Gen Re is pleased to present this summary of key highlights from our latest U.S. Medicare Supplement Market Survey. The full report covers Medicare Supplement (Med Supp) results and market trends for 2022, capturing sales and in‑force data, business performance, rate increase activity, underwriting tools and practices, claim metrics, and compensation and distribution details. The comprehensive report is available to participating companies only.

Forty-five questionnaires were completed, representing 91 companies with Med Supp business. Participating companies were segmented by whether they reported open and/or closed blocks of Med Supp business.

Annualized In‑force Premium and Lives for 2022

Participating companies reported $13.0 billion of Medicare Supplement in‑force premium for 2022, an increase of 2% over 2021. In‑force premium for open blocks increased nearly 4%, while declining 1% for closed blocks. Participants also reported nearly 5.3 million covered lives, fairly level with 2021 results. Open blocks account for 64%of the total premium in-force and 72% of covered lives.

Annualized Sales Premium and Lives for 2022

Companies reported $1.2 billion of Med Supp sales premium for 2022, declining by 11% compared to 2021. The number of new lives covered declined by about 97,000 or ‑12%.

Source of Sales Premium and Lives

The majority of companies sold Plan F, Plan G and Plan N in 2022. Plan G accounts for 69% of the total new sales premium and lives for 2022. Although most companies also sold Plans F and N, those plans account for only 13% and 8% of new sales premium, respectively, and only 9% of new lives covered.

Profitability

Fifty-four percent of companies with open blocks and 86% with closed blocks reported a profit in 2022. Profit margins averaged -0.3% for companies with open blocks and 7.9% for closed blocks. Loss ratios averaged 81% for companies with open blocks and 76% for closed blocks.

Lapse Rates

Fifty-two percent of companies with open blocks reported lapse rates ranging from 6% to 10% for 2022. Companies with open blocks reported an average lapse rate of 11%, while those with closed blocks reported an average lapse rate of 16%.

2022 Observed Claims Trend

The observed claims trend for 2022 averaged 6% for 1992 standardized plans and 9% for 2010 plans.

Underwritten Applications

On average, 39% of all Med Supp applications received in 2022 went through the underwriting process. About 76% of underwritten applications were approved and placed, while 16% were declined.

Processing Time for Underwritten Applications

Excluding incomplete or withdrawn apps and automated or straight-through processing business, the average turnaround time for underwritten apps was five calendar days in 2022. On average, companies will keep an application open for 37 calendar days to obtain a requirement before closing it due to incomplete information.

Automated Underwriting Systems

For the purpose of this survey, an automated underwriting (AU) platform was defined as a system used to make decisions on underwritten, web-based applications without human involvement. Of the 27 companies, 12 currently use an AU system and four companies plan to implement a system within the next 24 months.

Claims Metrics

In 2022, participating companies received 172.5 million Medicare Supplement claims. Companies with open blocks account for 99% of the total claims received, while companies with only closed blocks account for 1%. On average it takes about six days from the day a claim is received to the day a decision is made. The length of time to make a claim determination ranged from one day to 30 days.

Auto-Adjudication of Claims

On average, 90% of a company’s claims are auto-adjudicated, ranging from 67% to 99%.

Claims Fraud

Of the 29 companies, 23 (79%) identify claims fraud in‑house, while the rest use a vendor. About a third of the participating companies saw a change to the number of fraudulent claims in 2022 when compared to 2021. One company reported a decrease, while eight said the number of fraudulent claims increased. Almost 90% monitor durable medical equipment and nearly 70% monitor billing and excessive charges.

Distribution Channels

Of the 27 respondents, 25 (93%) sell Med Supp through independent agents and more than half (59%) sell direct-to-consumer (D2C). Eight companies utilize captive agents to sell Med Supp, while 11% mentioned other distribution methods such as in‑house salaried call center agents and senior private exchanges.

On average, independent agents account for 75% of the Med Supp premium sold in 2022, while captive agents account for 9%. The percentage of premium from D2C sales averaged 14%, and ranged from 2% to 19%.

Seventeen companies reported that more than 75% of their Med Supp sales came from an independent agent. Most companies using D2C, captive agents, or other distribution channels, reported less than 25% of their sales premium came from those methods.

If you have any questions about our summary report, please reach out to me – or let me know if you'd like to participate in next year’s industry survey!

Download the PDF version for a list of participating companies and more information about the survey questionnaires.