Medigap Plan G Sales Rise 39%: Mark Farrah Associates

Analysts at Mark Farrah Associates have published those figures in their latest Medigap market update. The analysts based their work on financial reports filed by 196 Medigap coverage issuers.

Letter Plans

The Medigap market gives insurers a way to sell coverage that helps consumers cope with the many gaps in the "Original Medicare" Medicare Part A hospitalization benefits and the Medicare Part B physician and outpatient services benefits.

In 1990, Congress created the "letter plan" system, to try to help give consumers a way to shop for different types of Medigap policies on an apples-to-apples basis. A policy based on a particular letter plan must cover the standardized package of benefits associated with that letter plan template.

Traditionally, the richest letter plan, Medigap Plan F, has been the most popular type of Medigap coverage.

Congress recently changed the letter plan rules to keep people who will become newly eligible for Medicare from signing up for Plan F coverage, because of concerns that Plan F policies do such a good job of protecting consumers from out-of-pocket expenses that consumers with that type of coverage end up getting too much low-value care.

Starting in 2020, the richest Medigap coverage that people who become eligible for Medicare will be able to get will be Plan G coverage. A Medigap Plan G policy covers most of what a Medigap Plan F policy covers, but a Plan G policyholder must take responsibility for paying the Medicare Part B physician and outpatient services annual deductible. This year, the Medicare Part B deductible is $185.

Plan F policies accounted for 52% of The number of people with Plan F coverage fell by 15,000 in 2018, to about 7 million.

Finances

The Medigap issuers in the Mark Farrah database collected $31 billion in premiums in 2018 and spent $25 billion on claims.

In 2017, the issuers collected $30 billion in premiums and paid $23 billion in claims.