Producers have complained about compensation trends in the Medicare supplement (Medigap) insurance market in recent years, and insurance carrier marketers have yawned at the thought of single-digit Medigap market growth.
But, in 2014, given the storms that tossed and turned some other health insurance markets, the Medigap market started to look less boring and more pleasingly steady.
Analysts at Mark Farrah Associates talk about the joy of shelter in a new look at 2014 Medigap issuer financial statement data.
The total number of covered lives increased 5.2 percent between 2013 and 2014, to 11.2 million, the analysts report.
See also: 3 top Medigap sales tips
Growth was especially strong at the unit of UnitedHealth Group Inc. (NYSE:UNH) that supplies Medigap coverage for AARP, performance was also strong at other Medigap issuers, the analysts say.
In spite of congressional efforts to promote apples-to-apples by standardizing Medigap plan designs in 1990, the market continues to have a reputation as being a sector in which a large number of smaller carriers wrestle hard for business.
For the past year, the Medigap market was also a market in which agents and brokers could operate without getting the equivalent of doctorates in Patient Protection and Affordable Care Act (PPACA) studies.
For a look at how the Mark Farrah see the Medigap market, read on.
1. New lives are coming in.
Total Medigap enrollment grew, and another key factor also grew: the number of enrollees with relatively young Medigap policies.
The enrollees with policies that were 3 just years old or younger increased 5.8 percent, to 4.7 million.
Solid growth in the number of relatively new enrollees seems to be a sign that Medigap issuers are having good success with competing with issuers of Medicare Advantage plans, and with cash-strapped consumers’ inclination to stick solely with Medicare Part A and Medicare Part B and wish for luck.