Aetna Continental Life Vs New Aetna Med Supp

[goillini52]

Is the 65% loss ratio required by CMS or some other entity? Who monitors and audits the loss ratio?

I remember having meetings about this when it first started in 1992 when Med Supps were Standardized. I believe it CMS. To be honest with you Bob, I don't think I've heard squat about this since 1992.

 

[rousemark]

Is the 65% loss ratio required by CMS or some other entity? Who monitors and audits the loss ratio?

I thought it was the states when they approve rates..

 

[somarco]

Thanks guys, but I am waiting on a response from Me. He is the apparent expert on this.

Louis, FWIW, I don't know how the DOI would know about loss ratio's for a carrier that is just starting to write Medigap business in that state. Obviously a virgin block would have a 0 loss ratio.

 

[rousemark]

Thanks guys, but I am waiting on a response from Me. He is the apparent expert on this.

Louis, FWIW, I don't know how the DOI would know about loss ratio's for a carrier that is just starting to write Medigap business in that state. Obviously a virgin block would have a 0 loss ratio.

Initially it is based on the actuarial projections.. After that it is based upon the actual numbers.

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Here is Tennessee's law (page 28) that tells how they go about determining it .When did CMS set the loss ratio for Med Supps? I know they have jurisdiction over Med Advantage because that involves contracting with Medicare to replace it. But Supps have always been under the jurisdiction of the sates I know when I was selling them, companies had different commission rates depending on the state's loss ratios. I think they are pretty well standardized now among the states but as far as I know they still have jurisdiction.

https://tn.gov/assets/entities/commerce/attachments/rulehearing072905.pdf

 

[somarco]

States have always had jurisdiction over fully insured health insurance policies, group and individual.

Still hoping for a response from Me since he/she broached this topic (loss ratio).

 

[ExProgrammer]

Initially it is based on the actuarial projections.. After that it is based upon the actual numbers.

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Here is Tennessee's law (page 28) that tells how they go about determining it .When did CMS set the loss ratio for Med Supps? I know they have jurisdiction over Med Advantage because that involves contracting with Medicare to replace it. But Supps have always been under the jurisdiction of the sates I know when I was selling them, companies had different commission rates depending on the state's loss ratios. I think they are pretty well standardized now among the states but as far as I know they still have jurisdiction.

https://tn.gov/assets/entities/commerce/attachments/rulehearing072905.pdf

There aren't similar laws for life policies are there?

 

[me112233]

Is the 65% loss ratio required by CMS or some other entity? Who monitors and audits the loss ratio?

The 65% minimum loss ratio is a federal law that has been adopted by state DOI's. The states are in charge of ongoing enforcement of the 65% ratio. When an insurance company sends in data for rate increases, it must include data on it's claims. The state departments of insurance can audit the loss ratio if it so chooses. While I'm not certain of this, I would think that the company's independent auditors would also check claim ratios.

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Initially it is based on the actuarial projections.. After that it is based upon the actual numbers.

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Here is Tennessee's law (page 28) that tells how they go about determining it .When did CMS set the loss ratio for Med Supps? I know they have jurisdiction over Med Advantage because that involves contracting with Medicare to replace it. But Supps have always been under the jurisdiction of the sates I know when I was selling them, companies had different commission rates depending on the state's loss ratios. I think they are pretty well standardized now among the states but as far as I know they still have jurisdiction.

https://tn.gov/assets/entities/commerce/attachments/rulehearing072905.pdf

The first major federal-level Medicare supplement regulation was done via the Omnibus Budget Reconciliation Act (OBRA) of 1990. This is where the standardized plans and the minimum claim ratios came from.

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Initially it is based on the actuarial projections.. After that it is based upon the actual numbers.

 

[somarco]

Medigap carriers look at national loss ratios to determine any base rate adjustments (up or down). These are then reviewed by block of business, including closed blocks. Adjustments are further made by plan design (F, G, Hi F, etc.)

This is their starting point.

Additional adjustments are made on a state by state basis.

State DOI's rarely perform an onsite audit unless the reported numbers indicate the carrier is in trouble overall financially. Cursory examinations are made based on data submitted. State DOI's really don't care about specific loss ratios and are mostly looking at total data to decide if a carrier needs to go on the watch list.

DOI's are terribly understaffed and don't have the time or manpower to do much more than investigate consumer complaints, review new carrier and plan filings and oversee carriers in receivership.

Rate changes on existing blocks are not filed with the DOI in many states. When a carrier changes rates on existing or even new blocks it is usually more of a marketing decision (approved by actuaries) than anything else.

 

[Spud]

HI, what evidence can you provide to support the comment?