MEDIGAP PLANS [Medicare Supplemental Coverage]

[GailL1]

Do you keep up with the changes your state makes through legislation to Medigap plans [Medicare Supplemental plans].

These could affect you in certain situations 

• your ability to switch plans or insurers at a specified time during the year
• OR perhaps buy a Medigap policy if you are less than 65 years old and on Medicare.
• OR even if you have ALS or ESRD in some states.  

Your State’s legislators should know of these changes as well as your state’s dept of insurance.  Also the SHIP counselors in your state as well as the Medicare plan agents and brokers.

[jo85336578]

Thanks for posting. You've brought up a topic that needs thoughtful debate. I follow legislative discussion in North Carolina and so far, I know of no interest in passing legislation making it easier to get into a Medigap plan without medical underwriting - and that suits me just fine because such well-intentioned legislation would drive up premium prices for everyone by allowing unhealthy people to buy Medigap plans. 

[TRL1111]

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@jo85336578 wrote:

and that suits me just fine because such well-intentioned legislation would drive up premium prices for everyone by allowing unhealthy people to buy Medigap plans. 

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I assume you're talking about a birthday rule, which is what states are looking into and actually implementing these days.  Who are these unhealthy people you're talking about, and how would their using a birthday rule drive up premiums for everyone else?  

[jo85336578]

The Birthday rule allows people in one Medigap plan in those states that have the rule to purchase a different Medigap plan  at either the same or lower level without going through medical underwriting within the 60-day window. Without the Birthday rule, individuals who cannot pass medical underwriting  who want to leave their Medigap plan would not have the option of switching to a lower-level Medigap plan, leaving them to choose a Medicare Advantage plan or to rely completely on original Medicare.

[TRL1111]

Yes, I know how the birthday rule works.  I asked why you think unhealthy people using it would drive up premiums for everyone.

[jo85336578]

Sorry I didn't make that clear. With more unhealthy people able to join a given Medigap plan, the costs that the Medigap insurance company will incur should increase, thus increasing the medical loss ratios that insurance companies use to request / justify policy rate increases from state insurance commissions. I say this not as an insurance industry expert but only as a consumer forced to dwelve into policy pricing matters after seeing my regular G premium set to rise 35% on January 1, 2027. I'm still learning so please feel free to explain further. Thanks.

[TRL1111]

When unhealthy people leave a given plan, won't that plan's premium go down?  And won't healthy people also switch to a lower-cost plan, offsetting the unhealthy people that join a plan because it's cheaper?  All of these people, healthy and unhealthy, are already in the supplement market; the birthday rule just allows the population to shift around a bit among plans.  

Most, or even all, of the naysaying on birthday rules I've seen comes from insurance brokers.  They say premiums will go up, but so far I've seen no actual numbers.  And it's probably impossible to get reliable numbers because it's hard to control for every variable except the birthday rule, to determine exactly how much of a change in premiums is due solely to the birthday rule.

And it has not escaped my notice that brokers generally get paid a much lower commission on guaranteed-issue policies than underwritten policies.    

I think the birthday rule is a good thing, and it's an excellent thing for people who are stuck in a plan with a closed book.  Why should they be punished for choosing wrong when it came to getting a supplement, especially for something like a company's tendency to close the book--that's particularly arcane knowledge in a field where way too many people don't even know what "type" of Medicare they actually have, or that there's even a difference between original Medicare and Advantage.

AARP/UHC recently closed one of its books in Texas and UHC, unlike Mutual of Omaha for example, doesn't have a reputation for closing books, so it seemed like a safe choice even for people savvy about such things.  But...oops.  They closed their book on non-wellness-extras Plan Gs.  And Texas doesn't have a birthday rule, so those people who didn't see this coming because UHC hadn't done that before, are stuck if they can't pass underwriting.  

