Lower Spending Drives Senior Satisfaction with Medigap Policies

Seniors who choose Medigap policies have high rates of satisfaction with their choice, particularly due to reduced out-of-pocket healthcare spending, according to a survey that America’s Health Insurance Plans (AHIP) commissioned.

“More than 14 million Americans rely on Medicare supplemental insurance, and more than a third of seniors with a traditional Medicare plan choose to enroll in a Medicare supplemental plan because they offer enhanced protection, consistent coverage, and access to high-quality care,” AHIP asserted in a blog post when the organization released its report.

Global Strategy Group conducted an online survey for AHIP from January 14 to January 20, 2021. The survey had 500 American, senior participants who were covered by traditional Medicare and a Medigap policy.

Medigap beneficiaries reported strong satisfaction with their benefits, their Medigap policies customer service, and other aspects of their coverage.

Beneficiaries were slightly more satisfied with their Medigap policies than with their traditional Medicare coverage, with 89 percent expressing extremely high or somewhat high satisfaction with their Medicare supplemental plan while 87 percent were very or somewhat satisfied with their traditional Medicare coverage.

In 2019, the last time that AHIP conducted this survey, 87 percent of beneficiaries felt very or somewhat satisfied with traditional Medicare, and 86 percent felt the same way about their Medicare supplemental coverage.

Only around two percent of Medigap beneficiaries have characterized the value of their Medigap policy as “poor” in this biennial survey over the course of the past four years. Meanwhile, the percentage that would characterize the value as “excellent” or “good” has hovered around 77 to 79 percent.

More specifically, the seniors appreciate that their Medigap policy covers hospital expenses not covered by traditional Medicare (79 percent) and likewise that it covers physician expenses not covered by traditional Medicare (69 percent).

Beneficiaries were most dissatisfied with the affordability of their Medigap policy. Although almost three-quarters of beneficiaries were extremely, very, or somewhat satisfied and 11 percent had no opinion, 15 percent found their Medigap policy’s affordability was “poor.”

But 94 percent of seniors were “extremely/very satisfied” or “somewhat satisfied” with the services and benefits that their Medigap policies covered and 93 percent were “extremely/very satisfied” or “somewhat satisfied” with the enrollment and renewal processes.

Medigap policy beneficiaries seemed to be ambivalent about their payer’s member engagement. Seventeen percent said that they were neither satisfied nor dissatisfied with their policy’s responsiveness or the communications that they had received from their payer.

More than nine in ten Medigap beneficiaries “strongly” or “somewhat” agreed that Medigap enabled them to see their providers without concerns about out-of-pocket healthcare spending. Positive sentiment around this element of Medigap coverage has grown over the past four years but has not dipped below 92 percent satisfaction in the biennial surveys.

While 15 percent of seniors may not have been completely satisfied with the affordability, 44 percent strongly agreed and 40 percent somewhat agreed with the statement: “it provides good value for my money and peace of mind at an affordable cost” and 53 percent strongly agreed that it saved them thousands of dollars in out-of-pocket healthcare spending.

Indeed, separate studies have indicated that seniors choose Medigap policies for budgeting reasons.

Seniors acknowledged that without their Medigap policies they would have financial concerns about covering their healthcare needs. Primarily, they would be worried about covering co-pays and co-insurance, losing their financial security, and covering deductibles. More than half of seniors worried about foregoing routine or preventive care without their Medigap policy.

If they were to lose their Medigap policy, most of the respondents (32 percent) said that they would rely solely on Traditional Medicare to cover their medical expenses, although 26 percent said they would turn to Medicare Advantage. Affordability would be the driving factor in that decision for 34 percent of seniors.

Before they settled on a Medigap policy, 36 percent of seniors somewhat or seriously considered a Medicare Advantage plan, where costs can be more predictable. However, the span of healthcare providers available through a Medigap policy was one of the main factors that drew them to Medigap policies, along with lower out-of-pocket healthcare spending and the affordability of routine care.

“Medicare supplemental coverage brings seniors a very high level of satisfaction because it allows seniors to get the care they need from the doctors they prefer at an out-of-pocket cost they can afford,” Winthrop Cashdollar, executive director of product policy at AHIP, said the blog post that attended the report.  “Seniors value highly the peace of mind that their Medigap coverage provides them.”

Medigap policies have seen stable enrollment from 2015 through 2018, with Medigap Plan G experiencing a surge in recent years.