Insurance Company Forming New Pool to Reduce Premiums. Is This Legit?

[Leslie]

I'm 74 and have a Medigap policy #G. An agent for my company called and came for a visit. He claims
that the company is forming a new pool, and moving its healthy members on this plan into it, thus reducing our
premiums. My monthly premium will go from $250/month to $119/month. Obviously that's very attractive
to me, but I have concerns. I do not want to lose my coverage in any way, which he assures that I won't.
One of the expanations given is that insurance companies are required to spend 65¢ of every $1.00 on claims,
and that by having this healthy pool they can reduce our premiums. How do I vet this to make certain
that I won't be making a major mistake by taking advantage of this offer? Has anyone else had this experience
in the past? I don't want to lose my current plan benefits or status. And what happens to those not put into this new pool?

 

[MBSC]

Medicare supplement (Medigap) plans are standardized. Plan G provides the same benefits regardless of the company. The benefits would change only if you changed plan letters, like moving to Plan N.

$250/month is way too much for a 74 yr old. If your agent can move you to a lower cost Plan G, then do it. The agent should have been shopping for lower rates a long time ago.

Creating new enrollment pools has become commonplace in the Medigap industry. It's a way to keep rates low for those turning 65. When the old pool closes, there are no young, healthy enrollees entering the pool to keep rates low. Rates begin to increase at a faster pace, as you have experienced with the $250 premium. Those who cannot be moved to a new pool or different company will experience ever increasing premiums as the pool becomes older and sicker.

 

[Wu8jmsM]

I'd recommend taking the offer. Especially if they offer to waive underwriting questions. My agent disappeared and left us high and dry, I would have loved to have been moved into a new pool... had I known such a thing existed.

I don't know / think it is fair but they are gonna' do what companies who are out to make money do. If you are happy with your company, you should try and pay them as little as you can. We all have to try and make out as best we can. It sounds like you have a good agent who is in your corner and working for you.