Birthday Rule spreading? How much will this affect my business?

Dutch

Expert
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I heard that my state will be starting the birthday rule starting in 2026. If this is true and I am 80% Supp business, how much will this actually affect my business? For those in this situation in the past, what played out?

I'm trying not to get too discouraged, but I'm afraid of premiums exploding and lots of changing/cutting of commissions.
 
Premiums are going to go up across the board on all new and open blocks of business over the next 2-3 years. Just a guess but probably 20%-40%.
No company wants the Birthday Rule business so 99% of the companies won't pay commision.
Being an expert at niche underwriting will become a necessity. I tell existing clients I don't work for free. I will not change you every year to save $15-30 month with no compensation. If you got trapped on an old AetVS plan F paying $800 month I'll help you.........once.
Just out of curiosity what State are you in?
 
Premiums are going to go up across the board on all new and open blocks of business over the next 2-3 years. Just a guess but probably 20%-40%.
No company wants the Birthday Rule business so 99% of the companies won't pay commision.
Being an expert at niche underwriting will become a necessity. I tell existing clients I don't work for free. I will not change you every year to save $15-30 month with no compensation. If you got trapped on an old AetVS plan F paying $800 month I'll help you.........once.
Just out of curiosity what State are you in?
Nebraska. Could be hearsay, but the person telling me is the head of an FMO and heard it from someone he talked to the other day.
 
NV added the birthday (or anniversary) rule a few years ago. Premiums increased, can't say how much, and commissions dropped. I think they later decided to increase commissions but the only winners seem to be folks stuck in a block that is in a death spiral. Everyone else is screwed.
 
I heard that my state will be starting the birthday rule starting in 2026. If this is true and I am 80% Supp business, how much will this actually affect my business? For those in this situation in the past, what played out?

I'm trying not to get too discouraged, but I'm afraid of premiums exploding and lots of changing/cutting of commissions.
You have to proactively change them 3-months ahead of their birthday month.
 
I heard that my state will be starting the birthday rule starting in 2026. If this is true and I am 80% Supp business, how much will this actually affect my business? For those in this situation in the past, what played out?

I'm trying not to get too discouraged, but I'm afraid of premiums exploding and lots of changing/cutting of commissions.
Just sell them a HI plan and stuff it with ER, Doctor, Ambulance; Skilled nursing and Cancer and Critcal care. You'll be fine.
 
I feel like most people on Supp don't look at the premium all that often. Hopefully if would you look at 3 years timeframe, only a smaller percentage would be interested in using the birthday rule.
 
most people on Supp don't look at the premium all that often.

They do at renewal . . .

Sometimes with the renewal notice . . . others not until they look at their bank statement and see the premium increase (that came in the renewal notice 60 days earlier). But they DO look and will ask you to shop their plan.

GA is an entry age state. Once the policy is 3+ years old the savings is nominal unless you are looking at the new kids on the block out buying business.

Of course if they bought from one of the NKOTB 3 years ago that carrier probably left the market and the block has started going south.

Attained age states probably have a different scenario . . .

Birthday rule is an oddity to me. @Newby advised to move 90 days before their birthday. Perhaps there are two sets of rates? One for underwritten, one for birthday rule? And maybe two different commission levels as well?

Again, this is not in my universe so I don't know. Perhaps Newby will respond to this post and enlighten us.
 
Just sell them a HI plan and stuff it with ER, Doctor, Ambulance; Skilled nursing and Cancer and Critcal care. You'll be fine.

Seems like a dangerous way to go to me. The agent will be fine with all those commission bux . . . not so much for the client with a portfolio of policies to keep up with and file claims.

Most of my clients are smart, lucid and are in relatively good shape financially. They like things simple. No networks, referrals, prior authorization, etc.

YMMV
 
Here in California, we have had the Birthday Rule since before the past 5 years when I entered this business. For the most part, at least in Southern California, the rates have remained quite competitive. In addition, even though there might be a decent savings opportunity, I find most of my clients don't want to switch. Most of the carriers pay full commissions on the Birthday Rule but over the past couple years, Anthem cut their commissions because Blue Shield ( which operates separately in CA) was promoting Underwriting Holidays. Agents would sign their sickly clients to Blue Shield on the Underwriting Holiday, then switch them to lower premium Anthem on their birthday.

I believe the greater concern in this business is the diminishing or disappearing commissions on Med Supps after 5 or 6 years.
 
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