Medigap Shopping: Closing the Book & Rate Increases

JoeWras said:
The Medicare/Medicap decision, however, just gives me heartburn. I guess I'll have to reserve the entire year of age 64 to solving this problem. It seems that big.
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Not THAT big! What made it easier for me was knowing beyond any doubt, after my experience with ACA limited network policies, was I wasn't going to go limited network, period. Then the other big consideration was to not get stuck in a sick duck pool. That eliminated many possibilities. One thing I had to get used to was that you can't optimize; too many unknowns. And ones disposition on simplicity versus cost seems to play a big part. Lots of folks here don't want to do any book keeping, which means no HD plans. Then there is the N vs G thing, with the copay on N and does that affect the level of claims in the pool, and do those differences in claims make it into the pricing. Hmmm, maybe you better allocate the entire year of age 64 to the decision after all :)
 
sengsational said:
Then there is the N vs G thing, with the copay on N and does that affect the level of claims in the pool, and do those differences in claims make it into the pricing. Hmmm, maybe you better allocate the entire year of age 64 to the decision after all :)
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For starters, I have no idea what N and G mean.

Yes, I will have to dedicate some time to this. I don't want to fill my brain up 3 years ahead, though. Things may change in that time.
 
Midpack said:
A somewhat balanced summary but health insurance is a for profit business in our country, so we can’t be surprised if they behave as such - “nasty” doesn’t apply. They are not the source of the problem, they’re looking out for their shareholders in the system “we” established.
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I agree they're not the source of the problem, but I'll double down on my choice of the word "nasty."

Yes, the problem is the system. I suppose we're all to blame at some level, but there's very little an individual can do but play the hand we're dealt, and vote. Apparently the majority of "us" vote for those few who benefit from the current system, and against our own best interests.

Insurance is supposed to be a way to pool risk. Since we all need health care, it's not really a good way to pay for that. I'd go so far as to say it's not really insurance (except for catastrophic or long-term care.)

Companies exist to provide a product or service that customers need, first and foremost. Selling shares is just a way to raise capital for expansion. I'll never understand the argument that shareholders are the sole reason for a corporation to exist, and that theirs are the only interests which matter. We've all seen good, solid companies run into the ground by the MBA crowd trying to maximize profit at the expense of quality, customers and employees.
 
CaptTom said:
I agree they're not the source of the problem, but I'll double down on my choice of the word "nasty."

Yes, the problem is the system. I suppose we're all to blame at some level, but there's very little an individual can do but play the hand we're dealt, and vote. Apparently the majority of "us" vote for those few who benefit from the current system, and against our own best interests.

Insurance is supposed to be a way to pool risk. Since we all need health care, it's not really a good way to pay for that. I'd go so far as to say it's not really insurance (except for catastrophic or long-term care.)

Companies exist to provide a product or service that customers need, first and foremost. Selling shares is just a way to raise capital for expansion. I'll never understand the argument that shareholders are the sole reason for a corporation to exist, and that theirs are the only interests which matter. We've all seen good, solid companies run into the ground by the MBA crowd trying to maximize profit at the expense of quality, customers and employees.
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The rest of my post that you quoted was more representative than what you clipped out…

You can buy Medigap insurance that meets your needs from UHC/AARP. You may not like the price, which is why separating risk pools by closing books, and attained age supplements exist - if you’re healthy or younger, you’re going to choose lower premiums. Supplement providers are giving customers what they are willing to pay for - MBAs are reacting to customers.

What’s really better? Nothing but issue age single risk pool (no closing books) supplements OR starting new risk pools periodically. The former means we all pay the same over our lifetimes, the latter means some/many (relatively healthy/lucky) will pay less than others (some deserved, some not) - the overall cost is the same.

This has been an enlightening thread.
 
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REWahoo said:
As I've mentioned several times, if my Medigap plan gets too expensive I plan to use the one time "get out of jail free" process outlined in this thread: Medigap underwriting loophole?

A summary of the process to get our of your closed book plan and switch to a new Medigap plan - even if you cannot pass underwriting:
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I wonder what the odds are this loophole gets closed? My new rate will be $175/mo in July(turning 70) which is not horrible compared to rates I've seen posted by others but I would hate to miss the opportunity to use it as you know rates will certainly escalate as the pool is reduced going forward. But I wouldn't mind staying put for a while and keep my "get out of jail free" card in my hip pocket. What to do..........
 
