Medicare isn’t Metaphysical. It’s Mega-Fiscal

Medicare strategies must become an integral part of comprehensive retirement planning.

The holy grail of marketing is putting people in the seats – people who want to be there so much so that dinner isn’t even required.

Add to this that there are several national campaigns that last 4-5 months both online and on television that have promotions that attract, not just target seniors; i.e. boomers with bucks. The more affluent the zip codes, the better the prospects.
And the great surprise? The stunner of marketeering! It’s Medicare.

Before you think that Savant has lost it, consider the workshop environment around the turn of the millennia. A few of us seminar buffs discovered the Social Security strategy of “File & Suspend.” At the time, hardly any think tank organization connected to the insurance wholesale distribution channels knew anything about Social Security. But with “File & Suspend,” financial professionals of all stripes had a reason to learn it.

After all, we were offering additional Social Security benefits; real benefits the general public had never even heard of at the time. Of course, Congress got wind of it and in the stealth of night in late November 2015, they killed it – “it” being “File & Suspend.”

There’re still perhaps a million seniors who may be able to use the “Restrictive Application” strategy if they are born before January 1, 1954 and haven’t taken constructive receipt of their Social Security benefits. We still insert strategies to maximize Social Security benefits, but it seems like everyone offering a workshop is doing it.
But most are not presenting Medicare.

Yes, Medicare. It may be the lowest cost and most cost-effective approach to workshop presentations in high-end zip codes in the last couple of decades. This idea is already being touted by major annuity wholesale distributors. When the big annuity players get involved with products like Med Supp, something’s up.

The cross-selling of annuities and even life insurance against the initial sale of Medigap plans is a tactic long-resisted in the security and insurance agent population. But in the right zip codes, that bang for the marketing buck may be the lowest client acquisition cost of any workshop subject presently being used by producers.

Yes, there’s learning curve to understand the basics and some of the nuances of Medicare to be able teach it, but the public wants to know the Medicare rules of the road, the Medigap options and how it integrates into retirement planning. Here’s just one example.

A major economic epiphany about Medicare for me was that it was means-based. There were income thresholds that could result in higher Part B premiums for upper middle class and the affluent. Those income thresholds go back two years. Many of these unsuspecting pre-retirees are unaware of how much more their Medicare premiums could substantially increase.
Most the public is paying $135.50 a month for their Medicare premiums in 2019. But affluent earners could be paying up to $460.50 a month. It’s one thing for a married couple to paying $271 a month. It’s quite another to be paying $921 a month for those married and have real earnings.

To reduce this payment, we began offering Section 162 Double Bonus strategies to lower their adjusted gross income in an attempt to qualify for a lower premium. The introduction of this maneuver resulted in the strategy extending to age 70 to coincide with required minimum distributions and maximization of Social Security.

It’s amazing to comprehend the consternation of the wealthy and how they equate the unfairness of it all since they paid into the system the same as everyone else. The same goes for Part D premiums. Now their medications are priced based on their income. That in itself can definitely raise your blood pressure.

Many throughout the insurance wholesale distribution channels have outsourced morbidity products for years to other independent marketing organizations (IMOs) like stand-alone long-term care policies, disability coverage and group benefits. There are a handful of IMOs that lead with Medicare and sell life insurance and annuities as ancillary product lines. The revenue revelation here is Medicare Part B supplement plans can generate overrides that can fund workshops for their agent population and cross-sell their main product lines of annuities and life insurance. Of course, you could just pocket the rides.

Medicare is now a factor in retirement planning. It always has been, but most us, including me, have treated it as a bastard child of retirement planning and beneath us who are comprehensive planners. But how can you be a comprehensive planner without understanding Medicare and inserting it in your practice?

We’ve learned Social Security benefits. Now it’s time for Medicare education.

Steve SavantSteve is a syndicated financial columnist, talk show host and popular platform speaker. He is also a nationally recognized videographer, content creator and co-contributor to Advisys, InsMark and LifeSpecs. Steve’s videos and content are distributed to over 280 media outlets and 200,000 Twitter users. To contact him visit www.lifesizesolutions.