It was just a matter of time before the political machine started looking into Medicare Supplements. Earlier this month, Senate Democrats targeted one Medicare Supplement company for high rates increases. Senate Majority Leader Harry Reid, D-Nev., joined with Sen. Max Baucus, D-Mont., and Sen. John Kerry, D-Mass., to send a letter about Medicare Supplement rate increases to U.S. Secretary of Health and Human Services Kathleen Sebelius.
They were responding to reports of up to 40% rate increases on a few policy holders. These rate increases only applied to about 1% of the company’s entire block of business due to policy holders enrolling during a pending rate increase.
Example: Pending rate increase (10%) + Attained Age rate increase (10%) + Next Year’s rate increase (10%) = One BIG rate increase on the policy holder’s 12-month anniversary date.
Here is a link to the National Underwriter’s article on the topic.
Here is a link to THE HILL’s article on the topic.
The additional attention from DC may encourage Medicare Supplement companies to better explain rates increase to their policy holders. It may even encourage them to soften the blow of large rate increases by spreading them out over more policy holders or larger blocks of business.
On the flip side, it seems like politicians are always trying to make insurance companies the villains. In this case, they are probably trying to change public perceptions of Health Care Reform and why it is needed.