The number of people using Medicare supplement insurance policies, or Medigap, increased in 2015, but overall the average cost of premium payments fell slightly. According to LifeHealthPro.com, analysts at the market intelligence agency Mark Farrah Associates (MFA) released a new report on last year’s enrollment and cost data for Medicare.
“As of December 31, 2015, enrollment in Medicare Supplement plans (also known as Med Supp or Medigap) exceeded 11.9 million, up 6.5% over 2014 figures,” the brief states. “Breakdowns of in-force policies show that carriers issued more than 5.020 million new policies from 2013 through 2015. Carriers reported an aggregate of 6.901 million in-force older policies that had been issued prior to the year 2013.”
The data MFA used was obtained from financial reports insurers filed with state insurance regulators. According to Centers for Medicare and Medicaid Services, Medigap policies only cover one person. Even for married couples, if both spouses want Medigap coverage, they are both required to buy separate policies.
One of the reasons Medigap coverage continues to increase could be an inherent result of the increasing senior population. As more and more Baby Boomers approach/reach the retirement age, modern advances in technology and health care have resulted in longer life expectancy’s. To put it a bit more morbidly, not as many people are dying as fast as more people are coming into the program.
This increase in overall numbers has helped the program increase revenue even though the average amount of premiums has gone done. The average amount of premium revenue per enrollee fell 0.5%, to $2,200 while the overall Medigap premium revenue rose by 6% to $11.9 million.
The report concluded with an optimistic view of Medigap going forward.
“Medicare Supplement will remain an attractive market for insurance companies as Baby Boomers continue to age into Medicare at a rapid pace. With 55 million Medicare eligibles, more insurers continue to diversify their senior market portfolios to leverage opportunities across all product lines in this growing segment.”