Relevant Statistics of Medicare Supplement Plan

Introduction

The Medicare Supplement plan continues to grow in the United States. As per th2 2017 data, there are about 62 million Original Medicare customers in the US of which 13.7 million have purchased a Medigap policy. The number continues to grow steadily as citizens have realized the importance of the Medigap policy in meeting out-of-pocket healthcare expenses. Some relevant data pertaining to the Medigap policies in the year 2017 are as follows:

Medicare Supplement Plan Sales

There has been a steady increase in the number of Medicare Supplement plan sales. In the year 2015, there were 12 million Medigap beneficiaries, which is approximately 22% of the total Medicare population. The total Americans owning a Medigap policy increased to 13.7 million in 2017. There has been a steady increase in the sales of Medigap policies from 2010 when it was reported to be 9.7 million. 58% of the total population having a Medigap policy are women. As per the 2017 data, 58% of the Medigap policy owners were married and 25% were divorced.

 

State-Wise Medicare Supplement Plan Penetration

In 2015, the national average for Medicare Supplement plan was 22%. There is high variation across states on the Medigap policy penetration. The majority of the states (30 states) have 20-29% of the Medicare beneficiaries buying Medigap policies. The penetration of Medigap policies is the highest in Nebraska (51%), Iowa (49%), and Kanas (46%).

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The Plan F is the most popular Medigap plan over the years. In 2017, Plan F accounted for 54% of the total Medigap plans sold. Since the Plan F has the most comprehensive coverage and covers the annual Medicare Part B deductible it is the most preferred plan. As the Plan F will not be available from 1st January 2020 for new Medigap enrollees, there has been a gradual shift from Plan F towards Plans G and N which are close substitutes to the Plan F.  In 2017, the sales of Plan G increased by 393,000- 31% growth and Plan N increased by 1,38,000-12% growth.

 

Medicare Supplement Plan Insurance Companies

United Health continues to the market leader in Medigap policies with 34% share and 4.5 million customers in 2017. Mutual of Omaha was the second with 9% market share and 1.2 million customers. The top 10 insurance companies control 69% of the total market share.

 

Premiums and Claims

In the year 2017, the Medigap policies collected premiums of $29.88 billion and paid claims of $23.21 billion. The aggregate loss ratio (incurred claims as a percentage of total premium) was 77.7% in 2017, compared to 77.8% in 2016.