What is happening?

[tomsteers]

We just received our AARP Supplement cost starting in June.  Both of us will pay $63.01 more each month.  That's a sudden monthly increase of $126.02 for our limited income.  It doesn't seem right.  Can someone help me to understand how this new influx of income for UnitedHealthcare will help us?  TY!

[GailL1]

@tomsteers - YOUR state approves these increases to Medigap premiums.  And increases are happening with many other insurers - Do you know how it is done?  It isn’t just a whim or that they want more money - they have to prove their cost in the plans compared to what they are taking in in premiums.  They also have to keep a reserve amount so that all claims can be paid on a timely basis.  A medical loss ratio is the % of claims paid vs premiums collected. 

It is true that these Supplemental plans are not health insurance and thus they do get be a bit higher than health insurance insurers in this %.  For health insurers, they must pay out 85% of every dollar for claims; the remaining 15% is what is reserved for Administrative cost and their profit.  For Medigap plans this % is more like 75% - with the remaining 25% or so for Administration and profit.

You get based on the plan you have chosen, the same thing you have always gotten - That is - Financial protection insurance to prevent a financially catastrophic medical event if you have Original Medicare since OG Medicare does not limit your out of pocket expense at all.   That is what a Medicare Supplemental plan is - Financial protection - A GAP PLAN.

Medigap plans increase in premium cost based on (1) USAGE ( 2) RISK and (3)INFLATION.  I assume you understand USAGE and INFLATION - RISK can vary by area or plan.  The more risk the beneficiary takes upon themselves, the cheaper the premiums for that plan - that is why a High Deductible Plan G has cheaper premiums that a Regular Plan G.  

States play a part in this risk factor because they can pass laws to open up their guaranteed issue rights WITHOUT underwriting - if they do this then people can switch plans or insurers based on the state’s law with out any underwriting, 

AND the state  can give those who are less than 65 and have Medicare because of a disability the right to buy a Medigap plan and some states don’t restrict this to a particular plan - and some states don’t even allow the insurer to change extra for these high health care users.

Federal law does not allow for those less than 65 to get a Medigap plan at all - Federal law only allows for some very specific conditions when a person can switch their Medigap plan without underwriting.  Insurance is a you pay for me and I pay for you type product.  Thus we are all carrying the cost of all users - and in some states the very high users because of their health condition and because these states have eliminated the underwriting qualifications for switching plans.

Premiums in those states where their rules are more lenient in the risk regards tend to be higher because the insurer is taking on more risk - the risk is the health of those who are getting their plan with no underwriting or health assessment.

[shamit]

It's not just United Healthcare that has increased premiums.  We have Aetna and ours went up $108 a month.  Luckily we live in a state with a birthday rule.  This is my and my husband's birthday month.  We have appled to another company (formerly Cigna), our rate will go down $114.91 a month. 

I believe insurance rates are totally out of control.  Part of it is our litigious society.  This increases malpractice insurance.  Doctors and Hospitals charge more to cover the increased malpratice premiums.  So health insurance companies pay more for our care, which results in higher premiums for us. My husband takes no medications, has no medical problems, and he rarely goes to the doctor.  Yet Aetna is charging him $271.37 a month.

[GailL1]

@shamit wrote . . . . We have appled to another company (formerly Cigna), our rate will go down $114.91 a month. 

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No doubt that others will do the same as you and switch to this other carrier just like you did - and nobody is having to go thru underwriting, if they switch based on the birthday rule in your state.

But doesn’t that just mean that this new insurer will in a year or two have to possibly raise their rates too because it could be that those switching to their plan are hefty health care users.  

So I wonder if it is possible that years from now, you might be switching back to the one you left this year because their usage has decline to where their premiums are now lower than others, specifically the one you switched to  - 

Medigap Go Around and Around and Around . . . 

[shamit]

Yes it is possible to be back to the one we are switching from.  The thing is we have a broker who helps us find the prices.  Not a lot of work for us.  It isn't much different than checking the Psrt D plans each year.  I do that one on my own. 

Why should I continue to pay over a $100 more a month on the chance their rates might be lower in a couple of years.  I will be able to switch then.

[GailL1]

@shamit or anybody else - Questions for you.

Should we all have the right to switch a Medigap plan to one that has lower premiums?  

What about switch to one that has higher benefits? (especially when we might need it)

Should we be able to buy a Medigap plan at ANY time?  IOW, continuous enrollment?

How much more in premiums would you pay for such access?

[JanetO299482]

I agree it's out of control. 4 yrs ago I paid $140 for UH plus $40 Atnea prescription. I haven't seen a doctor in years, don't take any prescriptions but my premium is now $275 plus $130. I was never told it will go up and up every year.

More people will be on Medicare sure but that also means more paying into the insurance cartels. 

When I got my letter of the increase I started thinking, Im afraid to live a long life. This is what we worked all our lives for? 

[GailL1]

@JanetO299482 

WHY are you paying so much especially for Part D if you don’t take any meds???  You do know that you can switch your Part D plan every year during Open Enrollment  (Oct 7 - December 15) - you switch based on your needs and since you have little need, you should just pick the lowest cost Part D plan - use to be zero $ but now since the IRA (Inflation Reduction Act) and the changes ti brought to the Medicare Prescription Drug program, there are few zero premiums plans anymore but still you could find one for a few bucks rather than $130 - that one sounds like an ENHANCED Part D plan and with taking no meds you certainly don’t need an Enhanced Part D plan. 

You may also live in a state where you can switch your Medigap plan without underwriting according to the states time table in their law.

If you want to give your state, I am sure someone here will either know or can look it up and give you the state’s reference if they have this type of law. (Birthday rule it is sometimes called).

[TRL1111]

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@GailL1 wrote:

since you have little need, you should just pick the lowest cost Part D plan - use to be zero $ but now since the IRA (Inflation Reduction Act) and the changes ti brought to the Medicare Prescription Drug program, there are few zero premiums plans anymore 

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I found $0 premium Part D plans for random states I checked:  Texas, California, Arizona, Colorado, Kansas, Illinois, Florida, Georgia, Virginia, Maryland, and Maine.  Maybe I just got lucky.

I also checked the New York City zip code I use, and as expected there aren't any $0 ones.  But there are three under $50.

Shopping for Part D plans is easy, and should be done every year.  Of course nobody can predict what drugs they'll be prescribed in the future, so it's a hideously imperfect system, but we shouldn't ignore the crumbs they give us.

[GailL1]

The beneficiary of any Part D plan can always file for an exception if they are prescribed something that is not on their formulary.  That isn’t hard and the doc usually handles it.  The exception is good while that plan last so then at OE they could look for another plan that includes it on the formulary.  

Yea, those zero premium plans just vary by insurer and by state if they are offered.  But one can usually find one that is still pretty cheap in monthly premiums. 

$  130 per month is a lot to pay for a plan especially if the need is not there for it.  

[TRL1111]

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@tomsteers wrote:

Can someone help me to understand how this new influx of income for UnitedHealthcare will help us?  TY!

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Insurance premium increases are driven by the amount of claims an insurance company has to pay out.  Especially with Medicare supplements, where UHC has no control or say over what it pays--if Medicare pays then UHC's supplement pays.

A homeowner's insurance company can deny a claim for roof replacement after a weather event, and that's a way for them to limit what they're paying out.  But Medicare supplements can't do that.

(Also, there's a separate forum for discussions about Medicare and insurance.)