Have you asked your Medicare plan clients about STC?

Contributor: Barbara Stahlecker

Since October, thousands of Americans around the country have signed up for Medicare Advantage Plans during the annual election period (AEP), and we still have a few weeks to go.

If you’re one of the agents working furiously to get to everyone before December 7th, then you can appreciate just how busy this time of year can be.

This is also the perfect time to be talking to your clients about short-term care (STC).

Since it’s a health product it can be included in your scope of appointment, and it’s something that all of your clients can use. If you’re not talking about STC, you’re not only leaving money on the table, but you are leaving your clients exposed to a risk they don’t need to take.

Have you ever heard a client say, “The hospital kept me too long”?

In the world of DRG’s it’s unlikely that your clients were 100% recuperated by the time they left the hospital.

That hip replacement? Eight weeks to recover.

Knee replacement? Six weeks.

If your clients live alone, there is a high probability that they will be discharged to nursing homes to complete their recovery.

At the very least, they are going to require some help at home.

Even if there are two people in the home, how many 65-year-old women can lift their 65-year-old husbands?

Unfortunately, many people forgo the care they need simply because they can’t afford it, and a family member is forced to step in to provide as much help as possible.

There are 44.4 million informal (or family) caregivers in America today – 21% of our population. Most of those caregivers are wives and daughters who are trying to simultaneously raise children and work full time while providing care for an aging parent.

The value of this care is estimated to be $257 billion annually!

This tells us that there is a great need for STC insurance. Unfortunately, most consumers aren’t even aware this type of insurance exists.

You clients rely on you to keep them informed of products that will help them. They’ve trusted you to cover their hospital and doctor bills with an MA or MedSupp – but who is going to pay the bill when your client just needs help recuperating?

Medicare will pay for up to 100 days in a Medicare-approved facility but there are some hoops to jump through first.

Most Medicare Advantage plans will help with the costs, but the client still has to pay a portion of the bill, and this can range anywhere from $50 per day to $200 per day – depending on the company and where the client lives. If the client wants to recuperate at home, Medicare won’t pay anything. All of this usually comes as a huge shock to the client who thinks they were 100% covered when they bought their MA or MedSupp coverage.

Short-term-care coverage is not meant to take the place of a traditional long-term care insurance (LTCI) policy. It is meant to plug the gaps that exist in a Medicare Supplement, Medicare Advantage or LTCI policy.

Coverage can range anywhere from 30 days all the way up to 360 days. Underwriting is simplified, no special LTC training is required and policies are usually issued in less than 2 weeks.

More importantly, this is coverage your clients don’t currently have. For instance, a 90-day policy might not sound like much, but to a person who only has $30,000 to $40,000 in life savings, paying $15,000 to $18,000 out of their own pocket would be a huge loss.

Even when consumers own traditional LTC policies, they probably don’t realize that someone is going to have to certify that they’ll need care for at least 90 days before that policy will pay a dime.

That’s because – as the name implies – long-term care insurance is designed to pay for the long-term claim.

So you can see, there really isn’t anything that will help your clients pay for their short-term care needs. That’s where you come in.

If you are selling Medicare Advantage plans, short-term care should be part of every discussion you have.

The most successful agents package STC right along with a hospital indemnity plan and a dental/vision/hearing plan.

When you do this, you have not only saved your client money on their monthly insurance premiums, but you have given them more complete protection than they had before – all for a fraction of the cost.

You have turned that person from a just a “sale” into a “client” who will remember that you went the extra mile for them.

In this day and age where so much of the insurance market is simply price-driven – the more products you have in the house, the less likely it is that another agent can come along behind you and take your clients.

The downside to short-term care is that it is not available in every state. States like California, Connecticut, New York and Texas are unlikely to ever approve a short term care plan for their residents.

Some states have approved the product as non-tax-qualified LTC coverage. In those states, a carrier can offer only the 360-day plan. But in most of the country these policies are available right now. Talk to your managing general agent to see which carriers you can offer.

Even after the AEP, you can still go back to all of your clients and show them how a short-term care policy can work with their current coverage.

For as little as $15 per month, you can bring meaningful coverage to your clients and give them the ability to get the care they need, when they need it, without spending their life savings.

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