Allstate Cutting Med Supps Commissions Effective 6/1/25

[annon123]

The number of eligible medicare people should also start to decline, relative to the baby boomer generation spike. This will leave carriers and agents fighting for a piece of a smaller pie.

And the plans with the companies' customer pool will be more heavily weighted with older, thus likely more expensive clients. While depending on the risk pool type younger people premiums may not be affected, however overall for the insurance company they will have more claims due to older age related issues and likely more expensive claims to deal with.
I'd suspect community risk pools are going to go to bigger and bigger discounts for the younger people in the pool because otherwise they won't be competitive to t65 since the larger group of much older seniors will drive the community risk pool costs up more with fewer younger people in the baby bust generation.

 

[GoPokes]

I spoke with an Allstate Rep again. She says there are/were 5 states where the loss ratios are the highest, and these are where they initially made the cut in plan g commissions (and raised premiums).

After that announcement, they learned that several other carriers in those states were exiting the market, so Allstate (nat gen), was worried they would continue to get the unhealthy business. So they just closed up shop.

She says they are still getting quite a bit of paper apps. I really don't want to mess with paper apps, and Docusign. But I do have about 10 people I was going to submit with Allstate for 6/1 effective.


Seems like for a company to be priced competitively on plan n AND plan g is not really working well. It appears the plan G is certainly catching more of the unhealthy people than plan N, sort of like how Plan F was.

You guys remember last year when we were talking about how UHC was rolling out the HDG in FL? Im guessing they say this scenario playing out.

 

[somarco]

insurance company they will have more claims due to older age related issues

More claims, yes, but MA carriers, with the ability to subjectively deny claims, may not be impacted to the same degree as Medigap carriers.

Medigap carriers can wash, rinse & repeat by closing a block and introducing a new issuing carrier. This eventually creates a death spiral for the closed block.

 

[somarco]

5 states where the loss ratios are the highest, and these are where they initially made the cut in plan g commissions (and raised premiums).

G plans are not inherently evil. How the plan is priced + commission (and bonus) decides whether or not the block will be profitable.

Plan G has existed since (I think) the mid 90's. I got in the Medicare business and probably 90% of my clients bought the G while almost every other carrier and agent was heavily pushing G.

The premium spread for G vs F was $20+. My pitch was essentially "Do you want to pay an extra $20/month, $240 per year, to cover a $155 deductible?".

G wasn't underpriced, but F was overpriced.

It stayed that way until 2020 when F was outlawed for new T65's.

As long as big companies heavily promoted F they bankrolled enough money to make both the F & G profitable. Once they could no longer sell F things changed.

UHC was probably the last big carrier to start promoting G but they were not competitive, at least not in Georgia.

In 2020 G rates for a T65 male were in the $130 - $150 range for the larger carriers. Today they are $160 - $180 for that same group of carriers.

Georgia is an entry age state which probably pushes our starting rates higher than other states with an attained age rate basis.

Several carriers are on the high side . . . Humana is $188, AARP is $192, Continental (Aetna) is $199, AFLAC $201, MOO is $233 and Cigna is $255.

Several carriers are playing games with discounts for roommates in an attempt to maintain market share.

One thing I have noticed in the last few years is how challenging it can be to get an underwritten app approved. Big carriers are rejecting more apps while the smaller players are playing loose and approving almost anyone who can fog a mirror.

If a carrier can keep a T65 G rate in the hunt, hold renewals to 10% or less and avoid going crazy on underwritten business they should be able to survive.

 

[MedicareWAA]

More claims, yes, but MA carriers, with the ability to subjectively deny claims, may not be impacted to the same degree as Medigap carriers.

They can manage fraud, waste, and abuse (to some extent) and they're paid on a risk-adjusted basis.

 

[annon123]

More claims, yes, but MA carriers, with the ability to subjectively deny claims, may not be impacted to the same degree as Medigap carriers.

Medigap carriers can wash, rinse & repeat by closing a block and introducing a new issuing carrier. This eventually creates a death spiral for the closed block.

I am a little confused about how community risk pool plans (like UHC in supps my state) would/could have more than one community risk pool plan in the same market area though and thus have a block to close. UHC has added some plans without the "extras" and is using a different subsidiary to offer them, but that's really not quite the same thing. As they also increased the number of years one can have a discount for more recent sign ups (which would increase the premiums for those who are older with no discount), it seems to me that is how they are dealing with the issues that cause other companies to close a block. Or am I missing something?

 

[somarco]

Merely a WAG since community rating only exists in a few states according to Google AI.

Nine states currently require insurance providers to offer community-rated Medigap plans: Arkansas, Connecticut, Massachusetts, Maine, Minnesota, New York, Vermont, Washington, and Idaho. In these states, everyone who enrolls in the same Medigap plan pays the same premium, regardless of their age or health status

The wording seems to indicate ONLY community rating is allowed as opposed to an option.

USAA offered community rated plans in Georgia a few years back and lost their shirt. They switched to entry age like the rest of the carriers but are still not competitive. AFAIK, community rated is still allowed but I can't think of anyone that uses it.

Barring an entirely new policy series, I have no idea how community rated plans would close one block and replace it with a new one.

States that allow entry age, and/or attained age plans close blocks by withdrawing carrier A from a state and replace it with another subsidiary (carrier B) and move on.

If the issuing carrier in a community rated state has a "sister" company I suppose they could swap out to create a new risk pool.