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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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

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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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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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Re: UHC Medigap rate increase history

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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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