Med Supp Ins. Rating After Policy Issue

[crs6633]

OK, I've scrubbed through this site hoping to find the answer to this question and am coming up empty handed wherever I go. Hopefully there the community can help to find the answer to this riddle.

I know all about the 3 rating types for pricing a supplement policy (attained, issue and community) and am aware that this info can be found by contacting the carrier but what about rate increases that occur AFTER the policy is issued and they happen at a much greater rate than average. I see this happening day in and day out where I'll speak with a client with a supplement that costs 3x the market rate and they have a ratable illness such as COPD, or insulin dependent diabetes. Now the carrier fully well knows that this client is stuck and can no longer change their plan due to medical underwriting issues and can only drop the coverage to original medicare or enroll in an MAPD.

My question is HOW do the carriers know that their client has a ratable illness? Is it through reviewing their claims?

The real question is how can I find companies that do not practice these forms of rate increases?

Any info would be greatly appreciated.

 

[somarco]

Post-issue underwriting is not allowed in most (all?) states. The rate they are paying has no bearing on how their health may have changed since issue.

 

[crs6633]

Hmmm, good to know. somarco, I appreciate the input. I'll have to dig in further on this one.

 

[GreenSky]

Hmmm, good to know. somarco, I appreciate the input. I'll have to dig in further on this one.

He gave you the correct answer so what must you "dig in further" to find out?

If you are looking to avoid carriers that screw clients on a wholesale basis after a few years then Mutual of Omaha comes to mind (although they say they're changing that).

Rick

 

[somarco]

although they say they're changing that

I have been hearing that for at least 3 years

 

[sman]

He gave you the correct answer so what must you "dig in further" to find out?

If you are looking to avoid carriers that screw clients on a wholesale basis after a few years then Mutual of Omaha comes to mind (although they say they're changing that).

Rick

Unfortunately it looks like several carriers have adopted the "if you can't beat them, join them" philosophy in that regard.

 

[crs6633]

Unfortunately it looks like several carriers have adopted the "if you can't beat them, join them" philosophy in that regard.

This is what I'm attempting to figure out. If the carriers are not increasing rates due to health then perhaps the standard rate increases are out of line? So which carriers (besides MOO)?

 

[Spud]

Hi, dont forget that each state department of insurance has to approve medigap rate adjustment requests for their own state. The DOI should be reviewing the financials of that company and results they have achieved within their particular state as well as nationally. If you live in a relatively small state, the insurance examiners may request and combine similar sized states in their financial analysis...their goal is to determine if the requested rate increase is 'reasonable'. In my state, these people are doing a good job (IMO) and will deny then negotiate with the insurance company on the requested rate increase if it isnt reasonable.

If you have not already done so, you might check to see if your state's doi provides access to the serff filing database. If so, this is an easy place to check on rate increase requests that are coming up.

One of the 8 measurements i use on medigap insurance companies to see if they can make on my recommend list is to look at the company's last 3 years medical loss ratio. If this ratio is 2 or more points higher than the national average, they dont get on the list. Also if a company has been in the medigap business 3 years/less, they dont either. Why? The fed's did a study of companies that has sequential double digit rate increases...the winners were companies that came to market with low ball rates and had been in the medigap business 3years/less.

I dont care for the past MOO model for doing business either and dont recommend their products. I see GPM (MOO takes care of their back office operations) has introduced their 2nd newly spawned company for selling their Medigap plans in my state (GPM's original entry is no longer competitive in my state)...i wont recommend them either.

 

[LostDollar]

One of the 8 measurements i use on medigap insurance companies to see if they can make on my recommend list is to look at the company's last 3 years medical loss ratio. If this ratio is 2 or more points higher than the national average, they dont get on the list. Also if a company has been in the medigap business 3 years/less, they dont either. Why? The fed's did a study of companies that has sequential double digit rate increases...the winners were companies that came to market with low ball rates and had been in the medigap business 3years/less.

Is access to loss ratio information limited to agent quoting tools such as CSG?

 

[somarco]

each state department of insurance has to approve medigap rate adjustment requests

Nope. Some states only require filing, not file and wait on approval.

look at the company's last 3 years medical loss ratio.

Where do you get this information? Do you think loss information on a statewide basis, small or large state, doesn't matter, is credible?