Building and Transferring a Block of Medicare-related Policies

The following article was written by Senior Marketing Specialists’ very own Vice President of Growth and Development, Dan Mangus, and was published in America’s Benefit Specialist magazine for August and September 2023.  

To access the full magazine and original article, click here. You can find this article on pages 38-39.

     A Medicare block of business is comprised of many unique elements. They include marketing, needs analysis, client demographics, buying triggers, product design, compliance, enrollment methods, certification, carrier contracts and client services.

     Any of these items can be considered unique when building and maintaining a block of business around those eligible for Medicare-related programs. In addition to the items listed above, you can add regulatory bodies like specific state laws, federal laws and regulations, and carrier rules and abilities. 

     Let’s examine a few of these from the perspective of building and then transferring a block of business in this market segment.

     Building a block in this space first requires a proper foundation to build a carrier contract upon.  Since any policies you write will be tied to your writing number, you will need that number, if possible, linked to a tax ID instead of a Social Security Number. A tax ID number can play a vital role in later transferring business, so an agent going into this space needs to form a corporation as a basis for your business structure. 

     Then an agent will need to prepare a proper product portfolio. Carrier selection must be carefully considered to meet customer needs and expectations. Since every carrier in the Medicare Advantage and Prescription Drug space is federally regulated, they are required to have you complete annual certification requirements. Therefore, every carrier you add will add the responsibility to maintain that contract.

     Consequently, you will want to include only carriers needed to complement your portfolio. You will also need to attain and retain the state licenses required to service clients throughout your geographic marketing area. The practice of early certification and license renewal will protect your business during both scheduled and unscheduled transitions.

     Once your business structure is in place and you have a portfolio of carriers and products, you can begin building a client base. The prospects who respond to your marketing efforts will likely be individuals who like your style of selling and often will be responding to the values and ethics you present. We tend to attract like-minded individuals, so when a transition needs to happen in the future, you will need to find someone to take over who sells like you do and values the same things you value.

     The “product” you are offering to clients is the peace of mind your advice and services deliver that is facilitated by insurance products. When designing your “product,” do so carefully to reach a balance that can be maintained when your client base grows. You do not want to put yourself in a position where your growth and success diminish your ability to meet the expectations of your clients. You are the one that will train your clients on what to expect from you and your agency. When the time comes for transition, the individual or company picking up where you left off will need to meet those same expectations. If you have set the bar unrealistically high, it can be expensive for a new owner to assume; thus, it will diminish the amount they will be able to offer you since they will have to factor in that future cost during valuation.

     The presentation, needs analysis, enrollment methods, and recordkeeping you put in place are key to the stability of your client base. A consistent presentation, enrollment, and recordkeeping method allows someone else to step in and copy your processes or additional agents to your agency who will need to mirror your success model and maintain your agency’s brand.

     Reviewing your notes before meeting with a client gives you the information needed for proper analysis and recommendations. That means your initial and ongoing needs-analysis notes need to be readily available. You would not be comfortable with a physician who did not maintain your medical records to refer to, and you would not want a new physician to treat you without seeing your past records, tests, etc. Likewise, you are a professional and should maintain your records in a format that others can access if needed. Therefore, choose a customer relationship management system wisely and carefully maintain it. A client base without a proper recordkeeping system is of little value to someone else because of the difficulty of retaining clients without it.

     Your process and systems are also very important in the Medicare space due to the consistent activities required to meet CMS compliance regulations. Maintaining marketing and lead-source information, permission-to-contact forms, call recordings and enrollment records are required and beneficial for a compliant practice. They are also important to verify the accuracy of carrier commission statements and client data.

     Building a system for success in the Medicare space has its own uniqueness, but all activities still revolve around basic sound business methods. You want to be able to relax knowing that while protecting the future of your clients and their families, you are also protecting yourself and your family.

Dan Mangus Senior Marketing Specialists

Dan Mangus joined Senior Marketing Specialists in 2012 as our National Sales Director, serving over 10,000 agents nationwide. He teaches Medicare courses at universities and keynotes national insurance conferences. He also conducts Medicare certification courses for both the National Guardianship Association and the American Association of Daily Money Managers. Dan has published numerous books and articles for advisors in the Medicare market.

Just wanted to thank you for your piece in the August/September issue! You bring to light some important things to take note of for those of us thoughtfully building a practice. I appreciate your attention to the details around the importance of fact-finding notes pre — and post — meeting with clients; keeping those notes in our heads rarely works in our favor. I have a long range goal of 12 more years in my business (I’m at 8 now), and having turned 60 in the last year, I’m paying closer attention to some of the details around creating a practice that can be picked up and managed.

Suzanne (Mangis) Smaltz

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