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UHC Medigap rate increase history

On average how much has your medigap policy increased each year?  I am planning to use Plan G, but trying to decide who has lower increases overall.  The UHC community plan or an attained age plan such as Aetna or Cigna.  It looks like with UHC I'll get a 3% increase each year because of the initial enrollment discount  plus an inflation or any type of increase  each year?  

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hopefully someone can help here:  going into my 3rd year with an AARP/UHC plan "F".  Yesterday, I received my letter relative to rate information for 2020.  Included were 2 increases in premium: One is effective January 1, and the second is effective April 1, (birthday month).  Can anyone help me understand this - before I starrt making the necessary phone calls tomorrow? 

Thanks

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I would assume that one is the loss of the discount rate and the other is an increase due to inflation and/or other factors. The April increase should be the change in the discount rate.
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The table below demonstrates my understanding of how the unwinding of the 36% discount works for a typical 65 year old male living in Virginia.  For year 1, a 36% discount is applied to the Plan G base price of $177.75 per month.  The actual monthly premium is therefore $113.76.  For a number of possible reasons (e.g., inflation, etc.) assume Plan G's base price goes up by 4.78% in year 2 to $186.25.  Also in year 2, the discount is reduced by 3 percentage points from 36% to 33%.  As a result, the Plan G actual premium for year 2 is calculated by applying the reduced 33% discount to the higher $186.25 base premium, which comes to $124.79 per month.  So, bottom line, the actual monthly Plan G premium increases by 9.69%, from $113.76 in year 1 to $124.79 in year 2.  This approach is repeated every year until the original 36% discount is fully crawled back.  

Plan G price inc.png

 

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Excellent explanation. I would add that the increase in the full rate is because of costs, rather than inflation.

 

Also added to the 2nd yr premium is the addition of the enrollment discount that applied to 1st year only. Also added to the 2nd yr premium is increase for inflation.

 

My increase from 1st year in 2019 to the 2020 2nd year is close to 10% increase. Plan F (contrary to expected heavier rate increases for Plan F than G) had a rate increase that was less. 

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So basically 10% minus the 3% Discount Reeduction = 7% of Medical Inflation Price Increase

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@Guillermin1 a bit more complicated than that. In addition to compounding the first year marketing discount the unpredictable part is health care inflation (an educated guess) plus utilization based on prior years claim trends.


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My increase for plan G from 1st year in 2019 to the 2020 2nd year is about 8.5% - 3% discount decrease plus about 5.5% the 'real' increase. 

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@k298534c it's actually a bit more than 8.5%.

 

The first year "discount" is compounded each year along with the trend increase.

 

If your current rate is $100, multiply that by 3% which puts you at $103. Then multiply that number by 5.5%. Your final rate is $108.67.

 

This compounds every year for as long as you have your policy.

 

And, other than the first year discount, this compounding applies to all carriers. Future increases are not calculated as a percent of initial premiums. They are applied to the current year premiums.

 

If those percentages are duplicated next year, your starting rate is $108.67 x 1.03 = $119.94 x 1.055 = $118.08.


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I bought Plan G UNH-AARP last year upon entering Medicare for the first time. One of the selling points was that they expect Plan F to have bigger premium hikes over time, as the people who have F age & get sicker. However, I got a notice for the increase of my Plan G for next year. It's about 10-11%.  I was pretty shocked.  First, there's the 3% loss of 1st yr discount off the full rate (this is 3% of the full rate,not 3% increase of the existing premiu).Second, there was an inflation rate added.  Third, there had been an enrollment discount, so that went away. Fourth, the full rate premium was increased. (By contrast, my brother, who bought Plan F 2 years ago in same town, got a 4% increase. That was the 3% loss of discount off full rate + inflation.  So, Plan F didn't have a full rate increase at all. So much for "Plan F will probably have bigger rate increases.")

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Two questions. I thought the enrollment discount and 1st-year discount was the same thing. I didn't see two discounts for the first year. Second what state are you in?
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There is an "enrollment discount" for 1st yr.  Then there is a "discount" every year for about 13 yrs. So a reference to the discount for 1st yr could be a reference to the latter.  Although that discount is a little less every year, w/the largest being the 1st year.

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If anyone thinks they can predict future increases they should buy lottery tickets.

 

Looking at the past to predict the future is a fools game, regardless of the carrier.

 

Discounted rates (with any carrier) is a marketing ploy to capture new business. I don't know any other carrier that discounts first year rates more than 10% . . . except for the one mentioned in this thread.

 

There is only ONE discount and that comes in the first year. Future increases attributed to the first year discount reflect an amortization of the initial sales discount. It's not a new discount.

 

The annual increase that amortizes the first year discount is applied to current rates, not your initial rate. In effect the amortized discount compounds over the time frame of 10 years or whatever is used in your particular state.

 

In most states the policyholder will be awarded two increases per year. One adds back in the first year discount; the 2nd increase is for age (in attained age states), inflation and utilization.


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I have been hunting for rate increase history.  I found that the AARP Medicare Supplement FIND A PLAN page has this link in the bottom footnotes:

 

http://uhcmedsupstats.com/

 

The second set of links on the resulting Stats page open documents with the rate increase numbers.  You need to select your State in the upper right corner to access the documents.

