Issue Age Med Supp vs. Community Rated Med Supp

[azmedsupagent]

Can anyone speak on the differences between issue age premium increases VS community rated premium increases. I know that with community rating everyone is charged the same in that particular community. With Issue age your premium is based on the age at which you obtained the policy. I guess my question is, if a company has an issue age premium will its premiums be more stable over time vs a community rated premium? I mean becuase if you have a community rated premium and you live in a community with high claims experience than your premiums will be more volatile than if you lived in a community with lower claims experience. Am I right? And if you have an issue age rated premium than your premiums are likely not going to be as volatile due to the fact that your premium is based upon the age at which the policy is issued more so than claims experience. I may be way off here but In my experience that appears to be the case. I am wondering what everyone elses experience has been.

 

[MedSuppPro]

Re: Issue Age Med Supp VS Community Rated Med Supp

Frank may take aim at me on this one, but here's my two cents...

It is all just a big ponzi scheme. IMHO they all end up about the same over time. You can't hide a rate increase behind the fat lady at the circus. And I'm not using the fat lady illustration as a pejorative.

 

[timsip]

Re: Issue Age Med Supp VS Community Rated Med Supp

I may misunderstand the term issue age that you are using, but here is my take on it. One thing to keep in mind is the number of increases per year. In the issue age form of premiums, there typically are two rate increases the beneficiary experiences. The company will increase rates for everyone across the board each year, then when you turn a year older, you get the new age rate. As an illustration, if you wrote a policy for a 69 year old two years ago, they received a rate increase on their 70th birthday. Then, this year when the company came out with their new rates, they got that increase. Then, when they turned 71, they get that rate increase. So, this year, they got the annual rate increase of anywhere from 1-15% that everyone on that company's plans got, then when they got a year older, their rate increased to match the age.

Obversely, if you go with a community rate, there is only one rate increase. AARP comes to mind. Everyone in a given community pays the same amount and receives the same rate increase. Unless AARP increases their rates twice a year, the beneficiaries only get one rate increase per year.

Of course, I could misunderstand what you were asking.

 

[MedSuppPro]

Re: Issue Age Med Supp VS Community Rated Med Supp

I agree Tim,

But, I've seen AARP's rates go up 50% with one increase. And having one rate regardless of age attracts lots of older more expensive members in that good old pool.

 

[GreenSky]

Re: Issue Age Med Supp VS Community Rated Med Supp

I find that age rating is usually a better value for most people under 80. This may vary by state so simply do a comparison.

For community rated plans, it is more attractive to older people. Athough underwriting is an issue, I would think that pricing for community rated would tend to increase more because of that.

Rick

 

[senior-advisor-indiana]

Re: Issue Age Med Supp VS Community Rated Med Supp

I may misunderstand the term issue age that you are using, but here is my take on it. One thing to keep in mind is the number of increases per year. In the issue age form of premiums, there typically are two rate increases the beneficiary experiences. The company will increase rates for everyone across the board each year, then when you turn a year older, you get the new age rate. As an illustration, if you wrote a policy for a 69 year old two years ago, they received a rate increase on their 70th birthday. Then, this year when the company came out with their new rates, they got that increase. Then, when they turned 71, they get that rate increase. So, this year, they got the annual rate increase of anywhere from 1-15% that everyone on that company's plans got, then when they got a year older, their rate increased to match the age.

Obversely, if you go with a community rate, there is only one rate increase. AARP comes to mind. Everyone in a given community pays the same amount and receives the same rate increase. Unless AARP increases their rates twice a year, the beneficiaries only get one rate increase per year.

Of course, I could misunderstand what you were asking.

When you say issue age tim, you are actually describing attained age.

 

[G.Gordon]

Re: Issue Age Med Supp VS Community Rated Med Supp

I may misunderstand the term issue age that you are using, but here is my take on it. One thing to keep in mind is the number of increases per year. In the issue age form of premiums, there typically are two rate increases the beneficiary experiences. The company will increase rates for everyone across the board each year, then when you turn a year older, you get the new age rate. As an illustration, if you wrote a policy for a 69 year old two years ago, they received a rate increase on their 70th birthday. Then, this year when the company came out with their new rates, they got that increase. Then, when they turned 71, they get that rate increase. So, this year, they got the annual rate increase of anywhere from 1-15% that everyone on that company's plans got, then when they got a year older, their rate increased to match the age.

Obversely, if you go with a community rate, there is only one rate increase. AARP comes to mind. Everyone in a given community pays the same amount and receives the same rate increase. Unless AARP increases their rates twice a year, the beneficiaries only get one rate increase per year.

Of course, I could misunderstand what you were asking.

You are very off track.

