Medicare Supplement Enrollment Down Slightly in 2023

May 28, 2024

Medicare Supplement (Med Supp) products, also known as Medigap, are a traditional option for seniors looking to offset the out-of-pocket costs of original Medicare coverage. Total enrollment peaked for Med Supp plans in 2020 at just over 14 million but it has been on a slight downward trend since then. Based on 2023 performance data filed in annual financial statements from the NAIC (National Association of Insurance Commissioners), enrollment in Med Supp plans was 13.582 million, representing a year-over-year enrollment decline of 1.4%. This brief provides an overview of the Med Supp market with insights into standardized plan type preferences and competitive positioning.

Mark Farrah Associates (MFA) identified 178 distinct carriers that filed Med Supp annual data with the NAIC, as of December 31, 2023, down from 188 in 2020. Breakdowns of in-force policies show that carriers issued policies to 4.1 million members in the last three years, down roughly 7% from similar data in 2022. Carriers reported an aggregate of 9.5 million members covered by in-force older policies that had been issued prior to 2021.

Among standardized Plans A-N, Plan G surpassed Plan F as the most popular plan type in 2023. Plan G, covering more out-of-pocket costs than the other available plan types, continued to show year-over-year enrollment increases. On December 31, 2023, nearly 5.3 million members were enrolled in Plan G, up from 4.8 million in 2022. While Plan F covers the annual Medicare Part B deductible and has the most comprehensive benefits, on January 1, 2020, Plan F (and Plan C) ceased to be an option for newly eligible Medicare enrollees. Approximately 4.9 million Med Supp members were enrolled in Plan F and accounted for 36% of the market in 2023, dropping from 5.3 million and a 38.6% market share in 2022.

Note: Plan type “P” (Pre-Standard) 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 more than $35.3 billion in premiums and incurred $29.6 billion in claims during 2023. The aggregate loss ratio (incurred claims as a percent of earned premiums) was 83.9% in 2023, an increase from 80.4% in 2022 and 77.3% in 2021. This indicates that medical claims are continuing to increase faster than premiums are changing.

As of December 31, 2023, the top ten Med Supp companies comprised 70% of the market with over 9.5 million members. UnitedHealth, with its longstanding contract with AARP, continued to lead in this segment with 4.3 million members, and covers 32% of the market. Mutual of Omaha ranked second with 9.8% market share and approximately 1.3 million members. CVS was the third largest Medigap plan in 2023, with nearly 1.2 million enrolled. Elevance ranked fourth with almost 677,000 members. Amongst the segment leaders, CVS experienced the largest decline, with a loss of nearly 48,000 covered lives, while Globe Life added approximately 5,000 people and moved ahead of CNO Financial in terms of rank in 2023.

Conclusion

With nearly 67 million Medicare beneficiaries residing in the U.S., Med Supp insurers continue to offer an alternative to original Medicare and Medicare Advantage products for this growing marketplace. Despite total enrollment declines, carriers continue to add new Med Supp members. 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 Supplement Data, 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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