Medigap Enrollment and Market Context
As of December 2024, approximately 13.5 million beneficiaries were enrolled in Medigap policies across the United States, as insurers filed data with the National Association of Insurance Commissioners (NAIC). This number represents a slight decrease in overall enrollment compared to prior years, influenced by the continued growth of Medicare Advantage plans.
Medigap policies are available only to those with Original Medicare (Part A and Part B), so the enrollment figures must be viewed in the context of the entire Medicare population. The number of Medicare Advantage enrollees surpassed the number of Original Medicare beneficiaries in recent years, affecting Medigap's total market share. Despite these shifts, Medigap remains a crucial supplemental insurance option for millions who prefer the flexibility of Original Medicare.
Enrollment Statistics and Trends
While overall Medigap enrollment shows minor shifts, the proportion of individuals in Original Medicare who choose Medigap has remained strong. For example, in 2022, 42% of people in traditional Medicare had a Medigap policy. The total number of Medigap policyholders reached a peak in recent years but has since seen a slight decline, largely due to the increasing appeal and marketing of Medicare Advantage plans.
Key trends impacting Medigap enrollment include:
- Growth of Medicare Advantage: The rising enrollment in Medicare Advantage plans directly reduces the pool of beneficiaries eligible for Medigap, as the two are mutually exclusive.
- Demographics: Analysis of 2022 data shows that Medigap enrollees are more likely to be White, have higher incomes ($40,000+), and report better health compared to the overall traditional Medicare population.
- State-by-State Variation: Medigap enrollment percentages vary widely by state, reflecting different market dynamics and regulations. In 2023, the percentage of traditional Medicare beneficiaries with Medigap ranged from 9% in Hawaii to 67% in Iowa.
- Guaranteed Issue Rights: An individual's initial Medigap Open Enrollment Period is the best time to enroll, as insurers cannot deny coverage or charge higher premiums based on health status. This enrollment window is critical for securing coverage, especially for those with pre-existing conditions.
Popular Medigap Plans
Standardized Medigap plans are identified by letters (e.g., Plans A, B, G, N). The popularity of specific plans shifts based on changes in law and beneficiary preferences. The most popular plans offer the most comprehensive coverage for out-of-pocket costs.
- Plan G: In 2024, Plan G was the most popular, covering 39% of policyholders, or 5.7 million people. It is the most comprehensive plan available to new enrollees and covers all cost-sharing for Part A and Part B services, except for the Part B deductible.
- Plan F: Historically the most popular plan, Plan F is no longer available to new Medicare beneficiaries who became eligible after January 1, 2020, because it covered the Part B deductible. However, in 2024, Plan F still covered about 4.5 million existing policyholders, making it the second most common plan.
- Plan N: This plan, which is similar to Plan G but with some cost-sharing requirements, was the third most popular, covering 10% of policyholders in 2023.
Medigap vs. Medicare Advantage: A Comparison
Choosing between Medigap (used with Original Medicare) and Medicare Advantage is a major decision for beneficiaries. The table below highlights key differences.
| Feature | Medigap (with Original Medicare) | Medicare Advantage (Part C) |
|---|---|---|
| Network | Freedom to see any doctor or specialist who accepts Medicare, nationwide. | Typically uses a managed care network (HMO, PPO). Seeing out-of-network providers is more restricted and costly. |
| Monthly Premium | You pay a monthly premium to the private insurer, in addition to your Part B premium. | Many plans have a $0 premium, though you must continue to pay your Part B premium. |
| Cost-Sharing | Covers Medicare deductibles, coinsurance, and copayments, significantly limiting your out-of-pocket expenses. | Has its own cost-sharing rules (copayments, coinsurance) and often includes an annual out-of-pocket spending limit. |
| Extra Benefits | Does not cover extra benefits. Needs a separate Part D plan for drug coverage. | Often bundles additional benefits like dental, vision, hearing, and wellness programs. |
| Enrollment | Best to enroll during the 6-month Medigap Open Enrollment Period to guarantee acceptance regardless of health. | Annual enrollment periods allow you to join, switch, or drop a plan. |
State Variation in Medigap Rules
Regulations governing Medigap policies differ significantly by state. These differences can affect availability, pricing, and guaranteed-issue rights. For instance, some states require insurers to offer Medigap plans to Medicare beneficiaries under age 65 who have a disability, though federal law does not. Additionally, pricing methods, such as community-rated, issue-age-rated, and attained-age-rated, are determined at the state level, impacting premiums.
Conclusion
While the market for Medicare coverage is evolving with the growth of Medicare Advantage, millions of beneficiaries continue to rely on Medigap for comprehensive and predictable supplemental coverage. Recent data shows Medigap enrollment remains substantial, particularly among those with Original Medicare. The choice often comes down to a preference for network flexibility versus bundled benefits and lower premiums. Understanding the enrollment trends and key differences is crucial for beneficiaries to make an informed decision about their healthcare coverage.
For more information on specific Medigap plans and state regulations, visit the official Medicare website.
