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Frequent Social Butterfly
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Re: UHC Medigap rate increase history

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Message 1 of 16

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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Re: UHC Medigap rate increase history

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Message 2 of 16

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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Re: UHC Medigap rate increase history

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Message 3 of 16

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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Re: UHC Medigap rate increase history

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Message 4 of 16

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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Re: UHC Medigap rate increase history

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Message 5 of 16
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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Re: UHC Medigap rate increase history

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Message 6 of 16

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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Re: UHC Medigap rate increase history

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Message 7 of 16
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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Re: UHC Medigap rate increase history

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Message 8 of 16

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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Re: UHC Medigap rate increase history

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Message 9 of 16
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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Re: UHC Medigap rate increase history

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Message 10 of 16

@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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