Issue age = you are the age at issue to that company no matter how long you have that policy. So if you buy a sup at 65 you are 65 forever with that company. Issue age... you are the age at issue forever.

Attained age = you get a new rate every year you ATTAIN a new age.

Community rated = self explainatory.

Read man. It's spelled out in English in the Medicare and You pub.


No clue as far as which, community/issue age, will get the most rate increases. I can tell you this... attained age is more stable than issue age. They are basically gauranteed a small rate up each year, but it makes the need for larger increases due to claims loses less.

 

[Frank Stastny]

Re: Issue Age Med Supp VS Community Rated Med Supp

Frank may take aim at me on this one, but here's my two cents...

It is all just a big ponzi scheme. IMHO they all end up about the same over time. You can't hide a rate increase behind the fat lady at the circus. And I'm not using the fat lady illustration as a pejorative.

Not at all. Both Issue Age and Attained Age policies both increase in cost. They just do it a little differently.
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You are very off track.

Issue age = you are the age at issue to that company no matter how long you have that policy. So if you buy a sup at 65 you are 65 forever with that company. Issue age... you are the age at issue forever.

Attained age = you get a new rate every year you ATTAIN a new age.

Community rated = self explainatory.

Read man. It's spelled out in English in the Medicare and You pub.


No clue as far as which, community/issue age, will get the most rate increases. I can tell you this... attained age is more stable than issue age. They are basically gauranteed a small rate up each year, but it makes the need for larger increases due to claims loses less.

Spot on.

However, in my experience Issue Age is a lot better for policy retention. Premium increases do not just automatically come each year. Seniors like and appreciate it.

Continental Life would go several years without an increase and then only go up 9% on their Plan D when the same year Plan F went up 25%.

I have sold both Issue and Attained Age policies. I much prefer representing an issue age company as opposed to an Attained Age company.

I sold Med Supps in IL for a while several years ago. IL was Attained Age. Every year, even though I had explained it and why it happened, when my clients received the increase they would be PO'd.

In Missouri all companies use to be Attained Age except the one I was captive with. I sold a lot of Med Supps simply showing prospects that they would not automatically receive a premium increase every year.

The company I was representing had gone for five years without a premium increase. That gave me a huge advantage over all the others.

Then, the MO DOI decided that all companies in MO would have to be issue age.

 

[timsip]

Re: Issue Age Med Supp VS Community Rated Med Supp

You are very off track.

Issue age = you are the age at issue to that company no matter how long you have that policy. So if you buy a sup at 65 you are 65 forever with that company. Issue age... you are the age at issue forever.

Attained age = you get a new rate every year you ATTAIN a new age.

Community rated = self explainatory.

Read man. It's spelled out in English in the Medicare and You pub.


No clue as far as which, community/issue age, will get the most rate increases. I can tell you this... attained age is more stable than issue age. They are basically gauranteed a small rate up each year, but it makes the need for larger increases due to claims loses less.

Wow dude, I even said that I might misunderstand what was meant by the terms the original poster was using. Thanks for clearing it up, but get off your high horse, horses ass. When I come off as saying I know everything and I am right when I am wrong you can come across as condiscending, until then shut it!
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Not at all. Both Issue Age and Attained Age policies both increase in cost. They just do it a little differently.
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Spot on.

However, in my experience Issue Age is a lot better for policy retention. Premium increases do not just automatically come each year. Seniors like and appreciate it.

Continental Life would go several years without an increase and then only go up 9% on their Plan D when the same year Plan F went up 25%.

I have sold both Issue and Attained Age policies. I much prefer representing an issue age company as opposed to an Attained Age company.

I sold Med Supps in IL for a while several years ago. IL was Attained Age. Every year, even though I had explained it and why it happened, when my clients received the increase they would be PO'd.

In Missouri all companies use to be Attained Age except the one I was captive with. I sold a lot of Med Supps simply showing prospects that they would not automatically receive a premium increase every year.

The company I was representing had gone for five years without a premium increase. That gave me a huge advantage over all the others.

Then, the MO DOI decided that all companies in MO would have to be issue age.

Not having an increase in five years sounds good on the surface, but eventually the company is going to have to have an increase. I personally would be weary of those that can go that long without an increase as the next one could be the biggie. That is, of course unless you change companies to the lowest priced ones every year and resell your clients every year.

 

[G.Gordon]

Sorry to hurt your feeling there buddy. It just surprises me when agents ask basic knowledge questions and they are susposed to be the EXPERT. You are trying to sell supps right? If so, you need to know all that and then some.

Don't mean to sound mean, but when you have to ask that stuff instead of "knowing it" or at least knowing what publication it is in.... that's alarming.

While this site is good for learning in depth stuff, situational knowledge, or techniques for making the most $$$ one should take time away from the computer and crack a book.

Good selling.