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AHIP: Medigap Plan N is coming on strong

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Sales of Medicare supplement (Medigap) Plan N policies boomed in 2014.

Enrollment in all Medigap policies rose 6 percent between 2013 and 2014, to 11 million.

Enrollment in Plan N policies jumped 33 percent, to 761,495. Plan N policies accounted for only 6.8 percent of total 2014 Medigap policy enrollment, but they were responsible for about 32 percent of 2014 enrollment growth.

Plan F policies continued to dominate the market. Enrollment in Plan F policies increased 9 percent, to 498,033.

America’s Health Insurance Plans (AHIP) has published those figures in its latest Medigap market report. AHIP analysts based the tables in the report on data from the Medigap insurance experience exhibits that issuers in the market file with state insurance regulators.

The traditional Medicare Part A hospitalization plan and traditional Medicare Part B physician services plan leave many gaps, in part to try to make program finances work, and in part to discourage enrollees from getting unnecessary care. In some cases, enrollees may have to pay monthly premiums. They also face complicated cost-sharing requirements. Medigap plans pay some, most or all of the enrollees’ out-of-pocket costs.

In 1990, Congress responded to complaints about the complexity of the Medigap market by requiring insurers to base the products on standardized “letter plan designs.”

An ordinary Plan F policy pays all of a purchasers’ eligible out-of-pocket costs. A Plan N policy pays all costs except for the Plan B deductibles and physician charges that Medicare program managers classify as excess charges.

Some policymakers say Plan F encourages patients to get too much care.

A law added earlier this year is supposed to prohibit the sale of Medigap plans that pay the full Medicare Part B deductible after 2020. If the law takes effect as written, consumers who already have Plan F policies will be able to keep their “zero dollar” Medigap coverage.

See also: Lawyer: Selling no-gap Medigap will be a crime


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