May 30, 2023
Medicare Supplement products (also known as Medigap) continue to remain a viable and stable alternative to Medicare Advantage options for seniors looking to offset the out-of-pocket costs of traditional Medicare coverage. In 2022, Medicare Supplement (Med Supp) carriers experienced consistent total membership, with more and more seniors aging into and choosing retirement. Based on performance data filed in annual financial statements from the NAIC (National Association of Insurance Commissioners), enrollment in Med Supp plans was 13.773 million. Year-over-year enrollment growth declined by less than 1%. This brief provides an overview of the Med Supp market with insights about competitive positioning and standardized plan type preferences.
Mark Farrah Associates (MFA) identified 181 distinct carriers that filed Med Supp annual data with the NAIC, as of December 31, 2022. Breakdowns of in-force policies show that carriers issued policies to 4.4 million members in the last three years. Carriers reported an aggregate of over 9.3 million members covered by in-force older policies that had been issued prior to the year 2020.
Among standardized Plans A-N, Plan F covers the annual Medicare Part B deductible and offers the most comprehensive benefits. Approximately 5.3 million Med Supp members were enrolled in Plan F and accounted for 39% of the market in 2022; dropping from 5.7 million in 2021. On January 1, 2020, Plan F (and Plan C) ceased to be an option for newly eligible Medicare enrollees. This policy change caused a shift in growth from Plan F to Plan G. Plan G provides a high-deductible option for new beneficiaries and continued to experience year-over-year increases, enrolling 4.8 million members in 2022, from 4.3 million members in 2021.
**Note Plan type “P” for Pre-Standardized is used for policies issued prior to the enactment of the Omnibus Reconciliation Act (OBRA) of 1990, which standardized benefits for Med Supp plan types. Plan type “O” or “Other” is used by carriers in a few states including Massachusetts, Minnesota, and Wisconsin that receive waivers to the standardized Med Supp regulations.
Med Supp plans collectively earned approximately $33.9 billion in premiums and incurred $28.3 billion in claims during 2022. The aggregate loss ratio (incurred claims as a percent of earned premiums) was 83.6% in 2022; an increase from 78.7% in 2021. This indicates that medical claims are continuing to increase and recover from the impact of Covid-related restrictions experienced by both healthcare providers and seniors throughout 2020. The aggregate loss ratio in 2022 is up from 81.1%, in 2019, pre-Covid.
As of December 31, 2022, the top 10 Med Supp companies comprised 70% of the market with over 9.7 million members. UnitedHealth, with its longstanding contract with AARP, continued to lead in this segment with 4.4 million members, and commands 31.7% of the market. Mutual of Omaha ranked second with 9.9% market share and approximately 1.4 million members. CVS was the third largest Medigap plan in 2022, with over 1.2 million enrolled. Elevance ranked fourth with almost 691,000 members. Amongst the segment leaders, CVS continued to experience the most growth, with a 5.1% increase over the last year, while CNO Financial continued to report larger than average declines in membership. CNO Financial’s rank in the top 10 dropped below Blue Cross Blue Shield of Massachusetts in 2022.
With over 65 million Medicare beneficiaries residing in the U.S., Med Supp insurers continue to diversify their senior market portfolios to leverage opportunities across all product lines and expand product options to keep up with industry trends. Mark Farrah Associates will continue to monitor enrollment and plan performance in this competitive segment.
About Med Supp Market Data
Med Supp Market Data, a subscription option through Mark Farrah Associates’ Health Coverage Portal™, presents the latest market share and financial performance data for Med Supp plans. The product includes state-by-state membership, premiums, claims and loss ratios for plans nationwide. MFA’s new user interface allows for better period to period analyses, and multistate comparisons, with enhanced filtering capabilities. Online tables also include claims contacts as reported in the financial statements filed with the National Association of Insurance Commissioners (NAIC). California managed care plans do not file financial statements with the NAIC and are not included in this analysis. For more information about Med Supp Market Data, please visit our website or call 724.338.4100.
About Mark Farrah Associates (MFA)
Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, 5500 Employer Health plus, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.
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