Medicare Supplement Issuers Keep Claim Ratios Under Control

UnitedHealth Group Inc. and Mutual of Omaha together accounted for about 43% of 2017 Medigap premium revenue.

Analysts at Mark Farrah Associates, a McMurray, Pennsylvania-based health insurance data firm, base their Medigap figures on insurers' financial statements. Their totals do not include the enrollees in California managed care companies' plans, because California managed care companies file different forms.

The American Association for Medicare Supplement Insurance, which includes California managed care company data, recently reported that it believes total Medigap use increased to 13.6% in 2017, from 13.1% in 2016.

Congress and Medicare program managers have designed the basic Medicare Part A hospitalization program and the Medicare Part B outpatient and physician services program to have many coverage holes, or "cost-sharing" provisions, both to hold down direct spending and discourage unnecessary use of care.

Traditional Medicare enrollees use Medigap policies to pay the costs the traditional Medicare program does not cover.

— Read also, on ThinkAdvisor:

• Maybe Traditional Medicare Should Cover Chronic Care, Too: Hearing Witnesses
• Web Health Broker Gives Peek at Per-Enrollee Commissions
• A Medicare Benefits Update Could Cut Medigap Sales: GAO

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