Medicare Supplement. Southeastern Actuaries Conference Annual Meeting November 19 21, Robert Himmelstein, Second Vice President ASA, MAAA

Transcription

1 Medicare Supplement Southeastern Actuaries Conference Annual Meeting November 19 21, 2014 Robert Himmelstein, Second Vice President ASA, MAAA

2 Proprietary Notice The material contained in this presentation has been prepared solely for informational purposes by Gen Re. The material is based on sources believed to be reliable and/or from proprietary data developed by Gen Re, but we do not represent as to its accuracy or its completeness. The content of this presentation is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 2

3 Other Proprietary Notices This product is meant for educational purposes only. Any resemblance to real persons, living or dead is purely coincidental. Void where prohibited. Some assembly required. No other warranty expressed or implied. This is not an offer to sell securities. May be too intense for some viewers. All models over 18 years of age. Sanitized for your protection. Subject to change without notice. Please remain seated until the ride has come to a complete stop. Not recommended for children. Contestants have been briefed on some questions before the show. Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 3

4 A Little History Medicare Established 1965 Title XVII of the Social Security Act Intended for People over 65 People with disabilities ESRD SS Definition Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 4

5 A Little History Medicare Part A Hospitalization No Premium (for most) Deductible in $1,260 (first 60 days) Days Insured pays $315 / day SNF -- $ / day Always Proportional Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 5

6 A Little History Medicare Part B Physician Premium $ for 2015 Income based since 2007 Increase if delay purchase Deductible in $147 Essentially 80% coverage Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 6

7 A Little History Medicare Part C Medicare PPO Balanced Budget Act 1997 Medicare + Choice Medicare Modernization Act 2003 Medicare Advantage Insurance company surrogate for Medicare Government reimbursement plus premiums Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 7

8 A Little History Medicare Part D Medicare Prescription Drug Plans Medicare Modernization Act 2003 Stand Alone PDP (Prescription Drug Plans) With Advantage MA-PD Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 8

9 A Little History Medicare PPACA Restructures Medicare Advantage reimbursements Phase in to close Part D Donut Hole Adds Preventative Services to Medicare Cost containment initiatives Bonus to physicians in underserved areas Medicare Supplement exempt Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 9

10 Supplemental Coverage among Medicare Beneficiaries Medicare Current Beneficiary Survey 2010 Other Public Sector 1.0% Medicare Managed Care 23.8% Medicaid 13.8% No Supplemental Coverage 10.4% Medigap 21.6% Employer Sponsored 29.4% 10.4 M Lives $22.8 B 2013 EP Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 10

11 A Little More History Medicare Supplement Eligible with Part B enrollment Open Enrollment Age 65 entrants or recent retirees Under age 65 disabled in some states Guaranteed insurability State by state Opt out of Med Adv 12 months If Med Adv plan discontinued Underwriting Guaranteed Renewable Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 11

12 A Little More History Medicare Supplement Pre-Standard Similar to any other medical coverage Designed to supplement Medicare Lessor or additional benefits Different loss ratio standards Little additional regulation 2013 Earned Premium $1.345 Billion 6% of Medigap Market 500,000 Lives Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 12

13 A Little More History Medicare Supplement Standard Specific Plans A - J Waiver States MA, MN, WI 65% Minimum LR Experience Refunds Guaranteed Renewable Select (14% Inforce; 4% Sales) Standard Plans (Except Plan A) Part A Deductible Waived Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 13

14 A Little More History Medicare Supplement Plan A = (Part A Coin; Part B Coin; 3 Pints Blood) Plan B = Plan A + (Part A deductible) Plan C = Plan B + (SNF; Part B Deduct; Foreign Travel) Plan D = Plan B + (SNF; Foreign Travel; At Home Rec) Hospice added to Basic Benefits for all plans (2010) At Home Recovery Eliminated (2010) Plan E = Plan B + (SNF; Foreign Travel; Preventative) Preventative Expanded as Basic Benefit (2010) Plan E eliminated as now redundant (2010) Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 14

15 A Little More History Medicare Supplement Plan F = Plan C + (100% Excess) Plan G = Plan D + (80% Excess) Drug Plans Plan H = Plan E - (Preventative) {1,250 Drug Limit} Plan I = Plan G w/ (100% Excess) {1,250 Drug Limit} Plan J = All Benefits {3,000 Drug Limit} Part D (2005) Insured s Choice to Switch or Keep Alternate H, I & J created w/o Drug Can keep; No new sales Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 15

16 A Little More History Medicare Supplement High Deductible Plans Plans F & J $2,180 Deductible 2015 Otherwise same benefits New MMA Plans More Cost Sharing Part A Coinsurance; Preventative % of Part B Coin; Blood; Hospice; SNF; Part A Deduct Plan L 50%; $4,940 Out of Pocket 2015 Plan K 75%; $2,470 Out of Pocket 2015 Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 16

17 A Little More History Medicare Supplement Modernized Plans All 2010 Plans Change Fresh start? New Rating Rate Increases Plan M = Plan D 50% Part A Deductible Plan N = Plan D $20 per visit ($50 ER) Part B copay Most Popular Of The New Plans Very Little Activity K, L, M Plans A, B, C, D, F, G, K, L, M, N Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 17

18 Experience - How Do Claims Tend To Trend? Medicare Supplement Part A Approximately 20% Of Medigap Claims Vast Majority Based On Deductible & Proportional Benefits Consistently Averaged 3% Trend Increases Part B Approximately 80% Of Claims Very Little From Deductible Mostly Proportional To Medicare Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 18

19 Experience Average Medicare Part B Trends 2014 Trustees Report 18% 16% 14% 13.8% 15.6% 13.4% 12% 10% 8% 6% 4% 2% 12.3% Standardization 11.3% 6.6% 6.0% BBA 9.0% MMA PPACA 5.0% 1.6% 4.4% 0% Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 19

20 Experience The Market NAIC Data Top Companies 65% Of Market UHC Blues Different Operations Influence Results MoO 10% 280 Companies With Inforce Premium 175 Companies With Sales Last 3 Years 75 Companies With $50m + Premium Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 20

21 Experience Industry Loss Ratios NAIC Data 82.0% 80.0% 79.9% 80.0% 79.1% 80.1% 78.0% 78.3% 76.0% 74.0% 72.0% 74.5% 74.8% 74.9% 76.9% 73.2% 76.9% All Companies W/O UHC & Blues 71.8% 70.0% NAIC Data Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 21

22 Experience Plan Distribution NAIC Data 0.9% 2.0% 7.2% 0.8% 10.7% 7.2% 0.4% A B C D F G K; L; M 70.6% N NAIC Data Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 22

23 Experience The Survey Says GenRe Survey 50 Companies Participate Pricing 41% Couples Discounts 57% Preferred Rates 80% Just Smoker Refunds 18 Paid refunds $19.3m Average of Six States Persistency 88% On Average Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 23

24 Key Issues Medicare Supplement ESRD 28 States Mandate Guaranteed Issue 7 States Mandate PPACA What Happens Now? Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 24

25 Medigap Under Attack Medicare Supplement Next Revisions? Medigap Creates Additional Costs for Medicare? Major Overhaul or Tweaks? Proposals Surcharge Plans C & F Single Deductible Parts A & B New Beneficiaries - $25 Higher Deductible Every Other Year Medicare Supplement Robert Himmelstein 11/20/2014 Proprietary and Confidential General Reinsurance Corporation 25

26 Thank You Robert Himmelstein, Second Vice President ASA, MAAA Visit genre.com for more info.