According to research from CSG Actuarial, the Medicare Supplement market shows potential for long-term growth, despite declines in overall enrollments over the last five years — which were due mostly to the implementation of the Medicare Advantage program.
CSG predicts total Medicare Supplement enrollments will increase from 10 million in 2011 to over 13.5 million in 2020.
Medicare Supplement Enrollment
|Year||Total Policies Inforce||% of Medicare Beneficiaries|
Source: CSG Actuarial
CSG's research identified four primary reasons to expect growth, including:
The number of Medicare eligibles will increase by 15.4 million people from 2011 to 2020.
Source: CSG Actuarial
2. MA shakeout — The Affordable Care Act includes several provisions that, if upheld, could make some Medicare Advantage plans less competitive due to lower payments to the carriers.
3. Group plans disappearing — Many companies and municipalities are eliminating their group retiree health care benefits, forcing many individuals onto Medicare.
4. New Medicare Supplement Plans — The Affordable Care Act calls for the NAIC to research new Medicare Supplement plans that would be introduced in 2014.
Here are four more reasons we at Senior Market Sales are optimistic about the future of Medicare Supplement:
5. Seniors love it — According to a 2009 survey from America's Health Insurance Plans (AHIP), 88% of Medicare Supplement policyholders are satisfied with their coverage and 87% would recommend it to a friend.
6. It’s great for cross-selling — Medicare Supplement attracts prospects who, generally speaking, are healthy enough to clear underwriting and typically have some assets — since they’re willing and able to pay an average of $2,000 a year in Med Supp premiums. Therefore, Medicare Supplement buyers are often great prospects for other senior insurance products, like life insurance, long-term care insurance and annuities.
7. Growing acceptance of electronic applications — Senior Market Sales agents submitted more than 10,000 Medicare Supplement apps electronically in 2010, amounting to annualized premium exceeding $13.5 million! These numbers are evidence that your clients and your fellow agents are more comfortable with technology than ever before.
Why is this cause for optimism? Electronic Medicare Supplement applications speed up your enrollments, reduce incompletes and errors, expand your sales territory, and eliminate the cost of mailing and the hassle of ordering and waiting for supplies.
8. New agents entering the market — Every day we talk to agents who are leaving the under-65 market because of changes imposed by the Affordable Care Act. If you’re new to the senior market and thinking about selling Medicare Supplement, be sure to watch our webinar New to Medicare? Essential Knowledge and Tools for New Medicare Agents.