 

Numbers from these documents show the following National average annual rate increase for various time periods:

4.0% for 2008-2012

3.6% for 2010-2014

2.9% for 2011-2015

2.6% for 2012-2016

 

The documents also include rate increase numbers for each State so you can check the history for your particular State.  These numbers do not include the 3% annual increase for the decreasing initial enrollment discount.

 

The last set of links on the Stats page provide Market Share numbers.  It was interesting to find that the AARP Supplement Plans cover more than 3.6 times as many people as the next biggest insurer.

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The problem with averages is no one is average . . . unless they live in Lake Woebegone.

 

Truth is, no matter which carrier and plan you choose there is really no way to predict where rates will go in the future. Local regs for new and renewal rates vary widely by state. Some require prior DOI approval, others do not.

 

Then there are guaranteed issue rules, birthday rules, anniversary rules, requiring carriers to issue plans under age 65. All of these things complicate your analysis.

 

Ultimately renewal rates are driven by loss ratio's and tempered by market forces.

 

The only truth you can say about predicting future rates is . . . it depends.


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you should speak with a broker who works with many different companies in your area, have you tried that?

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@CarolC585396 wrote:

On average how much has your medigap policy increased each year?  I am planning to use Plan G, but trying to decide who has lower increases overall.  The UHC community plan or an attained age plan such as Aetna or Cigna.  It looks like with UHC I'll get a 3% increase each year because of the initial enrollment discount  plus an inflation or any type of increase  each year?  


How much they might increase year over year is a hard comparison to make because it depends on how they are priced to begin with and what state you are in and the rules they put into play - meaning some states require that a Medigap policy be sold to people who are younger than 65 years old - this would include those who are on SSDI for over (2) years; other states say that their Medigap policies are only available to those Medicare beneficiaries who have reached the age of 65.  

 

Sorry, I don't have one so I cannot answer your question directly.  I wonder if your state's Dept of Insurance might have this historical perspective since they are the ones that regulate the plans.

 

Seems it is also a call on what you think health care inflation might do, if that has bases on the pricing method - from current forecasters, it is now on the rise again after leveling off somewhat during the recession years.

 

An old Kiplinger article says:

https://www.kiplinger.com/article/retirement/T039-C001-S001-comparing-medigap-policy-costs.html

Attained-age policies increase the premiums as the insured ages; issue-age and community-rated policies do not (both can raise rates due to health-care inflation). It's generally best to buy the lowest-priced issue-age or community-rated policy, which may cost a little more in the beginning (but often does not) but usually doesn't raise rates as high through time. 

 

You are wise to determine how the policy is priced because it does make a difference.

 

Medicare.gov -'Cost of Medigap Policies - Chart of Pricing Methods

Note the other things that affect policy cost at the bottom of the page.

Medicare.gov - Cost of Medigap Policies

 

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You say that the Kiplinger article says: Attained-age policies increase the premiums as the insured ages; issue-age and community-rated policies do not (both can raise rates due to health-care inflation). It's generally best to buy the lowest-priced issue-age or community-rated policy, which may cost a little more in the beginning (but often does not) but usually doesn't raise rates as high through time. 

 

I bought Plan G AARP/UHC last year at age 65, community rated. The increases I got this year amt to about 9.7%: loss of enrollment discount, loss of the 3% discount off "full rate" premium, maybe inflation, and it raised the full rate premium. 

 

Think about it: I got a 3% discount off the full rate premium last year, so not a 3% discount off the new full rate premium. So that full rate will not be 36% discounted fully. And being able to just raise the full rate premium because of costs, negates the argument that it only raises it for loss of discounts & for inflation. All ins. cos. raise rates if costs warrant it, in their opinion. 

 

It would be good to know the history of Plan G and other plan premium raises. It's informative when you compare raises of one plan against another, and one company against another. There is SOME info out there, but I haven't finishd reviewing it enough to post it here. I'm checking on Plan N vs Plan G currently.

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@db8815 Medigap plan N is not a "popular" plan. Most recent figures for plan N sales (2018) show 11% of all Medigap plans sold that year were the N plan.

 

Plan F still the runaway favorite with 54% of sales followed by Plan G with 19%.

 

Other plans are in single digits.

 

Plan F does not offer monetary value but remains popular among consumers that do not take the time to learn about the different plans.

 

As mentioned before, past rate increase comparisons are not predictive of future adjustments.

 

Plan F will not be offered to those new to Medicare as of 1/1/2020. It will all but disappear from the landscape to those who qualify under GI rules. Plan G will become the "go to" plan for GI. Eventually that will most likely impact future G rates but probably not much effect for a few more years.

 

 


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We just signed up and will start in Jan 2020.

While I recognize that the Enrollment Discount is a teaser rate with a built-in increase the appeal was the gym membership on the supplement plans starting in 2020. Humana also offered a fitness benefit and their enrollment discount started at 39%.

Rates are going to go up no matter which company you go with.

What surprised me in shopping was the variation in rates depending on which agent quoted AARP UHC and in the end, they can't confirm what the actual final rate will be or, at least, that is what we were told. At this point, we still don't know if the quoted rate will hold.

I'm assuming if the rate doesn't hold we can reject the policy and start over.
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