Article by Jared Strock, FSA, MAAA
In recent weeks, CSG Actuarial has been analyzing the COVID-19 pandemic and its potential impact on the Medicare Supplement and Medicare Advantage markets. Medicare Supplement and Medicare Advantage products both play an important role in insuring seniors across the United States, with an estimated 14.9 million Medicare Supplement policies and 24.7 million Medicare Advantage policies currently inforce. While they both play an important role, Medicare Advantage tends to cover a larger percentage of seniors in urban areas, while Medicare Supplement tends to cover a larger percentage of seniors in rural areas.
One piece of analysis that indicates the potential impact that COVID-19 may have on the Medicare Supplement and Medicare Advantage markets, is to observe counties with hotspots of confirmed COVID-19 cases, and see if those same counties have a higher penetration of Medicare Advantage or Medicare Supplement policies.
The map above displays counties with higher Medicare Supplement penetration (Medicare Supplement inforce counts/Medicare eligibles) in green, and counties with higher Medicare Advantage penetration (Medicare Advantage inforce counts/Medicare eligibles) in red. The yellow circles display current COVID-19 confirmed cases (as of 4/2/2020). The largest circle on the map is in Queens County, NY with just under 17,000 confirmed cases. Cook County, IL (Chicago area) has 5,500 confirmed cases.
When looking at the map this way, you can see that most COVID-19 confirmed cases are in counties with higher Medicare Advantage penetration. In fact, 83% of the total COVID-19 confirmed cases are found in counties with higher Medicare Advantage penetration.
However, this doesn’t tell the whole story, as it is expected that most cases will be in areas with higher population, which is also typically where Medicare Advantage has a higher penetration. Another way of looking at the impact is to look at COVID-19 penetration (COVID-19 confirmed cases/US population) by county, and compare that to the Medicare Supplement and Medicare Advantage penetration.
Observing the data this way reveals more clusters of relatively higher COVID-19 penetration in counties with higher Medicare Supplement penetration. If you rank US counties from highest COVID-19 penetration to smallest, 16 of the top 50 counties (32%) have higher Medicare Supplement penetration. If you exclude New York, 21 of the top 50 counties (42%) have higher Medicare Supplement penetration.
It should be noted that the penetration by county is still small, with Blaine County, ID having the highest penetration of 1.5%. For another example, the penetration in Queens County, NY is only 0.75%, even though it has the highest count of confirmed cases.
As COVID-19 confirmed cases continues to grow, CSG Actuarial will continue to analyze the potential impacts to the Medicare Supplement and Medicare Advantage Markets and provide periodic updates. If you need help analyzing the potential impact of COVID-19 on your blocks of business, feel free to contact us by email or phone.
COVID-19 confirmed cases by county is from USAfacts.org
US Population is from Census.gov
Medicare Advantage information is from CMS.gov
Medicare Supplement information is from CSG Actuarial based on NAIC Medicare
Supplement Exhibit Exhibits and other public sources