Closing a book of business

[PrivClientSG]

Inquiring minds want to know? Why do Medicare Supplement companies close a book of business and then come out with a new plan? Can someone explain the logic in it to me?

Accounting, finance, and financial reasons.

 

[LewB]

Please no birthday rule.

Carriers responsible for covering risks should not be required to ignore risks.

Underwriting is not the enemy.

<Points to ACA -- asks the audience: "see that over there?">

Case closed.

If a carrier needs to raise their rates, that is understandable. But to close a book in my mind is a total disregard. for their existing clients.

 

[rousemark]

The local Aetna agent manager actually described the closed BOB as a POSITIVE with a straight face. I felt like laughing in her face.

It is a positive if all the agent cares about is increasing production

 

[somarco]

If a carrier needs to raise their rates, that is understandable. But to close a book in my mind is a total disregard. for their existing clients.

Carriers and companies make business decisions all the time, often without regard to their client/customer base. Just look what Anheuser-Busch just did. It made a good business decision after realizing an earlier decision was incredibly stupid.

Carriers only care about agents when they produce new business that is profitable. Once that changes, both are gone.

I do not endorse closing a block but I understand the motive. Agents that can capitalize on the flaw (or feature) will do so and they will benefit from "relocating" clients to another carrier. Some clients will also benefit from the move, some will not.

By purging a block of "bad" business they are righting the ship for the benefit not only of themselves, but other policyholders as well.

In many cases, the policyholders who are "sacrificed" will find different and possibly better coverage. Not everyone benefits, but many will.

 

[kak6407]

Trial right 1 is getting a mapd at age 65 and having 1 yr to switch to any med sup if your choosing .Trial right 2 is switching from a sup to mapd at any age then wanting to switch back within 1 yr . So if a person works till age 68 and gets their part b when they retire . I know they can't enroll in a mapd and within 12 months use trial right one to go to a sup because there A and B dates different . But let's say they bought a Sup at age 68 with different A and B dates . At age 75 they decide to try a mapd and don't like it . Under trial right 2 don't they have 12 months to return to their orginal sup ?

I don't think so. I always thought this was the case but I think if they delay Part B and have split dates they used up their trial right by staying on the employer plan.

 

[somarco]

I don't think so. I always thought this was the case but I think if they delay Part B and have split dates they used up their trial right by staying on the employer plan.

Click this link and scroll down to point out the Trial Right that is "used up" when you stay on the EGH.
https://www.medicare.gov/health-drug-plans/medigap/ready-to-buy


In most cases, you have a guaranteed issue right when your other health coverage changes in some way, like if you lose your other coverage. You may also have a "trial right" to try a Medicare Advantage Plan (Part C) and still buy a Medigap
Medicare Supplement Insurance sold by private insurance companies to fill "gaps" in Original Medicare coverage.

' class='ds-c-tooltip__trigger-link ds-u-display--inline'> Medigap policy if you change your mind.

If you have a guaranteed issue right, an insurance company:

• Must sell you a Medigap policy
• Must cover all your pre-existing health conditions
• Can't charge you more for a Medigap policy because of past or present health problems

Answer a few questions to find out if you can buy a Medigap policy, or review all the Medigap guaranteed issue right situations below.

Guaranteed issue right situations
The chart describes the most common situations under federal law where you may be able to buy a Medigap policy, the kind of policy you can buy, and when you can or must apply for it. You may have additional rights under state law.


You have a guaranteed issue right if... You have the right to buy... You can/must apply for a Medigap policy...
You have a Medicare Advantage Plan, and your plan is leaving Medicare or stops giving care in your area, or you move out of the plan's Service area
An area you must live in for the plan to accept you as a member. For plans that limit which doctors and hospitals you may use, it's also generally the area where you can get routine (non-emergency) services. Plans can, and in some cases must, &nbsp;disenroll you if you move outside their service area.&nbsp;

' class='ds-c-tooltip__trigger-link ds-u-display--inline'> service area .
Medigap Plan A, B, C*, D*, F*, G*, K, or L that's sold by an insurance company in your state.

You only have this right if you switch to Original Medicare (rather than joining another Medicare Advantage Plan).

• 60 days before the date your Medicare Advantage Plan coverage ends.
• No more than 63 days after your Medicare Advantage Plan coverage ends.

Note: Medigap coverage can't start until your Medicare Advantage Plan coverage ends.

