Year-Over-Year Medicare Supplement Market Snapshot and Plan Performance Insights

June 2, 2021

The past year has certainly created an unsettled state for the health insurance industry, to say the least. However, health plans are no strangers to a volatile market, and continue to persevere with increasing efforts to improve health care delivery.  Medicare Supplement (also known as Medigap) is no exception, as the number of beneficiaries continues to climb with more and more seniors aging into retirement.  Based on performance data filed in annual financial statements from the NAIC (National Association of Insurance Commissioners), enrollment in Medicare Supplement plans was approximately 13.9 million.  When factoring in a small number of plans with just 150,000 members that had not yet filed when this analysis was conducted, year-over-year enrollment growth remained relatively flat.

Mark Farrah Associates (MFA) identified 188 distinct carriers that filed annual data with the NAIC as of December 31, 2020.  Breakdowns of in-force policies show that carriers issued policies to almost 5.1 million members in the last three years.  Carriers reported an aggregate of over 8.8 million members covered by in-force older policies that had been issued prior to the year 2018. This brief provides an overview of the Medicare Supplement market with insights about competitive positioning and standardized plan type preferences. 

Among standardized Plans A-N, Plan F covers the annual Medicare Part B deductible and offers the most comprehensive benefits.  Plan F enrolled over 6.2 million Med Supp members and accounted for 45% of the market in 2020, dropping from 6.8 million in 2019.  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 approximately 3.7 million members.

**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 Medicare Supplement 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 Medicare Supplement regulations.

Med Supp plans collectively earned approximately $33.7 billion in premiums and incurred $24.4 billion in claims during 2020.  The aggregate loss ratio (incurred claims as a percent of earned premiums) was 72.3% in 2020, a decrease from 80.5% in 2019.  The decline in medical claims, both in total $ incurred and loss ratio is noteworthy and likely due to the impact of Covid-related restrictions experienced by both healthcare providers and seniors throughout 2020.

The top 10 companies in the Med Supp arena comprise 70% of the market with approximately 9.7 million members. UnitedHealth maintained its leading position in this segment with almost 4.5 million members.   UnitedHealth, with its longstanding contract with AARP, continued to command 32% of the market with nearly 4.5 million members.  Mutual of Omaha ranked second with 10% market share and approximately 1.4 million members as of December 31, 2020.  CVS was the third largest plan in 2020, with over 965,000 enrolled.   Anthem ranked fourth with almost 671,000 members. CVS and Humana experienced the most year-over-year growth amongst the segment leaders, while Cigna and CNO Financial reported larger than average declines in membership.    

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 Medicare Supplement plans.  The product includes state-by-state membership, premiums, claims and loss ratios for plans nationwide.  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™, Medicare Business Online™, Medicare Benefits Analyzer™, 5500 Employer Health ^PLUS, 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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