CNO Financial Group says it will be updating its Medicare supplement insurance product line in 2022, in an effort to make the policies more appealing to consumers.
At this point, "our market is experiencing a secular shift away from Medicare supplement and toward Medicare Advantage," Gary Bhojwani, CNO's CEO, told securities analysts last week.
Medicare supplement insurance policies are also known as "Medigap" policies. Bhojwani and other CNO executives talked about Medigap policies during a conference call, while going over earnings for the third quarter. The quarter ended Sept. 30.
The company's new annualized premiums from Medigap policy sales fell to $8 million during the latest quarter, from $11 million in the year-earlier quarter.
Bhojwani said CNO intends to invest in both its Medigap products and its Medicare Advantage plans, to ensure that it's well-positioned to meet customers' needs and preferences.
"In 2022, we will be launching a new Medicare supplement product that we believe is more aligned with consumer preferences," Bhojwani said.
CNO has also spent money to improve its Medicare Advantage plan sales system, and it has increased the number of exclusive field agents licensed to sell Medicare products 14% from a year ago, to about 3,000, he said.
Medigap Policies vs. Medicare Advantage Plans
The Medigap program gives private insurers a chance to sell standardized insurance products to consumers who use traditional Medicare coverage.
The Medicare Advantage programs gives private insurers a way to use a combination of government Medicare subsidy money and enrollees' own premium payments to provide what amounts to an alternative to traditional Medicare coverage.
Many agents prefer selling Medigap policies to selling Medicare Advantage plans, because Medigap policy sales rules are simpler, the policies give patients more freedom to use whatever doctors and hospitals they want to use, and Medigap commissions have tended to be higher.
