Medicare Supplements and the Impact on Your Business

1. Medicare Supplements and the Impact on Your Business A Synopsis of how AHU can Help Your Organization Become Successful in the Thriving Senior Market

2. The AHU Difference American Health Underwriters offers a combination of value-added benefits you can’t get anywhere else. • 40+ years of experience with multiple lines of insurance • Highly-trained, dedicated marketing representatives assigned to you • Top level contracts with the industry’s leading carriers • 12 month advancing available • Access to sales technology that will increase your efficiency and profitability • Access to proven resources, including pre-sale and point-of-sale scripts • Lead partnerships that deliver the highest quality leads at affordable prices • Web, graphic design, video, and copywriting consultation • Weekly blog and product updates to keep you current on industry trends and changes • Trip Incentives

3. Market Opportunity The Baby Boomer Effect The “aging in” of Baby Boomers into Medicare will create the largest expansion of the program in its history. The Medicare market is guaranteed to expand for at least the next two decades. Look at these amazing statistics: • 78 million Boomers were born between 1946 and 1964 • 4 million Boomers will turn 65 every year for the next 18 years • Boomer spending power is between $2.4 and $3 trillion dollars • Over the next ten years, Boomers will account for two out of every three dollars spent on health care Imagine the possibilities…

4. Medicare Fundamentals Medicare Benefits Medicare is health insurance for people age 65 or older, under 65 with certain disabilities, and any age with End-Stage Renal Disease (ESRD). ESRD is permanent kidney failure requiring dialysis or a kidney transplant. The different parts of Medicare help cover specific services if you meet certain conditions. Medicare and You Handbook http://www.medicare.gov/Publications/Pubs/pdf/10050.pdf

5. Links to Medicare Information • Medicare Basics • Medicare Benefits • Part A • Part B • Part C • Part D • Coverage Choices • Other Insurances • Eligibility & Enrollment

6. Medicare Supplement Plans Original Medicare 80% A Medicare supplement (also called “Medigap”) policy is health insurancesold by private insurance companies thatfill "gaps" in Original Medicare coverage. In general, with a Medigap policy: • You get help paying for some of the health care costs that Original Medicare doesn’t cover. • You also get benefits not covered by Original Medicare, like emergency health care outside the United States. • You pay a monthly premium to the private health insurance company that sells you the policy. Medicare and the Medigap policy both pay their shares of covered health care costs. Medicare Supplement 20% Original Medicare w/ Medicare Supplement 100% Coverage

7. 2010 Revisions to Medigap Plans Background The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) included language to encourage the National Association of Insurance Commissioners (NAIC) to modernize the Medigap market. The NAIC decided to review the Medigap plans to determine if there were changes that could be made to the benefit packages in response to changes in the marketplace since standardization (1990). Changes were approved and will take effect on June 1, 2010. The new plans are known as “modernized” plans.

8. 2010 Revisions to Medigap Plans Changes to Benefits: • At-Home Recovery Benefit eliminated • Preventive Care Benefit eliminated • 100% Part B Excess Charges Benefit replaces the 80% benefit for Plan G • New Hospice Benefit as part of Basic Core New Hospice Benefit: Medicare offers a hospice benefit with a drug co-pay and inpatient respite care coinsurance. The 2010 modernized plans will now cover the expenses below as a core benefit: • $5 co-pay for outpatient prescription drugs for pain and symptom management • 5% of the Medicare-approved amount for inpatient respite care (short-term care given by another caregiver so the usual caregiver can rest). Does not include room and board New Plan Options: • Plan M – offers increased cost-sharing (50% of the Part A Deductible, no coverage for Part B Deductible • Plan N – offers new co-pay structure ($20 co-pay for physician visits, $50 co-pay for ER) and no coverage for Part B Deductible Summary: • Overall = Reduces number of plans from 14 to 11. • Plans E, H, I, and J are no longer offered due to duplicity as a result of benefit changes • Eliminates outdated and underutilized benefits • Adds new plans that feature higher cost sharing and lower anticipated premiums for policyholders.

