One of the most important leading indicators that Medicare Supplement carriers need to be tracking is their mix of business. It is a great predictor of the overall health of your block of business and can provide insight into where the future loss ratios will land.
Third quarter sales results are complete, and we have compiled the following summary that shows how experience compares to prior years. Policies are grouped by coverage effective date and historical years include policies issued throughout the year.
1. Mix of Business by Plan
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Plan G continues to be the most popular plan for new business. Over 60% of issued policies in each of the last five years have been on Plan G.
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Plan N is now the second most populated plan. It had been steadily gaining ground over the past several years and is now clearly outselling Plan F.
2. Mix of Business by Issue Age
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Issued policy counts trend downward as issue age increases.
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Age 65 is still the most common Issue Age for new Medicare Supplement policies.
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Issued policy counts drop significantly for ages 80+.
3. Mix of Business by UW Type – Plan G and Plan N (Ages 66+ Only)
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Underwritten Plan G policies account for roughly 50% of the business issued with 2024 effective dates.
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Open Enrollment Plan G policies were the second most common type of policies.
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Plan N continues to grow, and Underwritten cases have outnumbered Open Enrollment cases by a 2:1 ratio for 2024.
4. Mix of Business in the “New” Birthday Rule Guaranteed Issue States (Ages 66+ Only)
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KY, MD and NV all recently implemented regulations adding opportunities for current Med Supp policy holders to exchange their policy on a Guaranteed Issue basis beginning on their birthday.
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Rules are similar to the ones that have been in place in CA and OR for 10+ years.
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In 2021 (before regulations became effective) the percentage of policies with Issue Ages of 66+ that were Non-Underwritten was about 20% in each of the states.
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There is a rapid increase in the % of policies issued as Non-Underwritten following the effective date of the regulations (dates are noted in chart legend).
