Medigap Plans G, N Saw High Enrollment Growth from 2015 to 2018

July 08, 2020 - While most Medigap policies did not see much change in Medigap enrollment growth, an increasing number of beneficiaries enrolled in Medigap plans G and N from 2015 through 2018, a report from America’s Health Insurance Plans (AHIP) Center for Policy and Research found.

“Health insurance providers are committed to ensuring people have affordable choices for health care coverage and Medicare Supplement insurance plays an important role in affordability by helping to fill coverage ‘gaps’ for millions of Americans in Medicare,” Matt Eyles, AHIP president and chief executive officer, said in the press release.

There are currently fourteen standardized plan types plus three states that offer Medigap plans but exclude certain standards. Of these, plan F—including high-deductible plan F—remained the most in demand.

Plan F covers Medicare deductibles and coinsurance. There also is a high-deductible plan F with a deductible of $2,240.

This supplemental insurance plan represented over half of the standardized plan enrollment from 2015 to 2018. At the end of the reporting period in 2018, it had over 7 million enrollees.

Plan F is being phased out as of 2018. The shift caused some confusion for enrollees during open enrollment period, when some Medicare agents were incorrectly telling potential enrollees that payers were still accepting new beneficiaries into plan F.

No other plan came close to reaching plan F’s level of enrollment. However, plans G and N saw the greatest enrollment growth.

Plan G covers 100 percent of Medicare deductibles and coinsurance for beneficiaries, excluding the Part B deductible. Plan N is a new plan. It covers almost all Medicare Part B coinsurance with some exceptions and offers a regular cost-share.

Plan G enrollment had the fastest ascendancy. It grew by 39 percent in a single year from 2017 to 2018, adding nearly 650,000 new enrollees to its plan. As plan F and its high-deductible twin completely phase out in 2020, some payers that offer plan G supplemental insurance plans are stepping into the gap with a plan G extra.

Plan N grew by five percent in the same time period as more payers began to offer the supplemental plan. This was a fall from its double-digit growth in previous years. However, compared with other plans, which tended to decline or stay the same, the boost was still notable.

In contrast to these, between 2015 and 2018, plan A fell by 17 percent, plan I fell by 12 percent, and plans E, B, and C fell around 10 percent.

By the end of the reporting period, only nine percent of companies offered standardized Medigap policies in 41 states or more. The highest percentage of them (43 percent) offered standardized Medigap policies in only one state or territory.

Of those in the Medicare population that have no additional coverage—such as Medicare Advantage or Medicaid—beneficiaries were evenly split between those who have Medigap (49 percent) and those that are solely on fee-for-service Medicare (51 percent).

The AHIP report found that enrollees with Medigap had much less difficulty paying their medical bills. While five percent of those with Medigap policies reported difficulty paying their bills in 2017, more than double that percentage of enrollees without Medigap voiced similar difficulties (12 percent).

This was true despite the fact that more Medigap enrollees were close to the federal poverty line. Twelve percent of Medigap enrollees were at or below 135 percent of the federal poverty line and 28 percent had incomes that were 200 percent of the federal poverty line or less.

Medigap policy holders also tended to live in rural areas without a partner, giving them less of a support network.

“As today’s report illustrates, a growing number of America’s seniors find value in the protection Medicare Supplement plans provide from uncovered medical expenses and complex doctor and hospital bills,” Eyles said.