Why Individual Assurance Company left the Market according to IAC
Here is an excerpt from what IAC put out on this subject. “As the Medicare Supplement Insurance marketplace continues to change, IAC has made the decision to discontinue acceptance of applications for new Medicare Supplement Insurance policies effective December 31, 2020. This decision does not affect current and inforce IAC Medicare Supplement Insurance policies.” I will explain how it is likely to affect policy holders in a moment. But it continues,” Current policyholders will continue to receive the highest level of care in policy service and claims handling.”
Thrivent Financial’s Reasoning
Now here is what Thrivent Financial had to say about its decision to stop providing Medicare Supplements. I would like you to pay attention to the term commodity in the statement from Thrivent. ”Effective December 31, 2020, Thrivent has made the decision to no longer offer for sale any new Thrivent Medicare Supplement Insurance plans. The commodity nature of these products, Thrivent’s lack of scale, and the product’s regulatory framework prompt our decision to no longer offer Thrivent proprietary Medicare Supplement products.
All solicitation of this product must cease as of December 31, 2020, and all marketing materials must be removed from distribution and disabled from online viewing by December 31, 2020. While this change impacts agents currently appointed to sell the Thrivent Medicare Supplement product, there is absolutely no impact on existing business. Thrivent will continue to service all existing policies by providing the high level of service that policyholders and agents currently receive.”
Will Thrivent or Individual Assurance Company have Trouble Paying Claims in the Future?
I would like to give my opinion here. I believe that neither IAC nor Thrivent will have any financial problems maintaining their ability to service clients or pay claims in the future. However, what generally happens in these situations when a Medigap carrier stops accepting new business are rate increases on their existing customers. If a company stops accepting new business it is likely, and again this is my opinion that the company is either losing money or not making enough money to make it a good business decision.
Here Comes the Rate Increases
Now I’d like you to think like an insurance company here. If you are not making money or not enough money what would you do to fix that? Now in this case IAC and Thrivent are no longer accepting new applications which means they are not getting any new customers and they don’t want new customers. So the logic in my opinion tells me they are likely going to need to raise rates on their existing customers. If you have IAC, Thrivent, or other companies that have recently left the Medicare space. And by the way, I have made two other videos and blog posts about two other companies on this subject.
Look for a New Medicare Supplement Company
If you have IAC, Thrivent, or other companies, in my opinion, you should be looking for a new company for your Medicare Supplement. Now you might be saying. Well, I’ll just wait and see what the increase is and then I’ll make a decision. Now you may want to do that but, when you switch Medicare Supplement carriers you will likely need to answer health questions and pass the underwriting health process for the new company you apply to.
Why You should change ASAP
When a Medicare Supplement company decides to no longer accept new clients this does not generate what is called a guaranteed issue into a new plan or company. A guaranteed issue does happen when a company goes bankrupt, but I don’t see that happening to either of these companies or other companies that have left the market. In my opinion, if you have a company that is no longer accepting new customers for their Medicare Supplements then you should look to changing your company as soon as possible if your health is good because we never know when our health will change. Remember Medicare Supplements are standardized. Meaning the letter plan you have now had the same benefits as every company.
For example, if you have a Medicare Supplement Plan G with IAC, then a Plan G with a different company has the same exact benefits. The same goes for Medigap Plan N or Plan F or whatever letter plan Medicare Supplement plan you have. To illustrate this it is on page 13 of the official Medicare document, Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare. It states, “Different insurance companies may charge different premiums for the same exact policy. As you shop for a policy, be sure you’re comparing the same policy (for example, compare Plan A from one company with Plan A from another company).”
Isn’t price the only Difference?
So the only difference between the companies is price. Right? Well, that is true. Price is the easiest to see. Remember when Thrivent called this a commodity business. What I believe they are referring to is the fact that Medicare Supplements can’t differentiate themselves from other companies because the benefits are standardized. They are the same. You may hear the following statement or something similar, from new agents, or agents that might work in huge call centers that are under pressure from managers to make sales.
They may something to the effect of. The benefits are all the same so you should get the cheapest company. They will oftentimes try to get you to switch your Medicare Supplement carrier to only save a few dollars because “they are all the same.” The plans might be the same but the companies sure are not. Some companies have millions of clients which come with advantages and disadvantages.
