As I See It: Understanding Medicare Advantage

[somarco]

Well, when you had the opportunity to buy a Med Supp, you wanted the $0 plan and now it's too late for a Supp.

Over 40 years ago a high school coach helped to "give birth" to the concept of BTID (buy term invest the difference). It sounded great and he felt like his marketing concept (nothing new, Waddell & Reed started this idea 10 years earlier) would help the average "Joe & Mary" create wealth for themselves, not the insurance company.

Problem was, many folks who are poor will always be that way because they are spenders, not savers. Rather than buying lower cost term insurance and investing the difference, many bought term and SPENT the difference.

Many who push MAPD plans are doing the same thing with health insurance that Art Williams (A L Williams) did with term life insurance.

 

[somarco]

Going to go out on a limb here and say that most people in AZ don't put out $300 or more a month for a Med Supp and PDP.

Could be the same here . . . all I know is that I have fewer than a dozen folks paying over $200/mo for Medigap and most are on a PDP with a premium less than $12.

I just took a 73 year old woman with 4 low cost generic meds off an $80 MediBlue plan suggested by her daughter and enrolled her in a $7 PDP and $23 QUARTERLY copay saving her over $800 per year.

In a few weeks I expect to replace her $196 Medigap plan with an identical one that drops her premium by $40 per month.

 

[sshafran]

Over 40 years ago a high school coach helped to "give birth" to the concept of BTID (buy term invest the difference). It sounded great and he felt like his marketing concept (nothing new, Waddell & Reed started this idea 10 years earlier) would help the average "Joe & Mary" create wealth for themselves, not the insurance company.

Problem was, many folks who are poor will always be that way because they are spenders, not savers. Rather than buying lower cost term insurance and investing the difference, many bought term and SPENT the difference.

Many who push MAPD plans are doing the same thing with health insurance that Art Williams (A L Williams) did with term life insurance.

Respectfully, I know of zero agents saying buy MAPD and invest the difference.

 

[sshafran]

Could be the same here . . . all I know is that I have fewer than a dozen folks paying over $200/mo for Medigap and most are on a PDP with a premium less than $12.

I would say almost every single client of mine who bought between 2010-2014 would be over 200 if they were unable to change to a new supp underwritten, regardless of carrier.

It takes about 8+ years to get there if they start in the low $100s. Sometimes faster depending on age and carrier roll of the dice.

I can confidently tell my T65s with health conditions that want Medigap to expect to be in the $200s by the time they reach 72. And I think that's about accurate (this is for G. Not N - that's probably $150-165). Also, state dependent. Slightly higher in OH than NC. Not sure re Georgia.

 

[sshafran]

A $10/mo avg yearly rate increase over an 8 yr period on would actually be low.

 

[T Sparks]

SSHAFRAN is....

Spot on!

 

[somarco]

Respectfully, I know of zero agents saying buy MAPD and invest the difference.

I don't know either, but with all the talk of "look how much you save in premiums" it could have entered into the discussion. Of course, any "savings" (vs Medigap premium) could also be diverted to buying HI, cancer plans, FE, STC and any other baubles in their bag.

I would say almost every single client of mine who bought between 2010-2014 would be over 200 if they were unable to change to a new supp underwritten, regardless of carrier.

Most of mine still have the same plan originally bought. I probably rewrite 20 - 30 per year, the rest, that haven't departed this world, are holding fast. Some refuse to change even for a savings . . . can't explain that one.

As stated earlier, very few of my clients are paying over $200 per month. Part of that is due to making "good picks" going in, part is probably because all plans in GA are entry age, and part is just dumb luck.

I have never recommended a plan or carrier that I would not buy for myself, which limits the choice to 3 or 4 at any particular time. Even still, I rarely lose a sale (or a client), and almost never lose T65 to MAPD. My closing ratio with new clients is close to 100% and mid 90's for retention.

I don't project rate increases for new or existing clients. My magic 8 ball doesn't help and neither does looking at historical rate increases.

FWIW, avg rate increases over the last 5 years have been 4% to 7% depending on carrier. One carrier has consistently been around 4% every year, another has been as high as 6% with a couple of years of 0% increase.

Early on when I used MOO, GTL & Equitable my clients got burned. When I started limiting carriers I was willing to use production stayed did not drop, closing ratio increased and client retention increased.

All Medigap (no MAPD), all telemarketing (no F2F), nominal paid advertising, only market in one state, use very few carriers. It is a business model that works well for me. So why change?

 

[Yagents]

Funny, not one of my 800 med supp clients have moved to mapd yet this OEP. Many laugh at the misleading mapd superstar commercials.

In fact, I've rolled 7 from mapd plans to BCBS AZ G with their NO underwriting holiday for med supps this AEP. All in their mid 70's, uninsurable, and tired of managed care. They went from paying zero with dental, to paying $215 month for G plus pdp to escape mapd.

They called ME after speaking to their friends and wanted what they had... better provider choice, no pre auth, and no surprise bills.

I Also used this no underwriting holiday to replace a ton of MOO and Aetna supps (i was not AOR) above $300 mo due to huge rate increases over the years. Most were spouses of my current clients that were stuck, and a new door opened. A lesson learned that free service over the years eventually pays off.

 

[Midlevel]

In fact, I've rolled 7 from mapd plans to BCBS AZ G with their NO underwriting holiday for med supps this AEP. All in their mid 70's, uninsurable, and tired of managed care. They went from paying zero with dental, to paying $215 month for G plus pdp to escape mapd.

Hard to believe there are people out there who would rather spend 2500.00/year on premiums and then their reward is a $226.00 deductible for Part B and a crappy PDP with a $505 deductible and now they get to pay all their dental claims, vision and glasses, gym membership, OTC, etc. Guess it just depends on areas of the Country as far as providers, access to care, etc because I hear nothing from my clients about having a problem with any of that. God forbid they should get cancer and max out their $3900, then do the math and they still came out ahead by not having a premium and all the extra benefits. To each their own I guess. Happy Thanksgiving.

 

[sshafran]

Funny, not one of my 800 med supp clients have moved to mapd yet this OEP. Many laugh at the misleading mapd superstar commercials.

In fact, I've rolled 7 from mapd plans to BCBS AZ G with their NO underwriting holiday for med supps this AEP. All in their mid 70's, uninsurable, and tired of managed care. They went from paying zero with dental, to paying $215 month for G plus pdp to escape mapd.

They called ME after speaking to their friends and wanted what they had... better provider choice, no pre auth, and no surprise bills.

I Also used this no underwriting holiday to replace a ton of MOO and Aetna supps (i was not AOR) above $300 mo due to huge rate increases over the years. Most were spouses of my current clients that were stuck, and a new door opened. A lesson learned that free service over the years eventually pays off.

Are they paying comp on the no underwriting? If yes, that's great!

I fully get it. Plan G is absolutely excellent. I tell everyone that. I hate it when they have health issues and they have high premiums and they have limited resources, making the premium a big burden. But MAPD won't necessarily work in all situations, that's for sure. In that situation - I do tell them - "You have the absolute best insurance you can get. At least you don't have to worry about paying for Medical care."

Life Lesson - Turn 65 with enough lifetime cash flow to never think twice about the premium for insurance.