June 13, 2018
Dive
Brief:
- More than a third of Medicare
fee-for-service beneficiaries had supplemental Medigap coverage at the end
of 2016, according to a new report from America’s
Health Insurance Plans.
- The number of people with Medigap,
which helps patients cover out-of-pocket costs after fee-for-service
Medicare coverage is applied, increased to 13.1 million in 2016 from
12.3 million a year earlier, and the percentage of traditional
beneficiaries with the extra coverage increased to 34% from 31% in 2013,
according to the report.
- AHIP found that a large percentage
of Medigap enrollees had incomes below $30,000 (36%) and were from rural
areas (41%).
Dive
Insight:
While Medicare Advantage remains
popular with private payers, Medigap has also quietly been increasing
membership this decade. MA finished 2017 with nearly 21 million enrollees,
a nearly 8% increase over the previous year. That eclipsed the 13 million in
Medigap plans.
Medigap
helps beneficiaries who have Medicare Parts A and B with
out-of-pocket costs like copays, coinsurance and deductibles. Private payers
offer Medigap, which also covers services that Parts A and B might not, such as
care outside of the U.S.
Medigap
plays a key role for many seniors. The Commonwealth Fund reported
last year that more than one-fourth of Medicare beneficiaries spend 20% or more
of their incomes on premiums and medical care, including out-of-pocket costs.
Medicare members spent an average of $3,204 per year on out-of-pocket costs.
Medicare
enrollment will rise steadily in the coming years as more baby boomers age into
the program. The number of beneficiaries is MA is expected to jump, and it's
likely Medigap will see similar heightened interest. More payers are offering
managed care plans for Medicare and Medicaid, and gap coverage plans may spread
as well.
AHIP
found that unlike MA, which has a handful of payers with large percentages of
plan enrollment across the country, Medigap plans are less widespread. The
report noted that 45% of companies offered standardized Medigap plans in only
one state or territory.
The
group said just 9% of payers offering standardized Medigap policies cover
people in 41 or more states or territories. Another 16% covered members in 26
to 40 states or territories, 14% in 11 to 25 states or territories and
16% in two to 10 states or territories.
Of
the more than 12.6 million Medigap members in 2016, AHIP found the highest
enrollment in:
- Florida (834,958 covered lives)
- Texas (776,575)
- Illinois (748,367)
- Pennsylvania (660,544)
- Ohio (613,014)
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