My Assurant (Consumer - not Agent) Story

I do believe, though not in every case, where insurance companies have taken a wide berth when it comes to what they can increase at renewal.

Not everyone who gets that type of increase has that amount of claims. I sell insurance products. That does not mean that I take the insurance company's side every time. As I stated earlier, I straddle the fence on this.

I emphathize, not sympathize, with both sides.

What the consumer needs to understand is that health insurance is not a right, it's a privelage (sp?).

I seem to think I have a pretty good grip.

My last post on this site. Had enough.

Bye.
 
I have an Assurant client that bought a max plan 2 years ago, monthly premium 510, rates have increased to 950. They can't afford, but wife has some issues. None of my other companies have anywhere near these type of increases.
 
My heart does go out to you.


What happens to you, happens to others. I'm going to attack this from another avenue. You are an intelligent individual, who runs their own company. My question to you is: When you noticed you were not getting the service you felt you deserved from your agent, why did you not look for another agent to provide you competitive quotes? Would you not do that with a vendor, who promised delivery, but did not come through?

The first couple of years with Assurant when it was Fortis and before we had any health issues, we thought the premiums were fair and we were paying everything related to our health care ourselves as the expenses fell below the deductible. This was true in 2000, 2001 & until December of 2002 - so almost 3 years and then the disasters struck. When that happened, we knew we were no longer marketable and we were grateful to have obtained the Assurant policy when we did - planned to stick with it for life.

Because of that we had no reason to call the agent and I guess he had no reason to call us. I was not really complaining about the agent - just expressing surprise that agents here talked like they keep in touch with their health insurance clients.


You said you didn't hear from this agent, but did receive literature, or calls, asking you to work with him on other products. Was there any attempt on your part to contact him, recieving this literature, and asking, "listen, we need to talk about the health plan. When can we meet?"

While I'm not defending him, he was sending you invites to meet with him, which you did not take advantage of. Now, if he was non-responsive, that's one thing.
We never received invites to meet with him - only periodic newsletters. The last time we spoke which was probably 5 years ago, he told me he was no longer selling health insurance - he had decided to focus on the financial planning side of his business. I don't know how that affected his relationship with Assurant but he is still listed on our premium invoices as our agent.

I don't have anything bad to say about the agent in question - in early 2000 we called him when we were in the market for health insurance because he was the only one we knew at the time who was selling high deductible MSA's. Congress had just passed legislation permitting the sale of 750,000 policies to test market the idea. At the time we signed on, only a few hundred thousand policies had been written - we were glad to get in the initial pool.

I never expected to hear more from him. I was merely expressing surprise at what seemed to be the general expectation here that agents maintain a close agent/client relationship.
 
This is not an agent problem - this is an Assurant problem, their rate increases and blocking techniques are way out of line with what is normal in the market.

Blocking is dirty business, I think Illinois last year tried passing legislation to limit the margins between blocks - I am not sure if it passed yet or not.

I bet 90% of agents out there have no idea what blocking is, or how it works - and virtually 100% of consumers do not know about it either.

It is hands down the dirty secret of the industry.
 
This is not an agent problem - this is an Assurant problem, their rate increases and blocking techniques are way out of line with what is normal in the market.

Blocking is dirty business, I think Illinois last year tried passing legislation to limit the margins between blocks - I am not sure if it passed yet or not.

I bet 90% of agents out there have no idea what blocking is, or how it works - and virtually 100% of consumers do not know about it either.

It is hands down the dirty secret of the industry.

I agree this is not an agent problem.

Can you explain in more detail what constitutes "blocking"?

When I talked to Assurant, they assured me that Pennsylvania had "signed off" on discontinuing our plan. I have made an inquiry with the PA Insurance Commission to confirm that but so far I haven't heard anything except that they received my question.
 
"What's the word Ed??? Can you do it or are you thinking something else?"

Sorry Sal. I was watching a dismal offensive performance by our Steelers tonight. Fortunately, our newly-found backup moved the ball down the field in the last minute, allowing for a game-winning field goal.

And I did exchange emails with Pipedream. I believe they are on the right track now.
 
"What's the word Ed??? Can you do it or are you thinking something else?"

Sorry Sal. I was watching a dismal offensive performance by our Steelers tonight. Fortunately, our newly-found backup moved the ball down the field in the last minute, allowing for a game-winning field goal.

And I did exchange emails with Pipedream. I believe they are on the right track now.

Apparently Scott and I are the only ones who viewed this as an opportunity to share our thoughts about what to do in a public venue.
 
Can you explain in more detail what constitutes "blocking"?

I have never heard this term used by carriers but based on Joe's comments, I assume he is referring to block rating or block underwriting.

