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Community Rated vs Attained Age Rated Supplement Policies

I am covered now by an Attained Age supplement (Mutual of Omaha) in the State of Michigan.  AARP/UHC has accepted me for a policy to begin 1/1/2001 at an annual savings of about $450 to the existing policy.  While UHC is called community rated the presence of the discount for younger users may make it behave more like an attained age product, maybe even higher increases initially than an attained age product.  I am looking for a comment on that.  Also, I am concerned about negative customer service ratings for UHC as the experience with MOO has been good.  Also, I have read that AAPR is easier to get into, medically, than others.  Gets to the ease of moving back at some point if needed.

 

I did get off to a bad start with UHC.  They accepted my application, immediately debited my first months premium almost two months before the policy was to begin in violation of when they told me the debit was to begin.  I have disputed that charge with my bank.  It's hard for me to believe this was a mistake and this action causes me concern.

 

Thanks.

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Bronze Conversationalist

@PatriciaG692637 jumping in to offer general insight, not specific. Rating practices vary by state and carrier and there are "modified" rating schemes which can make it difficult to compare.

 

A true community rated plan charges the same rate for everyone with that particular plan, regardless of age or gender. For example, if someone wants the G plan a 65 year old female will pay the same rate as an 85 year old male.

 

In Georgia USAA uses a pure community rated model. They are a direct writer so I don't have a lot of history on them, but I do know they hit the market here a few years ago with very hot rates. They did not have a G plan at the time but their F had a lower premium than many G plans.

 

A bunch of folks jumped in the pool but it wasn't just the younger ones. Because USAA was also quite liberal in their underwriting they took on a lot of older, sicker people.

 

It didn't take long for that approach to blow up and now they have some of the highest rates in the state.

 

Some carriers use a modified community rating that incorporates 3 or 5 year age brackets. Age 65 - 69 get one rate, 70 to 74 another and so one.

 

I can't say which model UHC uses is Michigan, or if they have something different.

 

They are known for having more liberal underwriting than most carriers. Their tobacco rate, at least here, is a significant upcharge over preferred rates.

 

UHC has only had the G plan for 2 or maybe 3 years even though the plan has been around for 20 years or longer.

 

As a carrier they have never been competitive here until the rolled out the G plan. Their other plans are still priced in the middle of the pack. Makes me wonder if they will start raising G plan rates more than F, N, etc.

 

Going from memory, but I believe their 2021 G rates are increasing at a higher percentage than some of the other plans, like N. If that is the case their G rate competitiveness was fleeting.

 

They are big enough to do whatever they want with impunity.

 

It seems as if you are working without an agent. If so, you are really just guessing about making the right decision.

 

Personally I don't care for community rated plans. Very few carriers offer them. Most are attained age plans where allowed by the state DOI.

 

I also don't care for the Omaha group of companies. Depending on when you bought your plan, it most likely was with one of the Omaha subsidiaries, not the parent.

 

They have a history of introducing a carrier to a state, coming in with very competitive rates, then closing that block and introducing a new sister carrier to start the process over again. Meanwhile the carrier that was retired is a static block, getting older and sicker with each passing year. Healthy folks leave. Sick ones stay and that compounds the problem.

 

Without new business coming in the block starts to deteriorate rapidly.

 

You seem between a rock and a hard place without any good options.

 

If I read your post correctly the saving gained by moving to UHC includes swapping a plan with a non-tobacco rate for a new one with tobacco rates. That really makes me wonder if they messed up and will correct in the future.

 

As for collecting the initial premium on approval, that is common. More carriers are now giving applicants a choice of drafting on approval or effective date. Look at your application and see if they have an option to draft on the effective date. If so, whoever sold you that plan was either sloppy or did not know what they were doing.

 

If the application indicates a choice of drafting on approval or effective date, and the on approval block is checked, you have no one to blame. You got what you agreed to in the contract.

 

Again, because I am not familiar with your market, or the specifics of your case, I probably can't offer more insight.

 

Good luck!


Bark less. Wag more.
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Honored Social Butterfly

somarco or somebody else may be more able to help you with how premiums and discounts work - but I think you may have to give a bit more info.

1.  Are you changing plans as well as insurers or just changing insurers?  Purely for premium reduction? 

2.  Are you getting the (declining) discount with UHC?

3.  Are you being up-rated with UHC because of any pre-existing conditions cause I am assuming that you don't have guaranteed issue rights - Do you in Michigan cause some GI rights to switch maybe state specific?

Just want to see if this is an apples-to-apples comparison or not.

 

I have only "heard" that community rating is usually the lowest - but seems to me, that is gonna depend on the health and wellness of "the community" batch.  They may pull in a lot of new (usually healthier) enrollees since there is more publicizing with the AARP name (and royalties) - maybe.  Suppose to be an AARP member for one of these branded Medigap plans - but not for a Med. Adv. branded plan.

Medicare.gov - Cost of Medigap Policies 

 

Don't cancel your other policy until you know that you have the new policy in hand and you do want it - you should have a 30 day look see period course then you have to get your paid premiums back from the one that you decide you don't want.

Medicare.gov - Switching Medigap Policies 

 

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Unlike some who post here I know how to do an apples to apples comparison.  Plan G to Plan G.  Yes my discount  starts at 36% at age 69.  The only difference in the policies is that my existing rate is for a nonsmoker and the new quote is for a smoker.  That makes the UHC look even better.  No special rules for MI that I am aware of.  No uprating that I can see but that is not an impediment to a good comparison. I am happy with the current plan except for cost and the last premium increase of 22%.  I realize that UHC with the burnoff of the discount plus loss history will have some pretty steep increases as well but $450 for me and maybe $300 for my spouse adds up.  Thanks.

 

 

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Honored Social Butterfly

Boy - this is one that would keep me up at night - The smoking thing adds another cost to the UHC choice.  Sorry, I don't know if they can signal this out from year to year adding even more to the community rating increase.

 

I assume that you got the MOO Medigap plan when you were under the Medigap Initial Enrollment period and that is why there is no added premiums for smoking.

But now you are getting hit with the smoking additional prem. with the new plan. 

Under the new plan it would be considered a health condition; thus they can add more for this.  That's the way that I understand that Medigap works in most states.

 

Would you (and hubby) happen to qualify for the Michigan Medigap Subsidy 

NOTE:  The program will end when the funds are gone. We expect that to happen at the end of the 2022 or early in 2023.

We will not accept new applications after January 15, 2021.

Because the program will end, we will not accept new applications or missing proof of documents after January 15, 2021. This will help to make sure you receive your subsidy for the next two years.

 

I wish I could help you more - Good Luck with the decision.

 

 

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Thanks Gail.  I believe the smoking puts me in a different pool, one which will likely have higher increases over time.  Hadn't really thought of that, so thanks again.  Thanks again.

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