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Life Health > Health Insurance > Medicare Planning

Independent agents increase share of Medigap revenue

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More issuers of Medicare supplement insurance policies are selling the products directly to consumers, but independent agents are generating a higher percentage of the Medigap sales revenue.

Analysts at Gen Re have put data supporting that conclusion in a summary of results from Gen Re’s 2015 Medigap issuer survey.

A Medigap insurance policy helps people who have the traditional Medicare Part A hospitalization insurance and the traditional Medicare Part B physician and outpatient services coverage fill in the many traditional Medicare coverage gaps. A Medigap plan can help the enrollee meet Medicare deductibles and pay Medicare co-payment and coinsurance bills.

Gen Re, a Stamford, Connecticut-based reinsurance arm of Warren Buffett’s Berkshire Hathaway Company, received 51 completed questionnaires for its 2015 Medigap issuer survey. That was down from 54 in 2014, but it was up from 50 in 2013.

More Medigap issuers reported they are selling the products straight to consumers, without help from agents. The percentage of issuers saying they used the direct-to-consumer channel rose to 55 percent in 2015. That was up from 51 percent in 2014, and up from 41 percent in 2013.

But 87 percent of the active issuers said they sold at least some Medigap coverage through independent agents last year.

The share of sales revenue coming from independent agents rose to 67 percent in 2015. Independent agents accounted for 65 percent of the issuers’ sales in 2014, and 59 percent in 2013.

In 2015, 40 of the Medigap issuers that participated in the Gen Re survey were actively selling new Medigap policies.

Revenue from new sales rose 4.2 percent, to $2.2 billion. The number of people covered by the new policies sold rose 3.2 percent.

Revenue from all Medigap policies in force rose 5.7 percent, to $19 billion. The number of people covered by the policies rose 8.5 percent.

Related: Medigap enrollment rises 6.5%

Congress created a standardized “letter plan” system for Medigap in 1992. Each new plan sold must offer the standard package of benefits associated with one of the letter plan categories, such as the popular Plan F category.

But the country relies mainly on state insurance regulators to oversee the Medigap market. The Centers for Medicare & Medicaid Services has much less direct involvement with overseeing Medigap plans than with overseeing Medicare Advantage plans or the Affordable Care Act public exchange plan system.

Because CMS gets less information about the Medigap program, it tends to publish less data on that program than on other big public health programs.


Gen Re: New Medigap enrollment rises 23%

Gen Re: Medigap Issuers Forecast Stability

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