Medigaps Going Up. What Happens to MA Premium?

[brooks]

Recently several Medicare supplement carriers have announced price increases. Generally, around 10%. It seems everyone expected this increase.

That being the case, why is there no effect on Medicare advantage plans? There are still carriers offering zero premium plans and throwing in the drug plan along with health club memberships and other stuff.

How can all advantage plans afford this? I don't get the math. If premiums for Medicare supplement are increasing due to loss experience how do the Medicare Advantage plans escape this?

 

[lucasr]

They decrease benefits rather then increase premiums. Copays go up, out of pocket max goes up, deductibles, etc.

 

[azmedsupagent]

Recently several Medicare supplement carriers have announced price increases. Generally, around 10%. It seems everyone expected this increase.

That being the case, why is there no effect on Medicare advantage plans? There are still carriers offering zero premium plans and throwing in the drug plan along with health club memberships and other stuff.

How can all advantage plans afford this? I don't get the math. If premiums for Medicare supplement are increasing due to loss experience how do the Medicare Advantage plans escape this?

If you see a plan one with 0 premiums a gym membership and a free blender for one year its becuase that particular plan won a high bid. All these advantage plan companies are bidding on the subbsidies they will recieve from social security and medicare so some years some companies get better bids than other companies. Generally though if one year they get a lower bid instead of raising premiums they just raise cost sharing copays and deductibles. Also, advantage plans use cost containmet mechanisms like HMOs that give it the authority to deny claims on what ever grounds its chooses there by potentially eliminating some of the exposure to rising medical costs and in some cases smaller subsidies like we will see in 2012.

The increases for new business (trend increase) on medsupps is often because of the inflation of the dollar and the increased deductibles in medicare a and b. For example, the medicare part a deductible jumped from 1024 in 2010 to 1132 in 2011 which is just over a 10 percent increase in the size of that gap. The part b deductible went from 150 to 162 in 2011 which is just under a ten percent increase. The increases for inforce business are often driven by actuarial risk adjustments based on the previous years claims losses VS the size of the risk pool. The inforce business increases can also rise for an age increase or because of a disappearing discount. Often a med supp company will have 2 increases, a trend increase for new business and an actuarial increase for existing policies.

I hope this answers your question.

 

[aheff]

MA plans are heavily subsidized by our tax dollars. This could drastically change for 01/2012, so much so that MA plans could be history in a few years, due to Obamacrap.

 

[Fisher]

2010 Part A deductible was $1024?

 

[Frank Stastny]

2010 Part A deductible was $1024?

I think he was off by a few dollars on the Part B Deductible also.

 

[Fisher]

I think he was off by a few dollars on the Part B Deductible also.

Had to massage the numbers a bit to justify the +/- 10% increases as shown.

 

[azmedsupagent]

Had to massage the numbers a bit to justify the +/- 10% increases as shown.

@ Frank and Fisher. Id love to hear your opinion on the matter. Any better ideas?

 

[Fisher]

@ Frank and Fisher. Id love to hear your opinion on the matter. Any better ideas?

My opinion? Throw out factual numbers when you're wanting to be taken seriously.

That's my opinion.

 

[azmedsupagent]

My opinion? Throw out factual numbers when you're wanting to be taken seriously.

That's my opinion.

Fisher no need to get hostile. You had that little adrenaline tingle in your chest when you wrote that didnt you. This is an forum to exchange thoughts, ideas and opinions. I had my deductibles mixed up from 08-09-10, I stand corrected, no big deal. If all you have to share is negativity then im done with this conversation.

Now back to the point at hand. I dont think there are many people that would argue the fact that increasing medicare deductibles have a direct effect on the average cost of a medicare supplement. Do you disagree? I also doubt that anyone would disagree that a trend increase for new business is based on different factors than an inforce business rate increase.