Is There Such a Thing As Locking Your Rate for a Medgap Plan?

[Todd King]

So is it ever possible for someone to "lock in their rate for 18 months"? I have heard agents say that they will tell the applicant that to help close the deal right then. This includes an agent from a video I watched from the Med Supp Sales Summit.

If I was going to write someone with Cigna 6 months out from their effective date, and Cigna drafts on the effective birthday month, then their rate would be locked in for a year from the effective date correct? So what if there is a rate increase during the 6 months leading up to their birthday month? In this case...would they be subject to the rate increase during the 6 months between the application and the effective date? Or would they actually "lock in their rate for 18 months"?

I don't know of any company that does an 18 month guarantee.

In your example of Cigna, I don't see that they would raise rates during the 6 months before the effective date. The rate should be locked in from the effective date, so in this scenario it would be 18 months. But since they really aren't paying anything until it becomes effective, it's hard to say that it's an 18 month guarantee.

 

[Residentzombie]

Insurance carriers that never increase rates on age just make up for it in their annual inflation rate adjustment so this is just a scam sales tactic. If the company does a 2% age increase and a 3% inflation increase, they will just give the policy holder a 5% inflation increase. Many carriers will however lock in the initial rate for 12 months, but this is all dependent upon what carrier you are looking at.

 

[alphawave2k]

Speaking of increases MLIC announced a 9.9% increase on all policies. Announcement reads as follows:
*All Medicare Supplement applications requesting an effective date before September 1, 2017 will receive the current 9-1-16 rates.

*Any Medicare Supplement application signed before September 1, 2017 requesting an effective date of September 1, 2017, or later, will receive the current 9-1-16 rates.

*Any Medicare Supplement application signed on September 1, 2017, or later, requesting an effective date of September 1, 2017, or later, will receive the new 9-1-17 rates.

*Any Medicare Supplement application re-dated on or after September 1, 2017 will receive the new 9-1-17 rates.

I have previously believed their rates were reasonable at issue time, but they have had annual increases of just under 10% for the past few years. Not cool...will have to start looking somewhere else.
While on the subject, which company today has current competitive rates that have really had stable rate increases over the past few years......
We all know the trend is and will continue to be higher rates and more claw-backs (i.e. increase of Part B Deductible, etc) there is no disputing this fact, but what can we do as responsible agents to insulate our client base best from these increases?
Above is mainly rhetorical, but if you feel inclined to comment, have at it.

 

[Residentzombie]

Speaking of increases MLIC announced a 9.9% increase on all policies. Announcement reads as follows:
*All Medicare Supplement applications requesting an effective date before September 1, 2017 will receive the current 9-1-16 rates.

*Any Medicare Supplement application signed before September 1, 2017 requesting an effective date of September 1, 2017, or later, will receive the current 9-1-16 rates.

*Any Medicare Supplement application signed on September 1, 2017, or later, requesting an effective date of September 1, 2017, or later, will receive the new 9-1-17 rates.

*Any Medicare Supplement application re-dated on or after September 1, 2017 will receive the new 9-1-17 rates.

I have previously believed their rates were reasonable at issue time, but they have had annual increases of just under 10% for the past few years. Not cool...will have to start looking somewhere else.
While on the subject, which company today has current competitive rates that have really had stable rate increases over the past few years......
We all know the trend is and will continue to be higher rates and more claw-backs (i.e. increase of Part B Deductible, etc) there is no disputing this fact, but what can we do as responsible agents to insulate our client base best from these increases?
Above is mainly rhetorical, but if you feel inclined to comment, have at it.

It all depends on your market, but some companies that are aggressive in having low T65 supplement rates are United Healthcare, Medico, and Mutual of Omaha in my area. Your FMO should be able to help you with this as well as playing around with your My Quote rate program. Mutual of Omaha is dangerous because they close their block of business every so often and start new ones. This causes the death spiral to be very bad for Mutual of Omaha policy holders in their later years. UHC now has a 36% enrollment discount for people age 65 (they shave 3% per year off the discount so the discount lasts only 12 years). You should be shopping your clients' supplements every 2 to 4 years anyway.

No agent has a crystal ball and anything can happen to these carriers. The biggest problem for Med supp carriers is the Guarantee Issue for people who lost MA coverage. Insurance carriers do not want this business because they cannot underwrite it. This is why they pay us almost nothing for non Part B effective date Guarantee Issue. When PrimeCare Gold (UHC's MA plan from the late 90s) went under, Conseco was the best priced Medicare supplement around and most people signed up for Conseco with Guarantee Issue. The result was that Conseco had double digit annual rate increases for the next 5 years because so many sick people joined without underwriting and it destroyed the company's ability to have affordable rates. As the rates kept going up, more and more healthy people switched leaving behind just the unhealthy people to cost share with. Underwriting is very important because insurance is cost sharing. Underwriting exists to protect all of the policy holders from having substantial rate increases and so the carrier has competitive rates. A good thing to look for if you are concerned with this is how well a carrier underwrites policies. Have a T65 client sign up for a carrier that is very strict on accepting underwritten business and try to avoid Mutual of Omaha whenever possible.

 

[Chazm]

While on the subject, which company today has current competitive rates that have really had stable rate increases over the past few years......
We all know the trend is and will continue to be higher rates and more claw-backs (i.e. increase of Part B Deductible, etc) there is no disputing this fact, but what can we do as responsible agents to insulate our client base best from these increases?
Above is mainly rhetorical, but if you feel inclined to comment, have at it.

In my area that would be UHC. Lowest Rates and lowest rate increases. But that's not typical across the us

 

[FLM2]

In my area that would be UHC. Lowest Rates and lowest rate increases. But that's not typical across the us

I have a client in Palm Beach County that I put on Mutual of Omaha in 2011, she is now 72 and her Plan F rate is being reduced from $260 to $240 next month, that is actually lower than the UHC Plan F rate for 65 year olds.

Each year I check to see if she is paying too much so I can switch her and have been continuously surprised, particularly since Mutual has such a bad reputation for rate increases nationally.

 

[yorkriver1]

I heard from a client that her friend (T65) was able to find an agent who helped her lock her rate for a supplement plan, and her friend's birthday month is Nov.

I always thought the rate for a supplement plan is determined by the effective date not the application date, and if an application is turned in before one becomes eligible for Medicare, and there is a rate increase between the application date and effective date, she will get the increased rate.

Am I correct on this?

TIA.

I have written at least 90 days out, and didn't get the memo about getting the payment up front to protect from a rate increase between writing and effective date. I did say the client would be protected, which was OK, since no rate increase, but must be more diligent in being clear on that. If they could buy a policy 6 months in advance before the next rate increase, they could save some money for a while. Carrier specific rules, it would seem.