Me thinks AllState is pulling out of the Supp Market

[Packerland]

Medicare Supplements are in a bit of a freefall right now...I think it's the result of several factors converging all at once.

First, you've got the post-COVID pent-up demand. People delayed procedures, and now claims are pouring in—this isn't just hitting MA 's it's hammering the supplement carriers too. They simply weren't pricing for the volume of utilization we're now seeing.

Second, I think a lot of carriers underestimated the long-term cost of Medicare claims. Many entered the market in the last 10–20 years trying to buy market share, often pricing aggressively and assuming they'd ride healthier pools of business. But the reality is catching up.

Look at Allstate's numbers over 100% loss ratio... it's not just them. In my state, we have maybe three supplement carriers operating below an 85% loss ratio. Most are well north of 95%.


Part of the problem, in my opinion, is how agents are the market. Many of us who offer both MA and supplements steer the healthier folks toward Advantage plans (often for good reason), while those with chronic conditions or higher expected utilization get put into supplements. That skews the risk pool and makes it harder and harder for these carriers to maintain margins or offer competitive rates.

We are looking at a significant reset in this space. Whether that comes in the form of big price hikes, plan exits, or stricter underwriting remains to be seen—but the current path is not sustainable.

Curious if others are seeing the same trends in your states

 

[Medicare bro]

One interesting thing about CSG is that you can put the effective date to the past.

Today:
My zip code: 28445
65
Male
G
Lowest 2 + some big names:

• $104.12 - Medmutual Protect
• $132.75 - Blue Cross And Blue Shield Of North Carolina
• $138.78 - Aetna Health Insurance Company
• $140.67 - AARP Medicare Supplement Insurance Plans, Insured By United Healthcare Insurance Company Of America
• $111.40 - Bankers Fidelity, Underwritten By Atlantic Capital Life Assurance Company

Left out the "innovative" one at 104.96

5/15/2015:
My zip code: 28445
65
Male
G
Lowest 2 + some big names:

• $107.40 - Mutual Of Omaha Insurance Company
• $108.25 - CSI Life Insurance Company
• $112.51 - Humana Insurance Company
• $119.45 - Aetna Health And Life Insurance Company
• $129.00 - Blue Cross And Blue Shield Of North Carolina

So in 10 years it really hasn't changed too much. Crazy.

Yep, in fact I can say many times I've helped someone 5 years in get a lower rate than when they first signed up.

 

[johnny42]

What about the Dental? Are they pulling out of the dental?

 

[somarco]

@sshafran I used CSG to look back. Found out about that feature from a post on the forum.

Georgia is an entry age state so IEP rates here may have changed more (or less) than what happens in attained age states.

My target market is incomes $50k and higher + home value of $250k+. I get very little premium pushback from prospects and existing renewal clients. I can't think of anyone who qualifies for Extra Help or other subsidies so my client base may be different from others who zero in on MA for the low (no) premium and extras.

In this entry age state it is rare to find a lower rate for healthy folks age 70 and up vs their renewal rate.

 

[sshafran]

@sshafran I used CSG to look back. Found out about that feature from a post on the forum.

Georgia is an entry age state so IEP rates here may have changed more (or less) than what happens in attained age states.

My target market is incomes $50k and higher + home value of $250k+. I get very little premium pushback from prospects and existing renewal clients. I can't think of anyone who qualifies for Extra Help or other subsidies so my client base may be different from others who zero in on MA for the low (no) premium and extras.

In this entry age state it is rare to find a lower rate for healthy folks age 70 and up vs their renewal rate.

Sorry, I know I had quoted your post, I was replying more generally. Georgia is different. Not as crazy as Florida...

 

[somarco]

Sorry, I know I had quoted your post, I was replying more generally.

No worries . . .

