2009 Medsupp Premium Increases

[Frank Stastny]

The NAIC web site. I couldn't find it today, but I'll try to look over breakfast.

Hospice is added to supplements. Why... I don't know. I think it will be a mandated benefit above/beyond what Medicare covers currently.

Bottom line... it is on the new design that will be effective 6/10

Med Supps have ruled since 1992. I think all the crap that is going down and coming from CMS will only make Med Supps stronger. And, with the changes you say are forthcoming they are only going to get stronger.

Maybe, just maybe I have made a good decision for a change by not putting a bunch of my "country people" in a PFFS plan. Med Supps have been very good to me and it looks like they are only going to get better.

Thanks for sharing.

 

[retread]

Med Supps have ruled since 1992. I think all the crap that is going down and coming from CMS will only make Med Supps stronger. And, with the changes you say are forthcoming they are only going to get stronger.

Maybe, just maybe I have made a good decision for a change by not putting a bunch of my "country people" in a PFFS plan. Med Supps have been very good to me and it looks like they are only going to get better.

Thanks for sharing.

I think you may be right about this, Frank. It stands to reason that if Med Sups are re-vamped and the premiums lowered that they will be more competitive with MA plans. However, wouldn't that also mean lower commissions?

I guess I should make it up on volume, eh?

 

[Frank Stastny]

I think you may be right about this, Frank. It stands to reason that if Med Sups are re-vamped and the premiums lowered that they will be more competitive with MA plans. However, wouldn't that also mean lower commissions?

I guess I should make it up on volume, eh?

When I started selling Med Supps they were around $70 per month and my commission was 15%. I made a ton of money at that time, six figures after three years.

If an agent will just concentrate on writing apps, regardless of how large or small the commission is, the money will follow. I'd rather write ten apps at 10% than five at 20%. I never think in terms of percent of commission, only money earned. Fifty percent commission doesn't mean a thing if one is not writing apps.

 

[azmedsupagent]

The NAIC web site. I couldn't find it today, but I'll try to look over breakfast.

Hospice is added to supplements. Why... I don't know. I think it will be a mandated benefit above/beyond what Medicare covers currently.

Bottom line... it is on the new design that will be effective 6/10

I found it!!! Here is the link.

www.naic.org/documents/committees_b_senior_issues_medigap_impl_pp.ppt

It sounds like they are doing away with the 120 yearly preventative benefit, elimiating plan J (sucks for American Republic captives) eliminating at home recovery, and increasing the 80% excess charge benefit and increasing it to 100%, and creating two new plans with greater cost sharing like K and L. There are some other regulations in regard to genetic information etc... Overall it doesnt look like anything that will reduce premiums by very much, I think they are just triming off some the benefits that arent used very often and bolstering the benefits that are used frequently. Sounds like a wash to me...

 

[G.Gordon]

I found it!!! Here is the link.

www.naic.org/documents/committees_b_senior_issues_medigap_impl_pp.ppt

Overall it doesnt look like anything that will reduce premiums by very much, I think they are just triming off some the benefits that arent used very often and bolstering the benefits that are used frequently. Sounds like a wash to me...

What it is going to allow companies to do is "reset" their claims loss experiences. In other words if the companies elect to they will be able to "start over" 6/10. This is going to creat a massive "sale" on med supps. If one or two of the big boys elect to reset all the other players will follow so they aren't left behind and get washed out of the market. The new plans will be great is the companies price them right.

I wouldn't want to be a MA company for the AEP 11/10.

 

[MedSuppPro]

New Changes to Medigap
States Need to Adopt the Amended NAIC Medicare Supplement Model before July 1, 2009 / September 24, 2009
Overview
1. Medigap – Review changes approved by NAIC in March 2007.
2. Medigap – Changes made by Genetic Information Nondiscrimination Act (GINA).
3. Medigap – Authorization and changes made by Medicare Improvements for Patients and Providers Act (MIPPA).
Medigap – Key Dates
March 11, 2007 = NAIC Plenary approved Medigap modernization changes -- pending Congressional authority. States are asked not to adopt new changes until Congressional action taken.
October 31, 2008 = Statutory deadline for NAIC to adopt changes to Medigap model, to conform with GINA and MIPPA. (Likely actual NAIC adoption = 9/24/08)
May 21, 2009 = Effective date for GINA requirements.
July 1, 2009 = GINA deadline for state adoption of requirements.
Sept. 24, 2009 = Likely deadline for states to adopt all NAIC Medigap model changes as required/authorized by MIPPA (including the March 2007 revisions).
June 1, 2010 = Effective date for modernized Medigap plans/benefits to be sold.
Medigap – Review changes approved by NAIC in March 2007
March 2007 Medigap Modernization Changes
In response to Congressional report language included in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), the NAIC Senior Issues Task Force assembled a Subgroup to work on the modernization of Medigap plans and benefits.
The Subgroup was comprised of state regulators, CMS representatives, consumer advocates, industry representatives, and other interested parties.
The Subgroup developed a modernization proposal, contained in revisions to the NAIC Medigap model regulation.
March 2007 Medigap Modernization Changes
Summary of changes approved by NAIC in March 2007:
Overall = Reduces number of plans from 14 to 11.
Eliminates Plans H, I, and J. (Became duplicative, after MMA.)
Eliminates Plan E. (Became duplicative, after other changes made.)
Creates new plans M and N. (New options with higher beneficiary cost-sharing and lower anticipated premiums.)
Eliminates outdated “At-Home Recovery” benefit.
Creates a new “Hospice” benefit, which is added to every plan as part of Basic (Core) benefits.
Eliminates outdated and underutilized “Preventative Care” benefit.
Replaces the 80% Part B Excess Charges Benefit with 100% benefit.
March 2007 Medigap Modernization Changes
Existing policyholders may keep their old policies.
The model includes transition standards to permit companies to offer existing policyholders the opportunity to leave their old policy and purchase a new policy, if they choose.

