New AARP Medigap Stuff Indicates Possible Change

[Ronnie Carter]

I met with the western regional sales manager for med supps last week. Plan G is to be available as of July 1 with applications taken April 1.

He told me the pricing would be Plan F minus the Part B deductible cost. I then asked why that would be advantageous since the net price would really be no different than Plan F. Apparently he never thought about this.

Rick

That would be the height of silliness, to price G that way. The only way a beneficiary would save anything is if they never hit the deductible -- unlikely with anybody in my book, that's for sure.

 

[GreenSky]

That would be the height of silliness, to price G that way. The only way a beneficiary would save anything is if they never hit the deductible -- unlikely with anybody in my book, that's for sure.

Actually, he said it would be priced 6% lower than Plan F. So if the average cost of Plan F is $200 a month, the "discount" is less than the $183 Part B deductible.

But I'm sure they'll twist it to say it's worthwhile because they're UHC and the largest, etc.

Rick

 

[MBSC]

FWIW, the NC DOI website displays $155.22 for AARP/UHC Plan F for a 65 yr old NS male. The effective date is 1/1/2017 when you click on the company name for details. $117.28 for plan G with effective date 7/1/2017.

Link: NCDOI | Medicare Supplement Premium Comparison Database

 

[LostDollar]

He told me the pricing would be Plan F minus the Part B deductible cost. I then asked why that would be advantageous

advantageous to UHC because it allows them to get the "new" plan operational and iron out administrative details, with no cost of business penalty, prior to deadlines.

In 2021 or 2022, with internal ability to change plans without health questions, they could raise prices on F, drop prices on G, suck all the F business to G and then close down plan F, offering only plan G. Then they would still be in the business of offering the "BEST" plan available to open enrollment and they would not have to split actuarial and administrative support between two popular plans.

 

[GreenSky]

advantageous to UHC because it allows them to get the "new" plan operational and iron out administrative details, with no cost of business penalty, prior to deadlines.

In 2021 or 2022, with internal ability to change plans without health questions, they could raise prices on F, drop prices on G, suck all the F business to G and then close down plan F, offering only plan G. Then they would still be in the business of offering the "BEST" plan available to open enrollment and they would not have to split actuarial and administrative support between two popular plans.

I understand the words you wrote but they really don't make much sense to me. Why would they want to close down Plan F if the prices are raised? And since Plan J never got shut down why do you think they'd shut down Plan F?

Rick

 

[LostDollar]

I understand the words you wrote but they really don't make much sense to me. Why would they want to close down Plan F if the prices are raised? And since Plan J never got shut down why do you think they'd shut down Plan F?

Rick

In terms of managing costs, it seems to me that a company would do better to have to support one product line rather than two. It also seems like just one of the two would continue to support the "exclusiveness" of products UHC carries in relation to the market as a whole.

It sounds to me like AARP/UHC has the marketing system and marketing approach to make that happen if they want to. Pricing could be used to encourage the behavior they want. (And what goes down can go back up.)

Admittedly, I know nothing about the health insurance industry, so maybe concepts of reducing overlapping product lines and eliminating duplicate cost structures (to the extent allowed by legal requirements for the industry) are not of concern there.

(Re plan J-as a non agent I have no way to obtain any info about its presence and cost and have been chastized or ignored for asking-so for me right now plan J is a non-entity.)

 

[GreenSky]

In terms of managing costs, it seems to me that a company would do better to have to support one product line rather than two. It also seems like just one of the two would continue to support the "exclusiveness" of products UHC carries in relation to the market as a whole.

It sounds to me like AARP/UHC has the marketing system and marketing approach to make that happen if they want to. Pricing could be used to encourage the behavior they want. (And what goes down can go back up.)

Admittedly, I know nothing about the health insurance industry, so maybe concepts of reducing overlapping product lines and eliminating duplicate cost structures (to the extent allowed by legal requirements for the industry) are not of concern there.

(Re plan J-as a non agent I have no way to obtain any info about its presence and cost and have been chastized or ignored for asking-so for me right now plan J is a non-entity.)

I realize you don't have a license and apparently lots of time to spend on this, but you really do overthink almost everything.

All companies LOVE Plan F. They get to charge $300+ just for paying the deductible and have snowed people (and most agents) into believing it's the best plan. UHC does what they want because "we're the biggest so we're the best."

Please get your license so you can learn what really matters to most clients and how most agents will fit into the "***" category.

Rick

 

[G.Gordon]

AARP is the largest and most cash flush medigap carrier on the street. My prediction is a position between N and F. In MO N is so much cheaper than F I rarely have a client stay on F, but get issued and then call and move to N at a much lower rates (MO annual GI cases). For example N at t65 is 122 and F is 180, that is a huge difference for what little difference there is. I'd see a G around 150-160. Too low and they take away plan N's flow and too close to F and it won't make sense.

 

[LostDollar]

Actually, he said it would be priced 6% lower than Plan F. So if the average cost of Plan F is $200 a month, the "discount" is less than the $183 Part B deductible.

But I'm sure they'll twist it to say it's worthwhile because they're UHC and the largest, etc.

Rick

AARP is the largest and most cash flush medigap carrier on the street.

From the peanut gallery :

When I look at these two comments and add to that that AARP has not offered Plan G up until now, I would lean more towards Rick's thought, THE TWIST and figure you'll get $170. Gives AARP just enough business in that plan to test all their systems and be ready for what they want to do in the market closer to the 2020 date.

 

[G.Gordon]

AARP had a plan G in almost every market up to the modernization of Medigap in 2010. I still run into E's and J's here.