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Medigap Issuers Struggle to Attract New Enrollees

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The ‘red states’ in this map are home to many consumers who have only original Medicare coverage, not soup-to-nuts Medicare Advantage plans. (Credit: CMS)

Health insurers may have been better at holding on to longtime Medicare supplement (Medigap) insurance users in 2019 than at attracting new users.

Analysts at Mark Farrah Associates have raised that possibility in a new look at the annual statements insurers file with state insurance regulators.

The total number of people with Medigap coverage increased to 14 million at the end of 2019, up 3.3% from the total recorded a year earlier.

The number of Medigap users who had owned their policies for at least three years, increased 5%, to 8.7 million.

The number with newer Medigap policies increased just 0.6%, to 5.3 million.

Resources

  • A copy of the new Mark Farrah Associates report is available here.
  • An earlier article about Mark Farrah Associates Medigap market data is available here.

Medicare provides health coverage for people over 65, many people who are getting Social Security Disability Insurance benefits, and people with severe kidney failure.

The original Medicare program was designed before today’s comprehensive managed care plans came to life. The original Medicare program gives enrollees the ability to see any providers who take Medicare coverage, but it requires patients to pay deductibles, co-payments and coinsurance amounts, and it puts no caps on the enrollees’ out-of-pocket costs.

About 25 million of the people who qualify for Medicare have signed up for Medicare Advantage plan coverage. Enrollees usually have to go to in-network providers to get the lowest charges. In return, they get coverage that fills in most or all of the original Medicare gaps.

About 37.5 million of the people who have Medicare coverage are sticking with original Medicare coverage.

About 37% of the people with original Medicare use Medigap insurance policies to fill in the original Medicare coverage holes.

The Medigap market has a reputation for being a highly competitive market, where carriers still work hard to get agents’ attention.  But the 10 carriers with the most Medigap business accounted for 68% of total market premium revenue in 2019. Their combined market share was down, slightly, from 69% in 2018.

— Read The New MACRA Medigap Deductible Rules Are Hereon ThinkAdvisor.

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