Trend Alert: High Medicare Supplement Rate Increases Coming
Trend Alert: High Medicare Supplement Rate Increases Coming
Written by Rachel Brammeier
The Medicare Supplement Loss Ratios
In 2020, Medicare Supplement carriers saw the lowest claims year they had seen in over a decade, the lowest around 72% market claims loss ratio. This was due to people staying home and not going to the doctor’s office. However, this meant that new health conditions remained unfound and upcoming claims loomed. In addition, medical inflation continues to be on the rise. Carriers predicted an increase in claims when people trekked back to the doctor’s office in 2022, but hoped that it would level off by 2023. What is happening is that claims still continue to rise. According to CSG, in 2023, the Medicare Supplement overall market loss ratio spiked to almost 84% as premiums struggled to keep pace with the claim utilization rates.
What does this mean?
Expect double-digit rate increases from Medicare Supplement carriers in 2024. It is important to prepare clients to see higher than normal premium hikes, but also to share additional options to help them manage their finances.
Options for Clients
Medicare Supplement
- Change to a new carrier with underwriting. It’s important to think through jumping to another Medicare Supplement if the one they are currently using experiences an increase. There’s no guarantee that the carrier you move them to won’t also experience an increase. Click here to go to our Quote Engine!
- Note: If you live in an issue age state, you will be starting that client over at a new higher issue age by underwriting or using a birthday or anniversary rule to move that client.
Underwrite into a Plan N. Plan N offers some premium relief with minimal additional out of pocket expenses. Plan N historically has lower rate increases since it is not a guaranteed issue plan. It’s important to verify that the doctors they use accept assignments. The main doctors that don’t typically are in mental health or specialize in a specific type of care. However, 97% of doctors do accept assignments. Check out our blog on Plan N – Why You NEED to Offer It, or view our Plan N Codes document!
UHC Plan Toggle: If the client is with UnitedHealthcare, there is a form to toggle to a Plan N without underwriting. This begins at the beginning of the following month. This will keep you as an agent of record, and will not start you over at year 1 with commissions. You will continue the renewal year of the initial enrollment for commission payments.
Use the State Birthday or Anniversary Rules. Become comfortable with your states Birthday and Anniversary Rules, if they have them. View your state’s rules here! This will allow you to move a client to another carrier without underwriting.
Medicare Advantage
Consider a Medicare Advantage Plan. Talk through the pros and cons of a Medicare Advantage Plan. If moving to a MA plan is the direction that your client wishes to go, then you can move them during AEP or an SEP if they qualify for one.
- Reminder: If your client has never been on a MA carrier, make sure to address the 1-year trial right. A client can move back into the exact same plan or carrier they had prior without underwriting. If you are in an issue aged state, you will be rewriting them at their current age and the premium may look higher than they remember. Their Part D has a 1-time trial right SEP election in that timeframe as well. Click here to access Election Period Assistance!
Advanced Communication to Clients
It’s important to let your clients know that they should be expecting higher than normal rate increases in advance. Encourage them to reach out to you if they have questions, concerns, or would like to reevaluate their insurance choices.
When there is change, there is opportunity. Use this as a chance to catch up with your clients and find out what healthcare concerns they may have since you last met with them. This is an excellent opportunity to talk through out-of-pocket risks and fill them with additional product lines; such as cancer, home healthcare, or dental coverage.
Have Questions? Call us today at (800) 689-2800 or send us an email at contact@smsteam.net!
All contracted Agents receive FREE access to SMS-University, the industry’s most trusted, comprehensive online training platform, featuring numerous training modules, white-papers, and clear, concise education tools.
Sources:
Recent Posts
