Medigap Market Climate Report – June 2013

The Medigap market certainly changes from time to time. Although the plans are Federally-standardized, and all companies are required to offer coverage from the standardized plans (Medigap plans chart), there are many variables that do change from time to time. Some of these include the companies offering the plans in a certain area, the rates on the plans, the underwriting that the plans require and more. With that in mind, here is the Medigap market report for June 2013.

AHIP Report

First and foremost, AHIP (America’s Health Insurance Plans) put out a report recently entitled “Trends in Medigap Coverage and Enrollment, 2012”. This report details the landscape for Medigap plans as of December 2012. This report is very useful for both consumers and agents, in seeing the latest trends for Medigap policyholders.

Some notable takeaways from the report are:

  • There are 10.2 million Medigap policyholders, an increase of 300,000 over 2011 figures.
  • Plan F has the overwhelming market share among the standardized plans at 53%. Plan C is next at 13%.
  • 7% of people that have a Medigap plan still have Plan J (no longer offered and a “closed” block of business).
  • Plans M and N were the fastest growing plans from 2011 to 2012, growing at 808% and 35%, respectively. NOTE: Plan M only had 596 policyholders nationwide in the 2011 study.

The report also breaks down plan types and coverage by state. See the report in it’s entirety – AHIP Medigap Report.

Update on Medigap Reforms

One of the oft-talked about points related to Medicare reform is changing the way Medigap plans work. The most commonly discussed reform that pertains to Medigap directly is the elimination of “first dollar” coverage. This has been “on the table” for several years now with little movement; however, it’s possible it would be revisited and included in some type of comprehensive reform package.

To elaborate on what this means, “first dollar coverage” means that you pay a premium and no out of pocket costs (i.e. Plan F), which as we know from the AHIP report above, is a very popular route for those on Medicare.

Other reports and research have shown that eliminating this first-dollar coverage would have little to no impact on Medicare’s overall bottom-line.

Medigap Surcharges

Another aspect of Medicare reform that has been discussed is Medigap surcharges. This is also related to eliminating “first dollar coverage” as some are advocating applying surcharges on the higher-level plans such as Plan F. This would effectively eliminate those plans or greatly reduce their appeal and entice people to take plans that had more cost-sharing measures.

Obviously, this is a political “hornet’s nest”, and for that reason, many don’t believe it will happen any time soon (me included). But, it is certainly something worth keeping our eyes on (which I will definitely do!).

Regardless of what happens, the hope would be that anyone in a plan now would be able to keep the plan that they have if they would like to do so.

Hot Plans and Companies

While the Medigap market can sometimes be cyclical, there are some big names still at the “top” of the list when it comes to price competitiveness nationwide. In particular, when surveying overall rate competitiveness nationally, companies that continue to appear include:

  • Aetna
  • AFLAC
  • Central States Indemnity (a Berkshire Hathaway company)
  • CIGNA
  • Mutual of Omaha
  • New Era (and sister company Philadelphia American)

While the exact rates depend on your zip code, these companies are all highly rated and, on balance, have good overall track records.

As far as specific plans, Plan G continues to be a “hot” plan with many consumers now taking a more thorough look at ‘G’ for the premium savings and greater chance of long-term rate stability. Over 50% of our new policies in 2013 have been Plan G, and I would anticipate that to continue.

If you have any questions about this information or want to discuss in more detail, please contact me at 877.506.3378 or online at Medicare-Supplement.US.

Comments

  1. Thomas Rutkowski says:

    My wife is a client of yours. I will be 65 in Oct. Live in South Carolina. 92576. Very healthy, I take no pills and have Blue cross cobra policy now.I go to the VA for yearly check up.I am on blue cross Cobra plan.What about an advantage plan or what do you recommend. I guess I got to have a prescription as well? Thanks Tom 843 215 5324

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