Medicare Advantage Turmoil Boosts Medicare Supplement Sales
Price increases, plan menu cuts and issuer withdrawals in the Medicare Advantage plan market are pushing up Medicare supplement insurance sales. The number of people who bought "Medigap" policies increased 32% between 2024 and 2025, according to a new, voluntary issuer survey organized by Gen Re.
Some of the new sales went to people who already had Medigap policies, and some people with Medigap policies dropped their coverage or died. But the total number of people with Medigap coverage increased 5.3%.
Gen Re based the results on responses from 96 issuers. The issuers appear to account for about 40% of Medigap sales.
What it means: Turmoil in the Medicare Advantage plan market is leading to rapid Medigap sales growth.
The shift is a symptom of changes that are frustrating clients and leading to risk-management headaches for Medigap issuers that are facing sudden enrollment surges.
Only 78% of the new Medigap enrollees came in through the ordinary open enrollment application process or through applications that were medically underwritten. The rest — 22% — came in through sales made on a "guaranteed issue" basis, meaning that state or federal rules required the insurers to sell coverage to the applicants, regardless of whether the applicants were healthy or facing conditions such as stroke or cancer.
The backdrop: The Original Medicare Part A hospitalization program and Medicare Part B physician and outpatient services program expose enrollees to complicated requirements for deductibles, copayments and coinsurance bills.
About half of Medicare enrollees use private, federally regulated Medicare Advantage plan coverage to fill in the gaps. The plans offer to hold the enrollees' share of the premiums low in exchange for actively managing the enrollees' use of care and using reimbursement rules to encourage them to see in-network doctors. Consumers 65 and older can enroll in a Medicare Advantage plan without facing medical underwriting in any year during an annual enrollment period that runs from Oct. 15 through Dec. 7.