March 2007 Medigap Modernization Changes
On March 11, 2007, the NAIC Plenary approved these revisions to the NAIC Medigap model regulation. However, states and CMS were unable to proceed with these changes until Congressional authorization was approved. States were asked not to adopt these new changes until Congressional action was taken.


2. Medigap – Changes made by Genetic Information Nondiscrimination Act (GINA).
GINA Requirements
The Genetic Information Nondiscrimination Act of 2008 (GINA) was enacted on May 21, 2008 and prohibits the denial, conditioning, or discrimination in the pricing of a Medicare supplement policy on the basis of genetic information.
GINA also limits the ability of Medicare supplement issuers from requesting or requiring genetic testing, and prohibits the collection of genetic information for underwriting purposes or other purposes prior to enrollment.
GINA Requirements
GINA provides the NAIC with the opportunity to make conforming model law changes by October 31, 2008.
If the NAIC does not make the necessary changes by that date, the Secretary of HHS is required to make modifications to federal rules, which would then be considered the governing regulation.
The effective date for GINA requirements is May 21, 2009 (one year from the date of enactment). However, GINA gives states until July 1, 2009 to make regulatory or statutory changes.

3. Medigap – Authorization and changes made by Medicare Improvements for Patients and Providers Act (MIPPA).
MIPPA Requirements
The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) was enacted on July 15, 2008.
MIPPA Requirements
MIPPA authorizes the revisions to Medigap plans and benefits contained in the model law revisions approved by NAIC in March 2007.
However, MIPPA also imposed new requirement:
Requires that any carrier that chooses to offer a Medigap policy other than Plan A, must also offer either Plan C or Plan F.
MIPPA Requirements
MIPPA requires that the NAIC make conforming changes to the Medigap model regulation, as well as the changes required by GINA, by October 31, 2008.
(Likely date of NAIC adoption = 9/24/08.)
States then have 1 year to adopt (9/24/09).
New plans would be sold effective June 1, 2010.

MIPPA Requirements
MIPPA also clarifies that plans attempting to supplement Medicare Advantage must comply with existing Medigap requirements.
March 2007 changes, GINA, and MIPPA
On Wednesday, the NAIC Plenary will consider the Medigap model regulation approved in March 2007, with revisions to conform with both GINA and MIPPA.

March 2007 changesand MIPPA
As a result of the March 2007 Medigap modernization revisions and the requirements of MIPPA, states will have to consider:
Effective dates and timelines;
Promulgation of new state regulations;
Whether changes need approval of state legislature (including timing of legislative sessions);
Review and approval of new form filings by Medigap carriers prior to June 1, 2010 effective date;
Review and approval of new Medigap marketing materials and consumer materials.

Conclusion
Failure to adopt the changes to the NAIC Medicare supplement model ( No. 651) in the time frames contained in the federal law could result in a state being preempted from regulating Medicare supplement business
In addition to this presentation, we have prepared an implementation book that contains FAQ’s, an implementation time line and sources for state regulators to go to with questions

 

[retread]

I hope you didn't miss the part where CMS has also implemented FYC commission to be 200% of renewals for Medigaps just like they did for MAs!

 

[captain94]

I hope you didn't miss the part where CMS has also implemented FYC commission to be 200% of renewals for Medigaps just like they did for MAs!

I dont see that anyware? where does it say that?

 

[sman]

I hope you didn't miss the part where CMS has also implemented FYC commission to be 200% of renewals for Medigaps just like they did for MAs!

I'm with captain, I don't see that anywhere. Please document your source. I understand why they can make these rules with MA plans since they are funded with tax dollars, but that's not the case with supplements. I can't imagine them being able to dictate that since the carriers are not getting any funding. Then again, we are talking about the government.

 

[retread]

I'm with captain, I don't see that anywhere. Please document your source. I understand why they can make these rules with MA plans since they are funded with tax dollars, but that's not the case with supplements. I can't imagine them being able to dictate that since the carriers are not getting any funding. Then again, we are talking about the government.

C'mon guys.... my wife lets me hide my own Easter eggs, and youse can't uncover this simple fact?

Section 16. Permitted Compensation Arrangements​

A. An issuer or other entity may provide commission or other compensation to an
agent or other representative for the sale of a Medicare supplement policy or
certificate only if the first year commission or other first year compensation is no
more than 200 percent of the commission or other compensation paid for selling
or servicing the policy or certificate in the second year or period.
B. The commission or other compensation provided in subsequent (renewal) years
must be the same as that provided in the second year or period and must be
provided for no fewer than five (5) renewal years.
C. No issuer or other entity shall provide compensation to its agents or other
producers and no agent or producer shall receive compensation greater than the
renewal compensation payable by the replacing issuer on renewal policies or
certificates if an existing policy or certificate is replaced.
D. For purposes of this section, “compensation” includes pecuniary or non-pecuniary
remuneration of any kind relating to the sale or renewal of the policy or certificate​

including but not limited to bonuses, gifts, prizes, awards and finders fees.