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Medicare Supplement insurance (also referred to as MedSupp or Medigap) provides coverage for a beneficiary’s various obligations under traditional Medicare Fee for Service (Medicare FFS), such as the deductible and coinsurance for Parts A and B.
A brief summary of MedSupp regulation, benefits, and rating includes the following:
The growth of the Medicare-eligible market will keep the MedSupp industry viable and relevant. MedSupp membership grew approximately 4% from 2017 to 2018, to approximately 14 million members.1 Competitive loss ratios and average premiums vary by state, with overall 2018 industry loss ratios running below 80% and average premiums equal to about $200 per member per month (PMPM). Market/competitive concentration also varies by state, with several carriers involved in the MedSupp market at varying levels of market concentration and geographic distribution.
The MedSupp market has its own regulatory changes and challenges. The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) will affect the MedSupp industry in calendar year 2020 due to the introduction of new benefit coverage restrictions affecting what can and cannot be covered, depending on when an individual turns age 65 or otherwise qualifies for Medicare for the first time.
At Milliman, we have the experience, resources, and industry knowledge to help carriers evaluate the ramifications of the new legislation and stay ahead of emerging legislation and market trends. We specialize in the development and maintenance of MedSupp blocks of business.
We have extensive depth and deep connectivity in the MedSupp industry, providing independent third party strategic and tactical expertise and assistance across a spectrum of needs for both new potential market entrants and longstanding legacy carriers:
This issue brief explores the resources available to help carriers quantify the expected effect of possible Medicare Supplement medical underwriting application changes and considerations.
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