Mutual of Omaha Rate Increase Hits 10%

[thomasm]

I saved a 71 year old non-smoker over $1600.00 a year to move from a Mutual of Omaha Plan F to an Aetna Plan G in New Mexico. If what that MofO does is 'just business' then I'm the one crusader to move their business elsewhere.

To be fair, I saved a couple over $1800 a yr. by switching them from BCBS to MoO. But I've also replaced a fair amount of their old legacy plans.

If you ever visit Omaha, you'll get to see where all that extra revenue from rate increases went!

365 Million went to this:

5 years later, what Midtown Crossing has meant for area development - Omaha.com: Money

Who knows how much went to this:

Mutual of Omaha unveils giant swimmer banner in anticipation of Olympic Swim Trials - Omaha.com: Money

 

[AllyriaRedbird]

Wow, it's no wonder we all know who they are. But only the insiders know what they do.

 

[sman]

I just want to thank you all for discussing this, in this thread and elsewhere in the forum.

I did my own research on the Mutual of Omaha site regarding rate increases, and have read many posts about this business practice, and I'm so glad I know the real story about Mutual of Omaha companies and the shell game they play.

In fact, I have reams of data to back up the opinions of SoMarco and Sman going back to 2010. Every senior I meet gets the shell game talk, and I know they appreciate it. Even if rates are similar now, I focus on the long term.

I saved a 71 year old non-smoker over $1600.00 a year to move from a Mutual of Omaha Plan F to an Aetna Plan G in New Mexico. If what that MofO does is 'just business' then I'm the one crusader to move their business elsewhere.

**Seniors all cheer in the background**and wave their canes**

Unfortunately you may run into the same issue with Aetna. They are now on their third carrier here in Georgia (Aetna, Continental Life and Aetna Life and Health). I can't say with any certainty that they are playing the shell game, but it wouldn't surprise me if they did considering multiple carrier names under the same umbrella.

 

[somarco]

They still offer (big) Aetna here. Rates maybe 30% above AHL.

 

[sman]

They still offer (big) Aetna here. Rates maybe 30% above AHL.

Right. But what's the point? Can't imagine anyone is selling it. At least nobody who is experienced in the Med Supp market.

 

[medsuptage]

I look forward to your math .....

Now the clients will get an increase every year as they get older.

The interesting thing is how rate stable the closed blocks of business are.

Most agents assume the older blocks will death spiral but that usually only happens with very small blocks of business.

I find it a stretch you work in the supplement market or have any idea how it works. Your firm defense of Omaha is a solid indicator you're either an Omaha rep, Omaha agent, or just someone new who is ignorant to the market.

I have a love hate relationship with Omaha. One one hand they have a business model of screwing over seniors. On the other hand I have made more money replacing their business than every other company combined. I write in about 15 states, and I can think of only 1 where Mutual of Omaha doesn't intentionally flip their books

Unfortunately you may run into the same issue with Aetna. They are now on their third carrier here in Georgia (Aetna, Continental Life and Aetna Life and Health). I can't say with any certainty that they are playing the shell game, but it wouldn't surprise me if they did considering multiple carrier names under the same umbrella.

You know, I was kinda worried about this when it first happened in, but here's a little extra info. Aetna/ACI/ CLI w.e you wanna call them is my biggest carrier, I have clients with them in in many states. They haven't rolled any of their recent books, that I know of, except for GA. They have replaced some of their really old books that are like 7-10 years old. Since I started writing them 5 years ago, there's only been two rolls in any of my states and that's in GA and PA ( it was only PA's second book not third like GA). They are still very competitive in all the other states I write in with no rolls.

I kinda think it might be a GA thing. GA is pretty unique, I think its a combination of being an issue age state and claims. Even New Era/ Philly's has higher increases there than most of my other states.

Probably still too early to tell but I'm leaning towards and hoping they won't be flipping their books.

 

[somarco]

Scott, I have no fault with your argument. Had a client last year that insisted on Aetna and a monthly bill. She called big Aetna instead of AHL and they told her they would do it. When I called AHL they said I would have to write it through big Aetna and get contracted with them.

Lady didn't want to pay the higher premium, so she agreed to a bank draft with small Aethan

 

[Brian F 11]

Love it when a new customer calls looking to save on their Med Supp, almost always MOO, easy pickins'.

Sent from my iPhone using InsForums

 

[somarco]

Aetna has 4 carriers, including "big" Aetna they can use. As indicated above they currently offer AHL and Aetna in GA.

Aetna has been available in GA since at least 2010. AHL since 2015.

According to this the parent has swapped carriers in quite a few states.

And when they swapped they handed out some heavy increases on the legacy policyholders before introducing new rates.

In GA their new AHL rates were about 25% below last months rate with CLI.

Is this a pattern?

You decide.

So far their GA rates have been fairly consistent. Getting an app through the system (no underwriting) can be challenging. I have a few clients that insisted on Aetna during their open enrollment. Others have allowed me to place them with Aetna when they are in GI situations.

Haven't had any underwritten apps so can't say how they do there. They are one of the few carriers paying half commission on GI vs $25 one time with most carriers.

I believe they might have paid full comp on CLI GI business in GA and then later dropped to half.

Frankly I never understood why a few carriers would pay anything for GI business when most pay nothing. I figure that will come back on them at some point.

There are only so many dollars to work with in this business. If everyone is paying $25 one time and you are paying significantly more over 6 or 7 years that will skew your numbers in the wrong direction. You will write more "bad" business than your competitors (unless your name is Blue or UHC).

And if your regular comp is several points higher than your competition coupled with low rates that also erodes your loss ratio's.

There really is no magic in this business. It all comes down to numbers.

When you also reinsure competitor blocks you are in a position to manipulate your competition. Depending on the quota share arrangement the reinsuring carrier can dictate rates and underwriting.

The Medigap business is an interesting game. Watching carriers play with F and G rates, HH discounts and underwriting is fascinating strictly from a risk perspective.

 

[chrisgjim]

Talked to a lady the other day who is turning 65 in Sept. Agent told her MO only went up 1% per year. I showed her that they went up 9% this year, she immediately asked me if she could cancel it and go with me.