Dawg52 said:
I wonder what the odds are this loophole gets closed? My new rate will be $175/mo in July(turning 70) which is not horrible compared to rates I've seen posted by others but I would hate to miss the opportunity to use it as you know rates will certainly escalate as the pool is reduced going forward. But I wouldn't mind staying put for a while and keep my "get out of jail free" card in my hip pocket. What to do..........
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It's not a loophole? Hopefully other readers realize rates will go up whether you find yourself caught in a closed book pool or not. The latter will just go up (considerably?) more with almost any supplement provider. Post #51 shows what kind of increases we all might want to plan for, aside from closed book pools.
 
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Dawg52 said:
I wonder what the odds are this loophole gets closed? My new rate will be $175/mo in July(turning 70) which is not horrible compared to rates I've seen posted by others but I would hate to miss the opportunity to use it as you know rates will certainly escalate as the pool is reduced going forward. But I wouldn't mind staying put for a while and keep my "get out of jail free" card in my hip pocket. What to do..........
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Very low I would think. It was a way to encourage people to try Medicare Advantage which has been pushed hard as lower cost overall to the Medicare system. People were reluctant in the face of losing their traditional option. However I don’t think this lower cost is true anymore as Medicare Advantage companies have learned how to charge more to the system - things like offering home health evaluations which can uncover “undiagnosed conditions” for example.
 
audreyh1 said:
Very low I would think. It was a way to encourage people to try Medicare Advantage which has been pushed hard as lower cost overall to the Medicare system. People were reluctant in the face of losing their traditional option. However I don’t think this lower cost is true anymore as Medicare Advantage companies have learned how to charge more to the system - things like offering home health evaluations which can uncover “undiagnosed conditions” for example.
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Probably the wrong thread to bring this up on.

According the KFF:
The Medicare Payment Advisory Commission (MedPAC) recently reported that Medicare will pay Medicare Advantage plans an estimated 123% of the cost of similar beneficiaries in traditional Medicare
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It would seem to me that Medicare has created a monster when allowing the Advantage plans. The overall cost to Medicare System is not lower. Maybe, just maybe, the rate increases would not be so disparate between Advantage and Traditional if Medicare supported them financially equally.
 
CRLLS said:
Probably the wrong thread to bring this up on.

According the KFF:


It would seem to me that Medicare has created a monster when allowing the Advantage plans. The overall cost to Medicare System is not lower. Maybe, just maybe, the rate increases would not be so disparate between Advantage and Traditional if Medicare supported them financially equally.
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Yes, creating a monster. It took decades to materialize, but was probably inevitable given the for-profit incentive.

It could also be that poorer and sicker people (yes there is a correlation) are more heavily represented in the Medicare Advantage group?
 
Buckeye said:
Does it still make sense to pay the premiums versus just paying the 20% not covered by Medicare out of pocket? At some point, it might make financial sense to just pay out of pocket.
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The problem is that there is no cap on annual part B charges. I think we would all be better off if there was. The closing the book game is just one way that insurers take advantage of consumers. The video was very informative. I didn't know about insurers outsourcing operations.
 
JoeWras said:
For starters, I have no idea what N and G mean.

Yes, I will have to dedicate some time to this. I don't want to fill my brain up 3 years ahead, though. Things may change in that time.
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I was like you... learned just enough to know I could put off learning about it until it was actually nearing the time to make the purchase. I started researching a few months before my wife turned 65.

I agree with your approach to iGNore the details...things will probably change, at least a little, in the mean time.
 
Thanks for the link. Although my Humana shares have been great over the long run it looks like there future will be less bright. My take is that the insurers have usually been a step ahead of the regulators. They did get a win with the 3 year phase in of the rule about risk adjustment but the limitations are coming.
 
True: the cart it to the bank in a dump truck scenario is coming to an end. But MA is still a good business to be in, it just won't be as hugely profitable. The final paragraph of the article stated:
"In either case, it isn’t going away—the business remains highly profitable. But the bonanza investors and health conglomerates got accustomed to in recent years has diminished for the foreseeable future."

But that does mean that in some states insurers will pull out of certain counties within certain states based on how their negotiations go with CMS for additional reimbursement. That's a headache for those who have the coverage as they need to pick a new plan, or return to Traditional Medicare plus Part D.

Having worked with this part of the industry before I retired, it is also possible that benefits will be limited. Aetna (CVS) in Washington state right now has no premiums and most drugs also have no co-pays. I expect to pay a premium next year and see more co-pays. Either way, the annual comparison of plans is still a required 'exercise.'
 
I think only about 10% of folks with MA plans change from year to year. In my experience a lot of the elderly aren't really capable of comparison shopping alone.
 
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