New Report: Medigap Continues Strong Enrollment Growth Among Seniors

posted by Clare Krusing

on October 28, 2015

For Immediate Release

Washington, D.C. – For the fifth year in a row, enrollment in Medigap plans has continued to increase as more seniors come to rely on this important coverage option, according to a new report released today by America’s Health Insurance Plans (AHIP). Between December 2013 and December 2014, enrollment in Medigap increased to 11.2 million, up from approximately 10.6 million the previous year.

Medigap is private health insurance designed to supplement fee-for-service Medicare. Medigap helps cover significant out-of-pocket expenses that are not covered by Medicare and allows seniors and individuals with disabilities to budget for medical costs and avoid the confusion and difficulty of handling complex medical bills. The steady growth in enrollment matches seniors’ consistent satisfaction with their coverage. In fact, a recent survey found that more than 9 out of 10 (94 percent) of Medigap policyholders are satisfied with their coverage, and more than 9 in 10 would recommend Medigap to a friend or relative.

“Millions of seniors continue to recognize the value of Medigap coverage in filling the gaps left by traditional Medicare,” AHIP President and CEO Marilyn Tavenner said.

The latest study, “Trends in Medigap Coverage and Enrollment, 2014” is an update to prior research measuring enrollment trends. Consistent with previous years, beneficiaries are increasingly choosing to enroll in Medigap plans that include at least some cost-sharing reduction provisions for co-pays and coinsurance.

Key findings from the report include:

Enrollment in Medigap increased to 11.2 million from 10.6 million from 2013 to 2014.
The percent of fee-for-service (FFS) Medicare beneficiaries with Medigap plans has been stable since 2010, ranging from 27 to 30 percent each year.
The fastest growing Medigap plans have been newer, standardized coverage options that contain enrollee cost-sharing requirements (such as co-payments, co-insurance and/or deductibles). For example, the highest rate of growth in enrollment was in Plan N, which includes cost-sharing of up to $20 for physician office visits and up to $50 for certain emergency room visits (waived in some circumstances). Plan N grew by 33 percent between December 2013 and December 2014.

Proposals to Change Medigap Could Threaten Affordability and Benefits Seniors Rely On

With more beneficiaries choosing to enroll in Medigap, AHIP is urging policymakers to avoid cutting benefits or enacting changes that would threaten coverage for millions of seniors and individuals with disabilities. Recent proposals – including limits on Medigap’s coverage of enrollee cost-sharing, and a surcharge on Medigap policies – would significantly undermine the value that Medigap provides and disproportionally harm the most vulnerable Medicare beneficiaries, including those low- and moderate-income seniors and individuals managing multiple chronic conditions.

Research has shown that limiting first-dollar coverage in Medigap policies would cause beneficiaries to avoid care that is medically necessary – resulting in higher costs for enrollees and the country. A white paper commissioned by AHIP concluded that “an across-the-board ban on first-dollar coverage Medigap plans is an overly blunt tool for lowering healthcare expenditures and invites adverse, unintended consequences.”

Importantly, the cost savings often cited by proponents of restricting Medigap coverage are based on proposals that would apply this change to current Medicare beneficiaries. Imposing further cost sharing on current Medigap policyholders would add a significant burden on vulnerable Medicare beneficiaries, many of whom have been paying for these benefits for many years, often have very tight budgets, and rely on Medigap for predictability in their health care costs and protection against high medical bills.

To view the full report, click here. For more information about Medigap, visit the Partnership to Protect Medigap.


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