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July 25, 2022 at 11:58 AM
What You Need to Know
- The richest available Medigap plans account for 72% of total Medigap 2021 enrollment.
- Medigap Plan N and a similar plan, Plan M, accounted for just 9.9% of enrollment.
- This year, Plan N may be gaining.
Consumers are changing how they buy Medicare supplement, or “Medigap,” insurance coverage.
In the first half of this year, only 51% of the 65-year-olds who bought Medigap coverage chose rich Plan G coverage, according to new survey data gathered by MedicareFAQ.com for the American Association of Medicare Supplement Insurance.
About 38% chose Plan N coverage, which tends to cost less but offers leaner benefits, AAMSI says.
That means the Medigap market could undergo a dramatic shift in the next few years.
Today, about 72% of the 14 million Medigap insureds have the richest available policies. Only about 10% have the leaner Plan N coverage. If current sales trends continue, the share of Medigap users with lean Plan N coverage could soon triple.
What It Means
People pay lower premiums for Medigap Plan N coverage than for Plan G coverage, but Plan N coverage requires patients to pay more out of their own pockets for care.
If more of your older clients have Plan N coverage, they will have to set enough cash aside to pay higher medical bills.
Medigap Basics
The “original Medicare” program was created in 1965 and has many complicated gaps in coverage.
A Medigap policy is one type of arrangement a client can use to fill the gaps. Federal law requires sellers of new Medigap coverage to base the policies on a limited set of benefits templates, or “letter plans.”
Today, the richest Plan G policies cover all acute care expenses other than a $233 deductible for physician and outpatient services.