This is not unique to insurance. Lenders use similar practices to separate high risk from low risk clientele.

Individual health insurance is one of the few lines of coverage that does not allow retrospective rating on renewal. If you have an auto policy and from one renewal to the next you have an at fault accident or accumulate points your renewal is affected.

In other words, the carrier is allowed to review your risk baseline and adjust rates accordingly.

Not so with health insurance.

Renewals are applied without regard to individual claims. Your increases would have been the same even if you had zero claims over the last 7 years or so.

But the block that was written in PA in 2000 continued to deteriorate. This is true with all individual plans. As rates increase the healthy ones leave and those who are not healthy stay. The number of insureds in the block, and the premium base, continues to deteriorate as claims increase.

Eventually it becomes a money loser, offset by newer business that is freshly underwritten. As the block becomes less and less profitable that policy series is retired and replaced with newer plans that are usually not as rich in benefit and sometimes, though not always, lower in price.

The practice of block underwriting is universal and supported by claim data and actuarial studies. All individual health insurance blocks track the same pattern with few exceptions. Year one is profitable, year 2 is marginally profitable to break even, year 3 and later is where the block starts to deteriorate to the point it is usually no longer profitable to sustain. The only question is, how long will the carrier maintain that block before they do a complete rewrite by discontinuing old policy forms and replacing them with newer ones.
 
Not so with health insurance.

Renewals are applied without regard to individual claims. Your increases would have been the same even if you had zero claims over the last 7 years or so.

Understood.

But the block that was written in PA in 2000 continued to deteriorate. This is true with all individual plans. As rates increase the healthy ones leave and those who are not healthy stay. The number of insureds in the block, and the premium base, continues to deteriorate as claims increase.
Would the following be an appropriate analogy?

Its a beautiful summer day. Lots of people on the beach. There is a fee to get into the water but it is a reasonable one if you qualify to enter the pool. Everyone wants to get into the water but not all may do so.

To determine if a person may join the swimming group...there must be no incidence of water swallowed or choking in a previous swim, one must have passed their HS swim class, have no discernible physical or mental handicaps - and have no foreseeable likelihood of experiencing any of the aforementioned conditions once they are in the water.

With the payment of the fee, the qualified swimmers enter the ocean, pretty darn proud of themselves for having passed the pre-qualification test, but knowing that should the unthinkable happen, they can feel secure in the knowledge of the promises made to them. That is, should they be injured, flounder in a riptide, or need a lifeguard, the collector of the fees, will make sure someone will be on hand to rescue them. If case of a near or actual drowning, the fee collector will pay for the equipment and personnel to make the rescue attempt(s).

As the fee collector watches the swimmers, he notices that most of the swimmers are doing well, but some are having slight problems remaining afloat while a few are viciously attacked by sharks or have been caught in an undertow. His costs go up but still, with everyone in the same pool and increasing all the swimming fees, they are manageable.

Eventually, the fee collector sends out a boat - but instead of rescuing the floundering swimmers, he beckons the strong and as yet uninjured swimmers to board. Some who are tiring slightly but still doing well, hear about the trip and ask if they can go along. The fee collector agrees but at a higher price than the strongest swimmers. Then the strong and the newly re-qualified sail off to a new pool with promises of rescue should it be needed. And so it goes.

Eventually the weak and injured can no longer stay in the pool at all due to the rising costs. They get what they deserve for the misfortune they have encountered. Gee, I hope they do OK.



Eventually it becomes a money loser, offset by newer business that is freshly underwritten. As the block becomes less and less profitable that policy series is retired and replaced with newer plans that are usually not as rich in benefit and sometimes, though not always, lower in price.

The practice of block underwriting is universal and supported by claim data and actuarial studies. All individual health insurance blocks track the same pattern with few exceptions. Year one is profitable, year 2 is marginally profitable to break even, year 3 and later is where the block starts to deteriorate to the point it is usually no longer profitable to sustain. The only question is, how long will the carrier maintain that block before they do a complete rewrite by discontinuing old policy forms and replacing them with newer ones.
Now that I understand this, I believe this is will eventually cause changes to the "for-profit" system that we have now. And most likely, everyone will be screaming against it.

But with the baby boomers aging and this blocking business happening to more and more of them there is going to be an outcry for a national risk pool for catastrophic coverage. Which is what I thought we were purchasing when we started on this journey in 2000. I never expected Fortis to pay for routine care - obviously choosing a $5,500 deductible plan shows that. All we needed was assurance of coverage in case of catastrophies.

Policies should be sold with small print that says, "Catastrophies are covered unless there are too many or they last too long, i.e., over X number of years."
 
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