How do companies Differ from one Another?
Some companies have only 1000s of clients and that has advantages and disadvantages as compared to the goliaths. Now while all the companies offer the same exact benefits there are some differences they can throw in to try and separate themselves apart and not be a commodity. Some companies offer vision and hearing insurance with their Medicare Supplement. Others offer discounts for dental procedures. Some offer free gym memberships, some offer over-the-counter pharmacy benefits.
They also all have different pricing and different reputations for rate increases. This is where the ability of an independent Medicare broker, like myself Chris Duncan, can be so valuable to you. We are able to objectively look at all of the companies’ prices, extra benefits if they offer any, their time in the Medicare Supplement market, their reputation for rate increases, and more. Picking a Medicare Supplement company is so much more than someone telling you, “well the benefits are all the same so you might as well get the lowest price”.
Price is Important, but there is so much More
I’m not saying the price isn’t important because I know it is. Almost all of my clients are on a fixed income and saving money is extremely important. Price shouldn’t be the only factor. When I present the different options oftentimes I will say the company I recommend is “X” amount of dollars. Let’s use $120 per month as an example. They are a name brand like Unitedhealthcare, Aetna, Humana, Cigna, Anthem, or Blue Cross. Those are our main companies and they have a stable business.
Usually, the company I recommend is not the lowest price available but sometimes it is. When that happens it’s kind of a double win. Usually, there is a company that has rates that might be 5, 10, 15, 20 dollars a month cheaper. Those companies usually don’t have the experience of some of the name-brand companies that I mentioned before. Those other companies might be new to the market. Maybe they don’t have as high of a financial rating. Or mostly we just don’t know how their rate increase history will be. So the inexperienced agent or the agent under pressure to make sales will say the easiest line to you to make their sale. “They are all the same so get the cheapest.”
Why do you Offer more than one high quality Medicare Supplement Company?
I get asked from time to time Chris why don’t you just pick one name brand to represent that is good and stable. If you have watched any of my videos or read my blog posts, you know I can help you no matter what state you are in. Alaska to Florida, Maine to California. Here’s what happens. If I just picked one stable good company I wouldn’t be giving you the best service. For example, UnitedHealthcare is the largest provider of Medicare Supplements in the United States. I recommend them every day in many parts of the country, but sometimes they are simply not competitive rate in other parts of the country. When I check the rates for a particular plan in one area of the country they might be the lowest rate of the companies available that I consider the best.
Many times in other parts of the country they might be 50 to 70 dollars more a month than another company I consider amongst the best companies. Maybe in a particular area, Unitedhealthcare is $140 per month and Aetna is $160, Cigna is $150, Anthem is $180 and I would probably also find a company with less experience that is providing their plan for $120 a month. But which one would you like to pick? The company that is the cheapest or one of the companies that have extensive experience in the Medicare space. In this instance, I would probably recommend Unitedhealthcare. But in another part of the country Cigna might be $140, Unitedhealthcare might be $190, Aetna $170, Anthem $160. In this instance, I would probably recommend Cigna.
Shop for a New Medicare Supplement company with Me
If your Medicare Supplement company has left the market recently or maybe a while back and you would like to shop the rates and extra benefits of the best companies for Medigap plans I would love to help you. Or maybe you have had some rate increases with your Medicare Supplement and would like to know if you could save some money on your Medicare Supplement premium. Again I would love to help.
About The Author — Christopher Duncan
I’m Chris Duncan, owner of Trusted Benefits Direct. As your Medicare advisor, I want you to know that my business offers superior solutions for everyone. I do not work for insurance companies, which allows me to serve you at a high level without any hidden agendas or conflicts of interest. All resources are provided at no cost because people must find peace of mind when looking ahead years down the line.
As an insurance agent, it’s my goal to make your life easier. That includes the process of securing all types of coverage for you and your loved ones, including Medicare Supplements, Medicare Advantage, Medicare Part D, Final Expense life insurance services, and retirement security plans. You can reach me toll-free at 800-910-3382 or get a free quote on MedicareRateQuote.com with just a few clicks! Don’t forget that I also offer contact forms if you would like more information from trustedbenefitsdirect.com – click here now!
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