketing Specialists is to help YOU, the agent, provide your clients with the Medicare Supplement that

best suits their needs. Whether it’s the lowest price, rate stability, company ratings or brand recognition, we have the

products you and your clients need!

• Each insurance company sets its own premiums. It is important to ask how an insurance company prices Medigap policies. How they set the price affects how much you pay now and in the future.*

• Cost is usually the only difference between Medicare Supplement policies with the same letter sold by different insurance companies.**

WHAT MEDICARE SAYS

*http://www.medicare.gov/find-a-plan/staticpages/learn/how-insurance-companies-price-policies.aspx

**www.medicare.gov/publications/pubs/pdf/02110.pdf

Your Medicare health or prescription drug plan can change how much it costs and what it covers each year. Even if your plan’s cost and coverage stay the same, your health or finances may have changed. Review your plan each year to make sure it will still meet your needs. If you’re satisfied with your current coverage, you don’t need to change plans.*

WHAT MEDICARE SAYS

*www.medicare.gov/publications/pubs/pdf/10050

Example: Age 65 Plan F female

Medicare Part A FREE

Medicare Part B $ 99.00

Medicare Supplement F* $130.00

Total premium $229.00

Plan F contains comprehensive coverage for everything Medicare Insurance doesn’t cover as long as the charge is approved by Medicare (other plans may be available with lower premiums).

MEDICARE + MEDICARE SUPPLEMENT CONSUMER COST

Results:

Contacts 75% or 750

Appointments 60% or 450

Presentations 80% or 360

Sales 60% or 216

Out of 750 “workable leads”, 534 did not buy. WHY???

267 did not qualify due to health, group, finances, MA, Medicaid etc…

267 were not interested or satisfied with their current

plan.

MEDICARE SUPPLEMENT1,000 PROSPECTS/LEADS

Out of 750 “workable leads”

267 prospects/leads were not interested or satisfied with their

current plan.

THIS MARKET IS NO LONGER “ONE SIZE FITS ALL” BASED SOLELY ON

PRICE!

MEDICARE SUPPLEMENT1,000 PROSPECTS/LEADS

Rate

Stability

Company

Ratings

Claims

Payment

Brand

Name

INTRODUCES: THE MEDICARE SUITE

THE MEDICARE SUITE

Company

Ratings

Claims

Payment

Brand

Name

Rate

Stability

At SMS, for a company to be included in “The Medicare Suite”, they must meet at least three out of four criteria.

Using our Quote Engine, two to four of these companies are consistently shown in the top ten carriers, with their premiums being within only a few dollars a month difference!!!*

LOOK FOR NEW COMPANIES IN 2012!

Our quote engine is constantly being updated to allow you access to the carriers you need to help you and your client make the best decisions.

SMS QUOTE ENGINE

Working with SMS Top Commissions

Discounted Mail Lead Systems

Company Approved Advertising

Turning 65 Lists

NEW Medicare Presentation

Quote Engine

Expert Medicare Marketers

Incentives

WE APPRECIATE YOUR BUSINESS!

Please email any questions to us at amanda@smsteam.net

Senior Marketing Specialists

1-800-689-2800 | www.smsteam.net