How to Match Medicare Supplement Plans to Client Profiles

Understanding Client Profiles for Medicare Supplement Plans

A client profile is an individualized assessment of a client’s circumstances, including their age, location, income level, health status, and likely utilization of benefits, in order to find the best Medicare Supplement carrier and policy for them. Agents who rely on Medicare Supplement client profiles are able to pair clients with personalized Medicare coverage options.

The reason to use client profiles in Medigap plan selection is that no single carrier or plan is consistently the right fit for all clients. The best fit depends on the combination of a carrier’s stability and rate history and a client’s individual needs, characteristics, and circumstances.

Taking a systematic approach to Medigap plan selection allows agents to make personalized recommendations to clients, reducing complaints and requests to switch policies.

These three factors make up the core of a Medicare Supplement client profile:

• Age and enrollment timing
• Health status and underwriting risk
• Income level and tolerance for out-of-pocket costs

We’ll take a look at all three of these factors and how to compare plan features to client needs.

Key Factors in Matching Plans to Client Profiles

Certain Medicare Supplement plans, like Plan N and Plan G, may be the most popular, but they aren’t right for every client. For example, Plan N offers low rates for healthy buyers, while Plan G may be a better fit for those with higher utilization costs. Age, health, and income all play a role in determining plan fit, and matching plans to client profiles improves outcomes.

Medigap agents should start by assessing client profiles and then comparing carriers based on their plans and underwriting process in the client’s location and risk category. By considering individual variables in addition to general plan features, agents can increase satisfaction and reduce the chance of complaints, policy switching, reputational risk, and payment shock.

Here’s how each of the three factors fits into a client’s profile:

Age and Enrollment Timing Considerations

Age at enrollment is one of the most important factors to consider when comparing Medigap policies. A client’s age and enrollment timing directly shapes their initial premiums and their long-term outlook. Choosing the wrong policy now can limit their options later.

Why does Medicare Supplement enrollment age matter? The Medigap Open Enrollment Period is a one-time window for seniors turning 65 to enroll in a Medigap policy without facing medical underwriting. For six months, carriers aren’t allowed to turn applicants away or charge them higher premiums based on their medical status.

Clients enrolling outside of this period, or after they turn 65, may have fewer options, especially if they have pre-existing conditions—unless they have guaranteed issue rights due to a special circumstance, such as moving out of a service area or losing existing Medigap coverage.

Even during the Medigap Open Enrollment Period, age matters. Depending on the geographic location, Medigap carriers set premiums in one of three ways:

• Issue age: Issue-age policies are priced by the client’s age at enrollment. Although rates may still increase over time, they don’t rise simply because the client gets older.
• Attained age: Attained-age policies set premiums based on the client’s current age. Rates may rise based on external factors, such as inflation, and as the client’s age increases.
• Community-rated: Community-rated policies charge everyone in a geographic area the same rate, without factoring in individual age or medical history.

When matching plans to clients, it’s not just a matter of issue age vs. attained age: a carrier with an ultra-low introductory rate may raise premiums steeply after the introductory period. Carriers with slow and stable rate increases tend to provide the best value over time.

Health Status and Underwriting Impact

A client’s health status can also impact their policy options, particularly those with pre-existing conditions. In many states, carriers are allowed to medically underwrite applicants outside of their Open Enrollment period and certain guaranteed-issue Medigap scenarios.

Medicare Supplement underwriting means carriers can use an applicant’s medical history and conditions, including medication use, to assess eligibility and set premiums. Carriers use their own criteria to accept or deny applicants, which can be based on specific diagnoses and other granular factors. Agents need to consider whether an individual client’s health history will be accepted or rejected based on the carrier’s underwriting guidelines.

Carriers who do accept seniors with complex health histories may impose a surcharge, or may provide preferred health discounts for those in better health. This can make for a difference of 15–30% between carriers, even for the same plan, based on their underwriting process.

Agents can proactively address Medigap health questions with the following approach:

• For applicants in good health, look for carriers with preferred health discounts.
• For those with chronic but controlled conditions, such as diabetes or hypertension, compare carriers’ underwriting process and potential surcharges.
• For applicants with a complex health history, including recent hospitalizations, look closely at each carrier’s underwriting guidelines.

Pre-existing health issues don’t always mean a client will go through a Medicare Supplement underwriting process, but it pays to be proactive about it if they do.

Income Level and Out-of-Pocket Prefunding Ability

Income level can have a surprisingly big impact on a client’s plan preference. It’s not just about whether they can afford the premium and out-of-pocket costs, but whether they prefer to pay a predictable premium vs. deal with unexpected costs. A higher-income client may choose the lower premium because they’re more comfortable paying out-of-pocket expenses, while a lower-income client may prefer a higher monthly premium without any copays.