9. Modernized Plan Options

10. Plan N: The Next Big Thing Mutual of Omaha Companies - Plan N Highlights 2010 changes include the new plan N with lower premiums and more cost-sharing: • Plan N covers 100% of the Part A deductible with a unique (to Med Supp) co-pay structure • – $20 on office visits, $50 on ER visits – to cover a portion of Part B charges Sales Appeal of Plan N: • Lower premiums give options to price-shoppers and expands the market to lower incomes • Plan N premiums priced at about 75% of F, respectively, in most states • Plan N’s co-pay structure may resonate with Medicare Advantage (MA) clients • Plan N premiums may now be comparable to MA plans, without the network restrictions and additional cost-sharing at the point of service of those MA plans • Plan N will be offered as a Guarantee Issued plan in most states • Compensation increases put the $ compensation on par with plans F and G

11. Open Enrollment / Guarantee Issue Open Enrollment (turning 65) – 6 months before, the month of, and 6 months after the clients part B effective date. There is no underwriting at this time. Medicare Advantage Disenrollment – Clients can switch to a Medicare Supplement with no underwriting within the first 12 months of applying for a Medicare Advantage plan for the first time. Guarantee Issue Periods – Clients can apply for a Medicare Supplement with no underwriting in the following circumstances: • Client’s current plan pulls out of service area • Client is being disenrolled from a group plan • Client is disenrolling from a Medicare Advantage plan within the first 12 months • Client was mislead or misinformed about their current coverage * Please refer to the “Choosing a Medigap Policy” for more details

12. Product Portfolio American Health Underwriters is an exclusive distributor of many leading products in the industry. Because of our outstanding relationships with the major carriers, we are able to offer incentives to our agents not available through most brokers. Incentives include: • Highly rated carriers with competitive product positioning • Top level contracts with immediate vesting • 12 month advancing (most carriers) • Trip incentives (with some carriers) • Co-op leads and direct mail

13. Lead Generation Why pay full price when you can leverage the AHU community to get the highest return on your investment? We offer discounted leads through many of the most competitive and reputable companies in the industry. Types of lead generation available: • Co-op Leads • Direct Mail Designed for agents selling in-person, targeting specific counties and zip codes • Prospecting lists Designed for agents to prospect for a specific demographic. These can be used for appointment setting and phone sales.

14. Sales Processes: e-Apps Phone and Internet Sales Despite the Great Recession the senior market is exploding – adding 10,000 individuals a day. With electronic applications (e-apps), you can leverage the power of technology to sell Medicare Supplement insurance throughout the country from virtually anywhere. What this means for your Med Supp Business: • Speeds up Medicare Supplement enrollment • Expands your ability to reach more clients without leaving the office • Spend time finding new clients rather than chasing missing requirements • Get paid faster Mutual of Omaha e-app training video: Click Here to watch a detailed video of the e-app process

15. Sales Processes: In-Person Face-to-Face Sales There is great value in building close personal relationships with our agents. So we understand in-person business is still be a major part of your strategy. We will provide you with an array of resources to help your agents qualify the best appointments and have the skills necessary to close more sales. What this means for your Med Supp Business: • Creates a loyal client base and grows your business through referrals • Medicare Supplements helps open doors to cross sell additional products • Creates better persistency through in-person sales skills

16. Sales Processes: Scripts Qualifying prospects and closing sales is vital to success in our industry. We have developed proprietary sales scripts designed to outline the most effective sales process. From setting the appointment to closing the sale, we’ve got you covered. Types of sales scripts available to you: • The initial call – Setting the appointment • The appointment – Recommending a plan • The appointment – Closing the sale • Referral generation • Thank you letter • Annual follow up letter *Personalized scripts available upon request.

17. Keys to Success By partnering with AHU, you will gain a partner in your growth, dedicated to working closely with you to develop an effective approach to the senior market. We will help you develop the following areas of your senior business: • Product Portfolio – Represent the most affordable and recognized carriers • Product Training – Be confident in your sales abilities and market knowledge • Lead Generation – Effectively target the right audience • Sales Processes – Develop the most efficient model to deliver your product • Sales Scripts – Perfect the appointment setting and point-of-sale processes • Data Management – Learn how to manage your existing clients and new prospects We invite you to leverage our passion for customer service. Our mission is to achieve customer satisfaction with every partner we work with. The tailored approach to the exploding senior market we offer is but one of the many ways we hope to meet or exceed your expectations.

18. Get Contracted Today Mutual of Omaha Are you ready to take advantage of this tremendous opportunity? If so, please download the contracting paperwork from the links below and get started today! We look forward to earning your business. Gerber Life Sentinel Life CLICK HERE to download contract CLICK HERE to download contract CLICK HERE to download contract

19. Summary • With more than 10,000 Americans turning 65 everyday, the market will • continue to experience rapid change and growth, thus it is imperative, now • more than ever, for an independent insurance agent to have a valuable and • influential support base in order to succeed. At AHU, we want to be that • support base, and encourage you to come join us to see how our team of • expert professionals can help you grow your business. Resources: • Centers for Medicare & Medicaid Services • Medicare.gov • NAMSA • American Health Underwriters, Inc. • Toll Free: 800-772-2355 • Local: 817-877-5861 • 830 Taylor St • Fort Worth, TX 76102 • Website: www.ahuinc.com