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Medicare Supplement Rate Increases

Medicare Supplement Rate increases have decreased from the fall of 2012 versus the fall 2011, as reported by CSG Actuarial.  Through their analysis the statistics show that the overall rates have fallen 20% over this time period for Medicare Supplement plans.  The main attribute given for the wide swing in Medigap rates comes down to the claims experience from the Medicare Supplement Insurance Companies.

Claims experience is referring to the amount of “expenses” that were incurred by the insurance companies on the Medicare beneficiaries they insure through Medicare Supplement policies.  Different plans tend to experience higher loss ratios (Guaranteed Issue Plans – A, B, C, F) and also plans with lower rates tend to experience higher claims from their Open Enrollment and Guaranteed Issue business. The main reason these plans and enrollment periods experience higher claims is that individuals are not required to answer health questions.  In turn, someone who was just diagnosed with cancer could get on with Mutual of Omaha without having to answer health questions which will hurt the loss ratios for that block of business.

Medicare Supplement plans are also seeing a larger growth rate than expected.  This is due to baby boomers entering the Medicare market at a pace of 11,000 people per day.  More carriers seem to be entering the market place so they can get a piece of this vast growing segment of the population.  By 2030, there is predicted to be 76 million people on Medicare.  Will the system be able to stay afloat by 2030 is another question for a different article.

Medicare Insurance Finders still recommends reviewing your policy every two – three years to ensure that you are not paying too much for your Medicare Supplement Policy.  These plans offer the same benefits no matter which insurance company you decide to go with but there are some factors that Medicare Insurance Finders can help you review to ensure you choose a plan and carrier that will benefit you over the course of time.

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