Interesting article on med sup business

[LostDollar]

from my non-agent perspective, my question would be:What have birthday rules done to plan rates?".

I believe I have seen comments here from agents suggesting that birthday rules will cause rates to rise.

I don't know if anybody has ever come back with any kind of documentation to show that rates in the birthday states have, or haven't, had abnormal rate spikes in the time following implementation of birthday rules.

 

[kstein]

Something that you have to remember is that we are way further in the weeds on this than our clients...and many of them are exhausted from the constant changing and sometimes mistakes happen....for example

Clients forget to cancel existing supplements and double pay for a chunk of time

Clients are leery of how one carrier can offer the same plan for 40% less than another.

Clients hear horror stories of something getting messed up and get gunshy on changing.

I moved a ton of Transamerica supplements (originally written in 2012-2020) this year and guess what- Transamerica didn't release the crossover bc they had the antiquated mbi in their system for crossover purposes so when the new company took over claims were being sent to multiple carriers and it was hell to fix it.

Don/lost how often do you price compare apples at your local grocery store to imperfect produce or Walmart? Or shop your cell phone provider to make sure you are getting the best rate?

Now with all that being said, the anniversary rule is a beautiful tool to have and I wouldn't have it any other way!!

Carriers have to account for a slug of business that comes in without health history so we do see rates about 25% higher in MO than surrounding states. Our t65 plan Gs are in the $175/mo range.

 

[Newby]

from my non-agent perspective, my question would be:What have birthday rules done to plan rates?".

I believe I have seen comments here from agents suggesting that birthday rules will cause rates to rise.

I don't know if anybody has ever come back with any kind of documentation to show that rates in the birthday states have, or haven't, had abnormal rate spikes in the time following implementation of birthday rules.

Any time you take away the ability for insurance companies to screen the health of people they accept you are going to have higher claims payouts. And higher claims payouts gives the companies the ability to be approved for rate increases. There is no way around that.

If the birthday rule only allows people who already have a supplement to change companies then it won't be as drastic. It will cause the lowest priced supplements to go way up though as the unhealthy people move over to the lower rates.

But if it allows people with no Med Sup or people on Med Advantage to pick up a Med Sup AFTER they become unhealthy, then the rates would go WAY up. I don't think that is allowed but I don't have experience with birthday rules so I'm not certain.

Either way, it takes at least a couple of years for rates to adjust to a change like that. They can't raise rates before the increased claims come pouring in.

 

[Millwood]

1.Claim lose ratio is Trump Card(not that one) that ultimately controls all rates. Community, issue age, attained age all trumped. Closed block, open block all trumped. Claim lose ratio is 80% for individual Supps. Companies would rather make 20% of a $400 mo F in closed block than 20% of $100mo plan G in an open block.
2. Companies used to make their real profit on the closed blocks . NOW That's being threatened. If an agent is being paid to move under Birthday Rule they lose their most profitable blocks... Old closed blocks that they don't even pay commissions on anymore(2-3%).
That is the biggest reason they don't want to pay full comp on Birthday Rule or Anniversary states. Hint it's not paying the commission as much as is it losing those hugely profitable old blocks. Don't pay the agent .....no incentive to move it.
3. Dirty little secret that hasn't been litigated yet! Some of the Birthday Rule states specifically call it an Open Enrollent period. Check your contracts they pay full commision on OE. Companies are between a rock and a hard place on this, probably 70% or close to it is OE Turning 65. So according to your contract you should be paid full comp in those states when using the BD rule.

 

[Newby]

1.Claim lose ratio is Trump Card(not that one) that ultimately controls all rates. Community, issue age, attained age all trumped. Closed block, open block all trumped. Claim lose ratio is 80% for individual Supps. Companies would rather make 20% of a $400 mo F in closed block than 20% of $100mo plan G in an open block.
2. Companies used to make their real profit on the closed blocks . NOW That's being threatened. If an agent is being paid to move under Birthday Rule they lose their most profitable blocks... Old closed blocks that they don't even pay commissions on anymore(2-3%).
That is the biggest reason they don't want to pay full comp on Birthday Rule or Anniversary states. Hint it's not paying the commission as much as is it losing those hugely profitable old blocks. Don't pay the agent .....no incentive to move it.
3. Dirty little secret that hasn't been litigated yet! Some of the Birthday Rule states specifically call it an Open Enrollent period. Check your contracts they pay full commision on OE. Companies are between a rock and a hard place on this, probably 70% or close to it is OE Turning 65. So according to your contract you should be paid full comp in those states when using the BD rule.

Excellent info to know. Thanks!

 

[rousemark]

What is the difference between a captive agent and an in-house salaried call center agent?

A captive agent is an agent that is not allowed to place business with any other company or IMO. They may or may not be inhouse

An inhouse agent is also captive but works in a specific location such as in an office where the company furnishes a desk, telephone and other needed tools. As a general rule they do not go out in the field.

 

[selfgen]

I was under the impression that rate increases were plan specific. But recently BCBS of Louisiana raised premiums 10% across the board on all plans. You would think that a Plan N block of business would have a smaller loss ratio than the Plan G. I told my clients that Plan N increases would be less than a Plan G , thereby the rates would stay more affordable longer. What is the rule on this?

 

[rmhaire]

An inhouse agent is also captive but works in a specific location such as in an office where the company furnishes a desk, telephone and other needed tools. As a general rule they do not go out in the field.

You forgot the outhouse agents. They're the ones full of ....

 

[vic120]

Thankfully, BD rules are sparsely represented.

[EXTERNAL LINK] - What States Have the Medigap Birthday Rule?

And NY, CT, OR, VT, WA have year round enrollment.

I don't know about the other But NY pays on med supp
Plus they have Epic through the state extra help when senior make up to 100K for a couple

So I have some that change to med supp med year when they get a diagnosis

It may be more expensive for T65 but they are community rated so the rates don't go up as much per year

There are plus's and negative's
Just like there are plus's and negative's to the system elsewhere