Trends, Changes in 2020 Medicare Supplement Plan Enrollment

March 16, 2022 - Overall, Medicare Supplement plan enrollment decreased slightly in 2020, but a select few plans continued to grow with nearly 90 companies offering plan policies, according to an AHIP report.

Medicare Supplement, also known as Medigap, provides additional coverage for Medicare fee-for-service beneficiaries. The coverage can help protect beneficiaries from high out-of-pocket healthcare costs that Medicare does not cover.

AHIP gathered data from the National Association of Insurance Commissioners (NAIC) and the 2019 Medicare Current Beneficiary Survey (MCBS) to understand the recent Medicare Supplement trends.

Medigap plans G, D, and N saw enrollment increases in 2020.

Plan G covers all Medicare deductibles and coinsurance payments except the Part B deductible. This plan saw a 22 percent enrollment increase between 2019 and 2020, adding 660,000 beneficiaries. Plan G had the most significant growth rate in 2020.

Plan D—which provides similar benefits as plan G but does not cover excess costs for Part B services—had enrollment growth of two percent and added over 2,700 new beneficiaries.

Plan N—a new plan with predictable cost-sharing amounts—saw a slight enrollment increase of 0.2 percent or around 2,700 additional enrollees. Previously, plan N enrollment increased one percent in 2019 and five percent in 2018.

The remaining Medigap plans experienced enrollment reductions, generating an overall one percent decrease from 2019 to 2020.

Plan F had the highest number of enrollees, but enrollment decreased by eight percent in 2020. Plans B, C, E, H, I, and J saw double-digit enrollment reductions, ranging from 10 percent to 24 percent, the report found.

Plans F, G, and N accounted for more than 80 percent of total Medicare Supplement enrollment.

Nearly 75 percent of Medicare Supplement plan providers had Plan G policies in 2020, compared to 70 percent in 2019. Similarly, 64 percent of plan providers had Plan N policies in 2020, increasing from 62 percent in 2019.

As of December 2020, 86 companies offered Medicare SELECT plans to around 490,000 beneficiaries across 39 states. Medicare SELECT plans are the same as Medigap plans except they require policyholders to use provider networks to receive benefits. As a result, these plans usually cost less.

Nine percent of companies offered Medigap policies covering 41 or more states or territories, and 19 percent covered individuals in 26 to 40 states or territories. Twelve percent of companies covered individuals in 11 to 25 states, while 19 percent offered coverage to individuals in 2 to 10 states. Just over 40 percent of companies provided policies to individuals in one state or territory.

According to the report, 53 percent of Medicare fee-for-service beneficiaries with no additional coverage received Medicare Supplement coverage in 2020. In addition, the share of Medicare beneficiaries with Medigap coverage increased from 35 percent in 2017 to 39 percent in 2020.

Medicare beneficiaries with Medigap coverage were more likely to be 75 years or older compared to beneficiaries without additional coverage.

“Medigap protects the health and financial well-being of millions of seniors,” Jeanette Thornton, senior vice president of product, employer, and commercial policy at AHIP, said in a press release.

“Because it covers out-of-pocket costs that original Medicare doesn’t, it’s an important resource that helps enrollees budget for medical expenses. As a result, more seniors are choosing these plans – and they are benefiting from the additional protection they offer.”

Around half of beneficiaries with Medicare Supplement coverage had incomes lower than $50,000, with 11 percent making below $20,000 and 26 percent making below $30,000. In addition, rural beneficiaries with Medicare Supplement coverage tended to have lower incomes compared to urban beneficiaries.

For Medicare plans G and N, the results continue a growth trend that started in 2015.