And there was no indication it was a bad choice when they chose that plan.  The plans without wellness extras were a little cheaper than the plans with wellness extras, and if you don't want the gym benefit, why pay more?  But now that those plans are no longer available to new people, and the population will never get any younger, they're probably not going to be cheaper a few years from now, especially when people who can pass underwriting start jumping ship.

That's a "gotcha" that the birthday rule addresses, and I'm 100% in favor of it.

[jo85336578]

I just took a quick look at the 16 states that have adopted the birthday rule (so far) and am not surprised that most of the states that have adopted it are progressive, consumer-friendly and Democratic. No surprise. Naturally the insurance companies lobby heavily against the legislation. I see this is an issue that could resonate with seniors who have either been trapped in a Medigap plan with soaring premium costs or hear of someone else in that situation. (I was interested that, in Kentucky, the Insurance Commissioner apparently bypassed the legislature to adopt the birthday rule!)  Unfortunately,  both houses of my state's legislature are heavily Republican thanks to computers selecting voters rather than voters selecting legislators! And no doubt with campaigns financed by insurance money. On the other hand, this might just be the issue that could turn out motivated voters in favor of consumer rights! What do you think the odds are of NC adopting the birthday rule?

[TRL1111]

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@jo85336578 wrote:

On the other hand, this might just be the issue that could turn out motivated voters in favor of consumer rights! 

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I wish.  Ignorance about Medicare runs deep.  I spent I don't know how much time in this forum correcting people who thought they couldn't change their supplement except during Medicare open enrollment at the end of each year.  Or thought they COULD change it during Medicare open enrollment.

I don't want to go crazy here, but you changed your mind on the birthday rule?  Your objection was that it would raise premiums for everyone (to which my initial reaction was, "Yeah!  Screw the unhealthy!").  What had led you to believe everyone's premiums would go up because of the enactment of a birthday rule?

But I'm curious what had led you to that belief.  I  

[jo85336578]

In my own case, with a 35% premium increase (from $200 to $270)  coming in my 2027 AARP/UHC Plan G, I began studying HDG which objectively makes sense for me, plus it has a BlueToBlue feature allowing me to switch back to their G (or any other of their plans) without medical underwriting. The only problem is that their Blue G plan premium is $404 per month (huge compared to the UHC $270). And now that I understand that the birthday rule would truly allow me to shop G plans every year, I just scanned G premiums from other companies and found rates of even less than $200 for Plan G which would change my choice of plans back to G rather than HDG (but only if I knew that I would be able to shop around each year). The birthday rule empowers the consumer to make a choice each year.

[jo85336578]

What had led you to believe everyone's premiums would go up because of the enactment of a birthday rule?

But I'm curious what had led you to that belief.  

I was under the impression that the birthday rule would always allow people to move from their current plan "letter" either up or down to a different "letter." After doing just a little research, I learned that, in most states with the birthday rule, the insured is limited to the same "letter" with some variations in other states. It is in a few states where the birthday rule allows switching from an HD-G to a G for instance that I would say could raise premiums for the G plan. I cannot prove it but I can imagine someone with an HD-G plan, upon getting a diagnosis of Parkinson's or other life-changing chronic conditions would want to switch to G (if upward mobility were permitted).

[jo85336578]

As I read your latest post, I made a mental list of all the things I learned about the birthday rule. I could compare myself to a law student sitting in Professor Kingsfield's class ("The Paper Chase") or a  playing poker against the Cincinnati Kid. After this class, I'm ready to call my state legisators to lobby for NC to adopt the birthday rule! Thanks for the education.

[GailL1]

Yep, just like my state - Georgia - 

Underwriting still gives them a chance to buy a Medigap plan if healthy OR pay a bit more if they have certain conditions and/or agree to a certain amount of time (3-6 months) where something that is pre-exisitng is not covered in that time period.  

[jo85336578]

I'm responding to my own latest post because I just noticed the AARP's new post about a (paraphrasing) new and improved discussion board.  I hope that it will be as open as this one has been, where people are free to speak their truth about insurance products as well as, the AARP.