Here’s how different income brackets tend to prioritize Medicare Supplement plan costs:

For many clients, it will come down to a decision between Plan G vs. Plan N, two of the most popular Medicare Supplement plans. Plan G tends to be the most expensive, but covers almost everything not covered by Original Medicare, including copays and excess charges. Plan N is cheaper, but includes $20 copays for doctor’s visits and $50 for emergency room visits.

But these aren’t the only two choices, and agents need to be prepared to help clients understand their options when it comes to Medicare coverage affordability. By considering the trade-offs between Medigap premium vs. out-of-pocket costs, they can make a decision based on their current financial position and tolerance for unexpected expenses.

Evaluating Carrier Stability and Underwriting Practices

Client profiles are an important part of Medicare plan selection, but carrier stability and their underwriting practices matter too. Carrier stability is a measure of a carrier’s financial strength, rate history, and policyholder block—all of which can impact their ability to honor claims and offer sustainably priced policies that avoid sudden rate spikes.

Medicare rate stability can matter as much as, or more than, initial premiums, especially when it comes to low-rate introductory offers. According to the American Academy of Actuaries, premium changes are driven by factors including medical costs, prescription drug spending, utilization trends, and local market dynamics. Here are four key factors to pay attention to:

• Financial strength ratings: Firms like Moody’s, S&P, and A.M. Best provide Medicare Supplement carrier ratings, a good indicator of their capacity for paying out claims.
• Rate increase history: Small and predictable rate increases are preferable to sudden or unexpected spikes, which could point to actuarial issues.
• Block size/market share: The size of a carrier’s policy block in the client’s market can demonstrate their stability, with larger block sizes being generally more stable.
• Underwriting practices: Carriers who aggressively court market share are more likely to have to raise premiums due to a higher-risk pool of policyholders.

A carrier’s stability isn’t universal, and may be regionally specific, especially if their market share and block size vary from one state to another. Clients should rely on more than Medicare insurance company reviews to evaluate carrier stability, and search for a local Medicare agent with first-hand expertise in their market.

Comparing Plan Features to Client Needs

Once you’ve created a client profile and vetted carriers for stability, you’ll need to compare the actual features of the plan: premiums, deductibles, cost-sharing, medication coverage, network access, and more. Medicare Supplement plans are standardized across carriers, with each plan, including G and N, offering a consistent set of benefits.

Despite that standardization, carriers set their own premiums and underwriting practices, and may have different levels of service quality and claims processing times.

Here’s how to weigh up these variables to ensure a specific plan and carrier is the right fit:

Premiums, Deductibles, and Cost-Sharing Levels

Premiums are often the first thing a client considers when comparing plans, but what’s more important is how those premiums impact deductibles and cost-sharing levels. Cost-sharing Medicare plans like Plan N have lower premiums but higher out-of-pocket expenses than higher-premium, comprehensive options like Plan G.

For example, here’s a comparison of Medigap Plan G vs. Plan N:

When making a Medigap premium comparison, agents need to highlight these differences and their trade-offs. Medicare Supplement deductible coverage is generally the same across plans—neither Plan N nor Plan G covers the Part B deductible—but very high-income clients may consider high-deductible Plan G, which pairs lower premiums with a $2,950 deductible.

Drug Formularies and Medication Coverage

Medigap plans don’t cover prescription drugs, so many clients will have to factor Part D plan selection into their enrollment process. Some carriers offer both Medigap and Medicare Part D drug coverage, but they’ll be separate policies. A client’s expected drug utilization—including their current medications, doses, and pharmacies—should be part of their client profile.

Here’s what agents need to keep in mind when it comes to Medigap and prescription drugs:

• Formulary: A Medicare drug formulary is a list of drugs that are covered by a specific policy; always confirm that a plan covers a client’s necessary medications.
• Drug tiers: Drug tiers determine how much a policyholder will pay out-of-pocket, with more expensive specialty drugs incurring higher copays than generic options.
• Network: Drug prices can vary widely at in-network vs. out-of-network pharmacies, so confirm that a client’s preferred pharmacy is within their plan’s network.

Choosing the right Part D coverage can have a big impact on a client’s out-of-pocket expenses, as much as or even more than their Medigap policy. When matching client profiles to policies, consider whether a plan’s network and formulary will meet a client’s prescription needs.

Network Access and Provider Availability

Provider availability is significantly less of a concern with Medicare Supplement than with Medicare Advantage network restrictions. That’s because any health care provider who accepts Medicare accepts Medicare Supplement, ensuring Medigap doctor access even in multiple states, in rural areas, or while traveling. There’s no Medicare Supplement provider network to worry about.