You have Original Medicare and an employer group health plan (including retiree or COBRA coverage) or union coverage that pays after Medicare pays and that plan is ending.


Note: In this situation, you may have additional rights under state law.

Medigap Plan A, B, C*, D*, F*, G*, K, or L that's sold by an insurance company in your state.


If you have COBRA coverage, you can either buy a Medigap policy right away or wait until your COBRA coverage ends.

No more than 63 days after the latest of these 3 dates:

1. Date your current coverage ends.
2. Date on the notice you get telling you that your coverage is ending (if you get one).
3. Date on a claim denial, if this is the only way you know that your coverage ended.

You have Original Medicare and a Medicare SELECT policy. You
move out of the Medicare SELECT policy's service area.
Contact the Medicare SELECT insurance company for more information about your options. Medigap Plan A, B, C*, D*, F*, G*, K, or L that's sold by an insurance company in your state, or the state you're moving to.

• 60 days before your Medicare SELECT coverage ends.
• No more than 63 days after your Medicare SELECT coverage ends.

(Trial right) You joined a Medicare Advantage Plan or Program of All inclusive Care for the Elderly (PACE) when you were first eligible for Medicare, and within the first year of joining, you decide you want to switch to Original Medicare.

Any Medigap policy that's sold by an insurance company in your state.*

• 60 days before your coverage ends.
• No more than 63 days after your coverage ends.

Note: Your rights may last for an extra 12 months under certain circumstances. Contact your State Insurance Department for more information.
(Trial right) You dropped a Medigap policy to join a Medicare Advantage Plan (or to switch to a Medicare SELECT policy) for the first time, you've been in the plan less than a year, and you want to switch back.
The Medigap policy you had before you joined the Medicare Advantage Plan or Medicare SELECT policy, if the same insurance company you had before still sells it.

If that policy isn't available, you can buy Medigap Plan A, B, C*, D*, F*, G*, K, or L that's sold by an insurance company in your state.

• 60 days before the date your coverage ends.
• No more than 63 days after your coverage ends.

Note: Your rights may last for an extra 12 months under certain circumstances. Contact your State Insurance Department for more information.
Your Medigap insurance company goes bankrupt and you lose your coverage, or your Medigap policy coverage otherwise ends through no fault of your own. Medigap Plan A, B, C*, D*, F*, G*, K, or L that's sold by an insurance company in your state. No more than 63 days afteryour current Medigap coverage ends.
You leave a Medicare Advantage Plan or drop a Medigap policy because the company hasn't followed the rules, or it misled you. Medigap Plan A, B, C*, D*, F*, G*, K, or L that's sold by an insurance company in your state. No more than 63 days after your coverage ends.
*Note: Plans C and F are no longer available to people new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020, but haven't yet enrolled, you may be able to buy Plan C or Plan F. People new to Medicare on or after January 1, 2020, have the right to buy Plans D and G instead of Plans C and F.

" data-title="What are guaranteed issue rights?" style="box-sizing: inherit; display: inline !important;">

 

[rousemark]

Please no birthday rule.

Carriers responsible for covering risks should not be required to ignore risks.

Underwriting is not the enemy.

<Points to ACA -- asks the audience: "see that over there?">

Case closed.

Birthday rule seems to be working OK in the states that have it.

 

[somarco]

Birthday rule seems to be working OK in the states that have it.

Define working . . .

Based on what I have seen, those states have higher overall premiums and lower commissions.

 

[kgmom219]

Please no birthday rule.

Carriers responsible for covering risks should not be required to ignore risks.

Underwriting is not the enemy.

<Points to ACA -- asks the audience: "see that over there?">

Case closed.

That an AARP trading their support for the ratio rule and screwing everyone under age 50.
And Risk Adjustment.
And the carriers getting hosed on the transplants they had to pay for in January 2014.

You really want to go there?

 

[sshafran]

MAPD doesn't have to worry about rate increases and adverse selection as long as they can . . .

Require prior authorization
Use algorithms to postpone/deny claims
Manipulate networks
Increase copays

Eliminating underwriting leads to unaffordable premiums (ACA, Medigap) and reduced access to care (MAPD)

There is no such thing as a free lunch

I think their strategy is to just outsmart uncle sam.

Every time I do an HRA I think the carrier is hoping for more poor health indicators... More $$$.