As commonly reported, Plans G and N continue to grow and grab market share in the overall Medicare Supplement market. In 2014, Plans G and N made up over 13% of the lives in the Medicare Supplement market, up from only 5% in 2010.

A common misperception is that the growth of Plans G and N represents a market shift away from plans covering first dollar benefits (primarily Plans C and F). The chart below shows that to not be the case. Using data from the NAIC, CSG Actuarial grouped the Medicare Supplement lives for 2010 to 2014 into 4 categories:

1. Plans in Grandfathered States
2. Plans G and N
3. Plans covering first dollar benefits (Plans C, F, and J)
4. All other plans

Medicare Supplement Distribution of Policies by Plan

The growth trends over the past 5 years for these 4 groupings of Medicare Supplement plans show some results to be expected:

  • The distribution of Medicare Supplement lives from Grandfathered States (MA, MN, and WI) has been pretty constant over the past 5 years, around 5% of the overall market.
  • As mentioned above, Medicare Supplement lives with Plans G and N increased from 5% of the total market in 2010 to 13.1% of the market in 2014.

And also some results not to be expected:

  • The distribution of Medicare Supplement lives from first dollar plans has actually increased slightly over the past 5 years, going from 66.8% of the market in 2010 to 68.4% of the market in 2014.
  • The distribution of Medicare Supplement lives in all other plans with some forms of cost sharing has decreased significantly over the past 5 years, going from 22.6% of the market in 2010 to only 13.2% of the market in 2014.

The ending conclusion is that Plans G and N have grown significantly over the past 5 years as commonly perceived, but that growth has come from a shift away from other Medicare Supplement plans with cost sharing, not from Medicare Supplement plans covering first dollar benefits.

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