Medicare Supplement rate increases are inevitable. Some Insurance agents say you should look at the history of Medicare Supplement rates with a particular company, to dictate what future increases will look like. But, that’s like looking in your review mirror as you are driving, to predict what the road in front of you will look like!
The truth is, no one knows what the future holds, but working with a good Medicare insurance Broker can help.
So, why do Medicare Supplement Rate increases happen?
- Rates are market driven
- Renewal rates reflect loss ratios
- Loss ratios impact renewal rates but are tempered by market share
- Medigap carriers rarely stay in a particular market longer than 3 or 4 years
Renewal rates are market driven
More demand equals higher prices. As Florida’s population grows, especially with the baby boomer generation, more demand is created for the product. As hard as it can be to believe, there is only a limited supply of money that an insurance company has to insure with.
Renewal rates reflect loss ratios
Some carriers try to enter a market by underpricing their plans in order to attract market share. At first, these plans and rates are very competitive… for year, maybe two. Then comes the rate increases… double digit rate increases.
Low rates + loose underwriting = high loss ratios.
This is a formula that rarely works, but for some reason is repeated time and time again in the insurance industry. What happens next, is the carrier completely pulls out of the market. As Floridians, we have seen this happen, not only in the medigap space, but also with homeowner insurance.
Carriers come and go
In 2023, Florida has over two dozen companies that offer Medicare Supplements. However, over the past 10 years, another two dozen have come and go. But still, only 2 companies have dominated the market – AARP/UHC and Florida Blue.
The smaller companies offer competition, but you need to know what you are buying.
Ask a Florida Medicare Broker for advice
A Medicare broker represents several companies, not just one, and works for you, not the insurance company.
Take 20 minutes out of your day, and let a broker answer your questions. If you don’t feel comfortable with their approach, then move on.
Its not personal, its business. Its your money, your insurance, your health. Protect it.
But, if you like what you hear, and what is offered, then do business with the broker. But keep it local. Florida local. Don’t expect a broker from an 800-number in Omaha Nebraska, to be able to help you with your Florida Medicare Supplement in Ocala.
This, just makes sense.