Medicare supplement (Medigap) insurance customers are voting with their wallets: Many are still clinging to the richest plans the federal government will let them buy.
The richest plan type, Plan F, and the second richest type, Plan G, accounted for 70% of Medigap enrollment in 2018.
That was up from 68% in 2017, and up from 65% in 2015, according to a new Medigap enrollment report from America’s Health Insurance Plans (AHIP).
About 9.3 million people had Plan F or Plan G coverage in 2018, up from 7.4 million in 2015.
- A copy of the AHIP Medigap report is available here.
- An article about the new Medigap deductible rules is available here.
Economists see offering bare-bones policies as a great way to give patients “skin in the game,” and encourage them to shop carefully for care.
But, in 2018, the skimpiest Medigap plans, Plan A plans, covered just 120,514 people, down 17% from the number they covered in 2017.
Overall Medigap enrollment increased 3.7% between 2017 and 2018, to 14 million.
About 33.7% of the 41.5 million who had traditional Medicare fee-for-service coverage, rather than Medicare Advantage plans, were using Medigap coverage, according to AHIP’s figures.
AHIP based its new Medigap enrollment trends report on 2018 data from the National Association of Insurance Commissioners and 2018 data from the California Department of Managed Health Care.
The traditional Medicare Part A hospitalization program covers hospital bills.
The traditional Medicare Part B program covers outpatient and physician services.
Consumers who have both, but no other coverage, face deductibles, and many complicated copayment and coinsurance requirements.
Some consumers fill in the gap by buying Medicare Advantage plans, or plans that provide a comprehensive, provider-network-based alternative to “original Medicare” coverage.
Other consumers fill in the gaps with Medigap coverage. Congress tried to standardize Medigap plans in 1990, by requiring issuers of new plans to stick with benefit designs based on a limited number of “letter plan” templates.