How the Birthday Rule Creates Opportunity for Medicare Supplement Agents

The birthday rule is creating more opportunities for clients to review their Medicare Supplement, also known as Medigap, coverage without medical underwriting. But for agents, the impact goes beyond helping a client switch plans.

As more states adopt the birthday rule and other guaranteed issue opportunities, agents may also see changes in Medicare Supplement rates, carrier participation and commissions.

That makes understanding the birthday rule an important part of protecting your clients and your book of business.

Sean Pekarsky, Vice President and Director of Med Solutions at Senior Market Sales^® (SMS), explains what agents should know about the changing Medicare Supplement birthday rule landscape and how to prepare.

Watch: What Medicare Supplement Agents Need to Know About the Birthday Rule

Why the Birthday Rule Matters to Medicare Supplement Agents

The birthday rule gives eligible clients in certain states an opportunity to change Medicare Supplement plans without answering health questions during a specified window.

For those clients who are facing a significant rate increase or unable to pass medical underwriting, that can create an opportunity to shop for coverage.

But there is no national Medicare birthday rule. States determine their own requirements, including when clients can make a change, which plans they can select and whether they can switch carriers.

Already familiar with the basics? SMS offers additional birthday rule resources to help you dig deeper. Read:

• The Birthday Rule: Is It in Your State and What It Means for Agents and Medicare Supplement Clients
• Medicare Birthday Rule Explained: What Agents Need to Know About Medigap Switching

What agents should be watching now is what happens as more states adopt these rules.

More Birthday Rule Adoption Means Increased Market Change

The birthday rule can be beneficial for clients, but additional guaranteed issue business can also change the Medicare Supplement market.

In the video, Pekarsky shares Medicare market data showing that states adopting the birthday rule between 2022 and 2024 experienced greater Plan G rate increases and a larger reduction in carrier participation compared with the nationwide baseline.

Why does that matter to you?

A client may have more freedom to shop without underwriting, but the plans and premiums available to that client can also change as carriers adjust to additional guaranteed issue business.

That means today's best Medicare Supplement option may not be the best option a year from now.

Don't Overlook the Impact on Commissions

The birthday rule can affect agent compensation, too.

Some carriers may change commissions on birthday rule business as they respond to additional guaranteed issue exposure. State requirements can also affect how carriers compensate agents.

Before recommending a Medicare Supplement change, make sure you understand both the client's options and how the business will be compensated.

SMS has resources to help you identify state-specific birthday rule requirements and carrier-specific commission rules so you know what to expect before submitting business.

Turn Birthdays Into an Annual Client Review Opportunity

For agents, one of the biggest opportunities may be using the birthday rule as another reason to proactively reconnect with Medicare Supplement clients.

Don't wait for a client to call after receiving a rate increase.

When applicable in your client's state, use the birthday rule to review:

• Current Medicare Supplement coverage and premium
• Recent rate changes
• Available plans and carriers
• Potential premium savings
• State-specific switching requirements
• Carrier requirements and commissions

The birthday rule does not mean a client should change plans every year. It gives you an opportunity to review the client's situation and determine whether another eligible option makes sense.

That annual conversation can help you continue providing value while protecting client relationships and your book of business.

Know the Rules in Every State Where You Sell

Birthday rule requirements can vary considerably from one state to another.

As Pekarsky explains in the video, some states allow clients to switch carriers while others may limit the change to the same insurer or an affiliate. Some permit equal or lesser benefits while others require the same plan letter. Enrollment windows can also differ.

If you sell Medicare Supplement plans in multiple states, don't assume the rules are the same.

You don't need to memorize every requirement. You only need to know where to find the right information when a client needs it.

Before recommending a change, confirm:

• When the client's eligibility window begins and ends
• Which plans the client can select
• Whether the client can change carriers
• Applicable state and carrier requirements
• How the business is compensated

Have Questions About the Birthday Rule?

The birthday rule is evolving, and navigating different state and carrier requirements can get complicated.

SMS can help you understand the rules, access state-specific resources and identify Medicare Supplement opportunities for your clients.

Complete the form to connect with a licensed SMS Med Solutions marketing consultant and learn how we can help you navigate these opportunities in states where you do business.

Stay Ahead of the Next Client Opportunity

The birthday rule continues to evolve, making it increasingly important to stay informed about the states where you offer Medicare Supplement plans.

Know which clients may qualify. Understand when their opportunity opens. Review their current coverage and rates. And know where to turn when you need help navigating the details.

With the right information and a proactive client review strategy, the birthday rule can become another opportunity to strengthen client relationships and protect your business.