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Medicare Blog | Medicare News | Medicare Information

The Upswing of Medicare Supplements

Posted by Lauren Hidalgo on Fri, Jul 22, 2011 @ 09:16 AM

Medicare SupplementsIn the past few years, the senior insurance market has seen tremendous growth. Curious if this would continue to be the case, Bryan R. Neary and his associates launched a study to find out if Med Advantage would trump Med Supp in the next ten years. They found the process more complex than they originally thought, but in the end they saw the Med Supp enrollment increasing in the 10 year time frame. Due to the proposed new health care laws, Neary and his team made conservative assumptions based on what is already known. They took the current Medicare enrollment, a reliable Medicare enrollment projection, the historical changes in the Medicare market, and a realistic Medicare Supplement projection into consideration when compiling their data. The assumptions they used were that the demographics of current Medicare beneficiaries are accurate, there will not be a dramatic shift in the future, lapse and replacement rates will not experience a dramatic change, and annual rate increases will not have a dramatic change.

Neary explained that signs of growth in the Med Supp market include:

  1. Baby Boomers – with this generation comes an influx of 15.4 million over the next 10 years, providing multiple opportunities for Med Supp sales.

  2. Medicare Advantage Reductions –the health care law includes Medicare provisions that will gradually reduce subsidies paid to Medicare Advantage starting in 2012.

  3. Decrease in Retiree Health Benefits – due to the economic times less companies will be able to offer retiree health benefits, by 25% over the past 20 years.

  4. New Medicare Supplement Plans – new plans should be introduced in 2014, eliminating first-dollar coverage. Like with the introduction of Plans M and N in 2010, this will likely create a buzz in the market and generate more sales. He also suggests more lower-cost plans become available, which would open the market to those who previously couldn’t afford it.

Their conclusion is that the Medicare Supplement offers a long-term sustainability. With the opportunities available like Baby Boomers, Medicare Advantage reductions, decrease in retiree health benefits, and the insertions of new Med Supp plans into the market there will be an increase in selling opportunities and, therefore, enrollment.

To review the list of Medicare Supplement companies that we offer, please see our Medicare Supplement carriers.

Please give us your feedback!
Do you agree with Neary's findings? Have you already begun to see an upswing with the influx of Baby Boomers?

Source: InsuranceNewsNet

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Tags: senior market news, Medicare News, health care reform, Sentinel Life Medicare Supplement, industry news, Baby Boomers

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