How to Choose an MCA Carrier

agent working with elderly couple and showing paperwork
Amy Beacham, MBA
Amy Beacham, MBA March 25, 2020

As Marketing Director, Amy is responsible for all company communications and ensuring our clients have the most accurate and up-to-date information. In addition to her communication expertise, she has prior experience as a paralegal and a Krause Benefits Planner.

Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.

As an insurance agent, you understand the importance of choosing an insurance carrier you can trust. You also know how crucial it is to find the company that provides the most beneficial outcome for both you and your client, especially when dealing with a specialized product like a Medicaid Compliant Annuity (MCA). Since MCAs are unlike any other insurance product, it can be difficult to understand which factors set one MCA carrier apart from another. Therefore, we want to provide some clarity on the considerations involved in choosing an MCA carrier. Then, you can guide your clients with confidence.

Carrier Options with The Krause Agency

Although MCAs are a specialized product, we offer several insurance carriers for you to consider. Our office works with seven carriers across the country. Four of our carriers have an A.M. Best rating of A- or higher, and we have exclusive relationships with three carriers, whose products cannot be found anywhere else. We are proud to have the most diverse MCA product offering on the market.

In some cases, the carriers you can and cannot work with may be dictated by certain aspects of your client’s case, such as their state, desired annuity term, and premium amount. So, carrier options may vary on a case-by-case basis. Our Benefits Planners can walk you through the specific options available to your client before you decide which carrier offers the best benefit.

Important Considerations

Financial Strength Ratings

One way to gauge an insurance carrier is by their Financial Strength Rating (FSR). As an agent, you understand that FSRs evaluate a number of elements in addition to a company’s creditworthiness. For instance, A.M. Best rates carriers based on their business profile, balance sheet strength, operations, risk management, the types of coverage sold, and the number of policies written. Therefore, larger companies with more diverse product lines naturally earn a higher rating.

Does that mean you should overlook smaller companies that offer Medicaid Compliant Annuities? Absolutely not. In fact, many smaller carriers can provide more desirable product features and better service than larger carriers, leading to a more favorable outcome for your client. It’s important to consider all factors of your client’s case before ruling out a potential carrier based on their ratings alone.

Agent Commissions

While it’s crucial to consider factors relating to your client’s case, you also need to take your business into account. Fortunately, our carriers offer competitive commissions for long-term MCAs, allowing you to boost your revenue while helping your clients preserve their hard-earned assets. Plus, we work with a carrier that doesn’t institute a chargeback on commissions in the event of a client passing within the first year after the initial annuity purchase.

Contract Dates

Timing is vital when dealing with MCAs. Since the annuity purchase is typically the last step in the Medicaid spend-down process, the effective date of the contract is important for your client’s eligibility. If the effective date falls into the following month, it will cost your client an additional month of paying out of pocket for care. If you have a case that’s on a tight deadline, consider a carrier that offers flexibility when assigning the contract date. Fortunately, one of our exclusive carriers offers the option to backdate their MCAs without restriction.

Beneficiary Options

Although the state Medicaid agency is typically named primary beneficiary, exceptions exist for certain MCA cases. Other beneficiaries may include family members or a trust. In these cases, it’s important for you and your clients to understand the beneficiary payout options for each carrier. This may include continuing to collect MCA payments for the remaining term or receiving a lump sum of a discounted amount. That said, we work with an exclusive carrier that offers an alternative option in many cases, wherein the beneficiary(ies) can opt for the lump-sum distribution without a discount.

Product Focus

Industry experience and product focus are key when selecting a carrier for specialized insurance products. Since many larger, nationally recognized companies that offer MCAs also have a substantial product line, they may not be experts when it comes to Medicaid planning. Our exclusive carriers, on the other hand, tend to be smaller companies that specialize solely in products related to elder care. When opting for these smaller carriers, clients are getting an extra layer of expertise assisting them through the MCA process. In fact, one of our exclusive carriers has been focusing almost entirely on annuities for Medicaid planning for over 20 years.

In addition to the items laid out here, other crucial aspects to consider when choosing an MCA carrier may include processing fees, processing time, flexibility with the freelook period, the interest rate of the annuity, and the ability to send premium funds electronically.

What Does This Mean for You and Your Clients?

At The Krause Agency, Medicaid Compliant Annuities are the heart of our business. Our priority is not just to help your clients qualify for Medicaid benefits—it is also to achieve the best possible result for you and your client given the circumstances of the case. Creating an MCA strategy is not a one-size-fits-all plan, and neither is choosing an MCA carrier. That’s why we strive to continuously provide the best recommendation based on our vast experience. You can leverage our diverse, exclusive carrier options to create the best result for each client.

If you’re not sure where to begin, don’t worry. Our Benefits Planners can walk you through the options and customize a solution for every case you bring to us.

Download our detailed guide for a comprehensive look at how selecting an insurance carrier can impact your business and affect your client’s plan for Medicaid eligibility.

For more information on the carrier options we offer, contact us today.