 

[Dave G]

In response to Medicare bro:

Medicare Supplement rates have remained the same the last 15 years?? What about renewal rates on your book? What about all those regular notices from carriers? In my market they've been increasing 5%- 8% a year on new business for some time now. It's commonplace to find someone whose Plan F rates have doubled since buying their policy 8-10 years ago. Plan G rates for most carriers I work with have been running 5-8% annual increases on new business. Plan N rates weren't going up as much previously, but even those are "catching up." Even High-Deductible rates, which have barely budged are also increasing.

In my home state of Maryland the legislature created the "birthday rule" last year allowing you to shop plans with Guaranteed Issue status within 30-days of your DOB. It puts pressure on rates, for sure (some estimate in the 17% range) but it's a godsend for anyone stuck with high rates because they can't pass underwriting. Some carriers modified comp to reduce Open Enrollment and increased comp on GI cases to be the same. This didn't last long.....they soon returned to minimum comp of 2% for GI business. Now....new legislation effective this Oct. 1 requires carriers in MD to pay the same comp on "birthday rule" cases as paid for Open Enrollment I haven't seen the new comp schedules yet but expect to see comp drop from 22% to 15% - 17% at least initially on new business.

Even with this change it's good thing for two reasons: It removes conflict of interest as I no longer have to decide between helping clients or decimating my renewal stream. And with a mature book, I can stay busy re-writing a batch of existing clients each month....and for the oldest cases earn more then the current renewal comp.

 

[Medicare bro]

In response to Medicare bro:

Medicare Supplement rates have remained the same the last 15 years?? What about renewal rates on your book? What about all those regular notices from carriers? In my market they've been increasing 5%- 8% a year on new business for some time now. It's commonplace to find someone whose Plan F rates have doubled since buying their policy 8-10 years ago. Plan G rates for most carriers I work with have been running 5-8% annual increases on new business. Plan N rates weren't going up as much previously, but even those are "catching up." Even High-Deductible rates, which have barely budged are also increasing.

In my home state of Maryland the legislature created the "birthday rule" last year allowing you to shop plans with Guaranteed Issue status within 30-days of your DOB. It puts pressure on rates, for sure (some estimate in the 17% range) but it's a godsend for anyone stuck with high rates because they can't pass underwriting. Some carriers modified comp to reduce Open Enrollment and increased comp on GI cases to be the same. This didn't last long.....they soon returned to minimum comp of 2% for GI business. Now....new legislation effective this Oct. 1 requires carriers in MD to pay the same comp on "birthday rule" cases as paid for Open Enrollment I haven't seen the new comp schedules yet but expect to see comp drop from 22% to 15% - 17% at least initially on new business.

Even with this change it's good thing for two reasons: It removes conflict of interest as I no longer have to decide between helping clients or decimating my renewal stream. And with a mature book, I can stay busy re-writing a batch of existing clients each month....and for the oldest cases earn more then the current renewal comp.

I don't work in Maryland so it might be different. The states I work in the Intial premium has stayed consistent.

 

[kak6407]

I don't work in Maryland so it might be different. The states I work in the Intial premium has stayed consistent.

For those interested, here is a chart of Plan G and Plan N for lowest priced plan in North Carolina I put together yesterday. As you can see there isn't much of a change on G.

Since MACRA in 2020 you can see a slight shift in G. I forsee that Bankers Fidelity likely taking a big bump at their next renewal so I do think we see more of a shift. The biggest difference is the spread change in G and N since MACRA.

 

[Medicare bro]

For those interested, here is a chart of Plan G and Plan N for lowest priced plan in North Carolina I put together yesterday. As you can see there isn't much of a change on G.

Since MACRA in 2020 you can see a slight shift in G. I forsee that Bankers Fidelity likely taking a big bump at their next renewal so I do think we see more of a shift. The biggest difference is the spread change in G and N since MACRA.

View attachment 18352

This is the problem, and is precisely why supp companies are in this mess. The market needs to be set from the get go at a higher price. Med sup people will always pay the higher price.