Do Medigap Plan Premiums Go Up at a Faster Rate After the Plan Has Been Closed to New Enrollment?

Feb 22, 2016

  1. Spud
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    Is there any documented information about Medigap rates going up at a ‘faster rate’ when the plan(s) have been removed from the market when compared to plans that are still active in the market? For example after Plans H, I, and J were closed to new enrollees, have the remaining plan members experienced, on a consistent basis, larger premium increases than the Plans whose membership rate is growing (F, G, K, and N)? I understand individual companies will vary on this point...the question is has there been a 'macro' study to confirm/deny this?
    The reason for the question is the answer could be pertinent for existing Plan C and Plan F members after 1/1/2020.
     
    Spud, Feb 22, 2016
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  2. yogooglethis
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    Not always I believe it depends on how old the the book of business is and how competitive the rates have been.AARP Plan J in Fl is a perfect example.Some of the sick may get stuck on the plan but then again there book is closed to adverse selection of GI business.Also in most states I believe there is a limited underwriting med supp option that even the sick can qualify for.
     
  3. cadylou
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    Not always. Depends on the company's claims activity and rate action & the original issue basis. I've had some who were still on an old J, and with some companies the rate began to soar at year 4 after it went off market. I have others still on the J to this day & their rate for their age band is still better or as good as an F plan is now.
     
    cadylou, Feb 22, 2016
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  4. somarco
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    somarco That Medicare Expert Guy

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    Mutual of Omaha, United World, United of Omaha ........
     
    somarco, Feb 22, 2016
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  5. FLM2
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    The data indicates that rates have to go up faster on sunsetted plans for one reason: Loss Ratio

    Many companies run Loss Ratios of close to 80% on their current Plan F book of business, it would have to go up when those entering Medicare can no longer enroll in the plan and the current book ages (with an ongoing loss of healthier people who can pass through Underwriting).

    I would find it hard to believe that companies like UHC can maintain anything even close to their current annual increases of 1.5-3% after 2020 with their loss ratio (according to CSG) of about 78.7%.
     
    FLM2, Feb 22, 2016
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