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Although Mostly Closed, the Donut Hole is Still an Issue for Consumers

A recent Boston Herald article describes the trouble that some seniors have paying for prescriptions in the Medicare coverage gap, commonly referred to as the “donut hole.” The article tells the story of Judith Pais, who ran out of her medication in November and had to wait until the new year to purchase her prescriptions because the cost of her medications had “skyrocketed” from $120 per month to more than $500 after she entered her Part D plan’s coverage gap.

As the article explains, the coverage gap in 2019 begins after “a patient has spent $3,820 on covered drugs. Once you hit the gap, patients pay 25% of the plan’s cost for covered brand-name prescription drugs and 37% for generics.” Because of the high price of her drugs in the donut hole, Ms. Pais “immediately decided to cancel the prescription and used expired, leftover medication to get her through the rest of the year.”

As the article says, she’s not alone. According to Leigh Purvis with AARP’s Public Policy Institute, “the coverage gap has been slowly closing, but people are hitting the gap sooner and sooner because of sky-high drug prices.” The result is that people struggle to pay for prescriptions and may go without needed medication.

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Renewing As Is – Medicare Consumers are Staying Put

The fourth quarter is a stressful time. Not only do brokers have to deal with the same year-end stuff as everyone else, like getting ready for the holidays, it’s also the busy time of the year in the insurance industry. And that’s true whether you sell group, individual, or Medicare products.

For Medicare, the annual election period runs from October 15 through December 7, a mere seven-and-a-half weeks. During this time, we’re expected to renew all of our existing Medicare Advantage and Medicare Part D business while trying to write some new policies. That’s difficult to do because, as we’ve already said, our clients are also busy at this time of the year.

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An Uneducated Decision

This will come as a surprise to absolutely none of you, but, according to Forbes, “Healthcare Consumers Lack Knowledge Of Basic Health Insurance Terms.” Actually, that’s the name of a December 3 article that summarizes the findings of a recently released survey by Policygenius that shows, among other things, just “how challenging health insurance is for many American consumers to understand.”

The survey, with a sample size of 1,500 people, found that “many people avoid care due to uncertainty over their coverage,” with about half of respondents unable to correctly answer whether any of the essential benefits they were asked about are covered on their plan. The survey has been conducted for the past three years, and the “cumulative findings suggest that people are increasingly confused about the law and their coverage.”

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When the Trump administration decided in 2017 to stop reimbursing insurers for cost-sharing reductions on silver-level plans for those who qualify, carriers responded by raising the price of their silver-level plans across the board, a practice known as “silver loading.”

A recent Fierce Healthcare article reports on this practice, noting that the effect on consumers is vastly different depending on whether they are receiving a premium tax credit or not.

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The Benefits of Working from Home

We recently posted an article entitled “Your place or mine? Where do you sell health insurance?”. In it, we discussed the pros and cons of meeting clients at their homes or places of business versus having them meet you in your office. The article made the assumption that all agents have an office that they go to, but that’s definitely not the case. Some very successful agents have made the decision to work from home, foregoing an outside office and the benefits that come with it. In this article, we’ll take a look at some of the benefits of working out of your house.

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Your place or mine? Where do you sell health insurance?

These days, more and more insurance is being sold online or over the phone. This is certainly a more efficient way to do business. It allows agents to sell business without ever talking to the client. Quoting and enrollment tools like Quotit can help brokers put their business on auto-pilot; brokers can make sales even when they’re not at work.

Unfortunately, not every client likes to do business this way, and that’s especially true of business owners shopping for group health coverage for their employees. This type of sale usually requires a face-to-face meeting and a good amount of consultation to find the right solution for the client. The same is true of Medicare business. While more people are signing up for coverage over the phone, many clients prefer an in-person meeting so their son or daughter can attend and help them make a decision.

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Where do you get your business?

Insurance agents get leads from a variety of sources.

  • Some agents buy leads, often leads that have been sold multiple times to multiple agents, which means the prospects gets multiple calls and emails and might already be annoyed by the time they hear from you.
  • Some agents try to create their own leads by writing great content and optimizing their website.
  • Some agents are active on social media, working to establish themselves as an expert in their online community.
  • And most agents try, with varying degrees of success, to work primarily off referrals.
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Give Yourself a Raise

Everyone likes getting a raise, right? The problem is, business owners tend not to think of the money they make in the same way an employee does. Employees trade time for a paycheck and measure their earnings in terms of rate of pay – the wage they earn per hour or the salary they earn per year. Business owners, on the other hand, invest their time, money, and energy into the business in hopes of earning a profit. The harder they work, the more they can earn – at least that’s the goal.

However, it might be helpful for agents to adjust their thinking about the money they make. What if you thought a little more like an employee and measured your success in terms of dollars per hour? If you do that, then you can change your goal from earning a handsome profit to increasing the amount you make on an hourly basis, and that’s a lot easier to control.

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DOI Warns Agents About Unauthorized Insurance

In the state of Texas, the Department of Insurance recently sent out a bulletin warning health insurance agents and third-party administrators (TPAs) about the dangers of “assisting a company engaging in the unauthorized business of insurance.” While the bulletin was specific to Texas agents, it’s a message that brokers across the country should take to heart.

The letter, dated August 12, 2019, explains that “New types of health insurance or insurance like products are being marketed to…consumers by unlicensed and unauthorized companies.” Specifically, the letter says, “companies may claim to be a health care sharing ministry or other innovative business without complying with the requirements” that would exempt them from state regulations.

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Those who oppose the single-payer health insurance plan promoted by Bernie Sanders in his 2016 presidential campaign, and supported by most Democratic candidates in the 2020 race, often argue that competition is good for the market; it helps improve quality and reduce costs because consumers shop with their wallets. Many insurance agents would agree with this assessment: competition, in most cases, is good for consumers. However, what is often left unsaid in the conversation about competition in the health insurance industry is that it doesn’t really exist, at least not to the extent that we would like to believe it does.

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California Consumer Privacy