Medicare supplement (Medigap) insurance is one of the products insurers still actually want to sell, and the Medigap market continued to look strong in 2017.
Analysts at Gen Re, a reinsurer, has given a snapshot of the Medigap market in a new report based on a survey of 52 companies active in the market. Gen Re did not estimate participants’ share of the total market, but the participant list includes players such as UnitedHealth Group Inc., Humana Inc., Aetna Inc., Cigna Corp. and Health Care Service Corp.
(Related: Gen Re: New Medigap Enrollment Rises 23%)
For all participants, the number of covered lives increased 4.8%, and in-force premium revenue increased 4.8%.
A copy of a report summary is available here.
Some companies have pulled back from the Medigap market and are simply managing closed blocks of business. At those companies, the number of covered lives and the in-force premium total fell.
At the active issuers, the number of covered lives increased 14%, and premium increased 15%.
For the active issuers, the numbers are much better than they were in 2016.
In 2016, Gen Re survey participants that were active in the Medigap market reported an increase of 8.3% in covered lives and an increase of 8.2% in in-force premium revenue.
The Gen Re survey participants reported an increase in the percentage of consumers who bought coverage during the open enrollment period.
Medigap users get one six-month open enrollment period starts. The Medigap open enrollment period starts the first day of the month in which the consumer is 65 or older and enrolled in Medicare Part B.
In 2017, the survey participants made 43% of their sales to consumers who were buying coverage during the open enrollment period. That was up from 39% in 2016.
The percentage of consumers who put off buying Medigap coverage and had to go through a medical underwriting process fell to 39%, from 46%.
Gen Re also found that the underwriting process for underwritten applicants might be working better.
The percentage of underwritten applications deemed incomplete fell to 3.2%, from 3.6%.
The decline rate fell to 15.9%, from 16.2%.
The percentage of approved applicants who actually took up the coverage increased to 76.7%, from 74.8%.
But Gen Re notes that the apparent decrease in the decline rate may be due changes in the list of companies that provided underwriting decision data. For the companies that reported underwriting decision data for both 2016 and 2017, the decline rate actually increased to 17.5% in 2017, from 16.5%.
— Read Gen Re: Medigap Issuers Forecast Stability, on ThinkAdvisor.