That said, Part D drug policies may have a preferred pharmacy network, and location can still affect Medigap carrier pricing and availability. Carriers may operate in some states but not in others, or they may charge more in some areas than others. Even within states, rates can vary from one county or ZIP code to the next, especially for community-rated policies.

So while network access is a point in favor of Medigap, agents still need to consider Medicare plan provider availability when matching client profiles to policies.

How to Match Medicare Supplement Plans to Client Profiles

When a client comes to you wondering how to choose a Medicare Supplement plan, taking a systematic approach works best to ensure a consistent client experience and accurate Medicare plan matching process. Follow these practical Medigap plan comparison steps:

1. Create a client profile: Make a record of the client’s age, health status, medications, income level, and enrollment timing to inform your product recommendations.
2. Assess enrollment rights: Is the client enrolling during their Open Enrollment period or with guaranteed-issue rights, or will there be an underwriting process?
3. Screen carriers: Exclude carriers who aren’t available in the client’s location, aren’t a good fit for their health status, or have an unstable rate history.
4. Consider plans: Start matching plans to client profiles. For example, Plan G is often a match for low-income clients, while Plan N may fit higher-income or healthy buyers.
5. Compare premiums: Calculate premiums for each of your pre-screened carriers, with surcharges and preferred health discounts factored in.
6. Include Part D coverage: Determine whether the client’s current or likely medications are covered by the plan’s formulary and available at preferred pharmacies.
7. Review and recommend: Make a recommendation based on all of the above factors, including the carrier’s financial strength and rate increase history.

Seniors in need of Medicare Supplement agent help can search AAMSI’s directory of licensed Medicare agents by state or ZIP code to get personalized guidance.

Benefits of Matching Carrier and Plan to Client Profile

The benefits of Medicare Supplement matching go beyond ensuring that each client finds the right personalized Medicare coverage benefits. It increases Medicare plan retention, reducing switching costs for clients and agents and contributing to long-term Medigap satisfaction.

Here are just a few of the benefits of matching plans to profiles:

• Reduced switching: Switching plans can be a hassle, especially when underwriting is involved, although clients in qualifying states may be able to use the Medigap birthday rule; choosing the right plan during Open Enrollment reduces the risk.
• Lower costs: Factoring in a client’s situation as well as the carrier’s financial stability leads to more consistent rates and fewer surprises in the long run.
• Better outcomes: Clients with affordable premiums, predictable out-of-pocket expenses, and a suitable prescription drug plan are more likely to get the care they need.
• Stronger relationships: Providing personalized Medigap recommendations improves the client-agent relationship and cements the agent’s role as a trusted advisor.

For seniors struggling to navigate the Medigap plan selection process, a local agent can be an invaluable resource. Use MedicareSupp.org to find a licensed local agent who can match your profile to the best Medicare Supplement plans in your ZIP code.

Frequently Asked Questions

How do I choose the best carrier and plan for my Medicare needs?

A licensed Medicare agent can help you build a client profile based on your age, income, health status, and utilization of healthcare services. You can use this profile to compare Medicare Supplement plans and carriers based on your specific coverage needs rather than general information. This allows you to choose a policy that fits you for the long term—not just the one with the lowest premium.

Can my health status affect my eligibility or premiums?

Yes, your health status can affect your Medicare Supplement eligibility or premiums if you enroll or switch plans outside of your Open Enrollment Period. Carriers can use medical underwriting to charge higher premiums or even deny coverage. Choose your carrier carefully if you need to switch outside of the Open Enrollment Period or other guaranteed-issue situations.

How does income influence my plan preference?

Your income level can influence your Medigap plan preference by impacting your ability to pay out-of-pocket costs. Higher-income clients may choose a lower-premium plan with deductibles and copays. Seniors on fixed incomes may prefer a plan with a higher premium but with fewer out-of-pocket costs. Consider whether your budget allows for unexpected expenses.

What should I prioritize: premiums or out-of-pocket costs?

Whether you should prioritize premiums or out-of-pocket costs depends on your medical and financial situation. If you have chronic conditions that require frequent medical appointments, then you may want to prioritize a plan with low out-of-pocket costs. If you’re healthy and can afford the occasional copay, then a low-premium plan may be more cost-effective.

How important is carrier stability when selecting a plan?

Carrier stability is important because it can indicate how likely a carrier is to raise premiums unexpectedly. Carriers with a stable rate history and good financial ratings are more likely to raise premiums at predictable rates, while a less stable carrier may raise them more steeply. Choosing a stable carrier can help you avoid having to switch plans when rates rise.