Enrollment in Medigap plans increased by 300,000 in the last year, from 9.9 million in December 2011 to 10.2 million in December 2012, according to new data from the health insurance industry.
America's Health Insurance Plans also said the fastest-growing Medigap plans include beneficiary cost-sharing.
AHIP touted its new findings that Medigap coverage is a "vital lifeline to more than 10 million Medicare beneficiaries" as it urged policymakers to avoid cutting benefits or enacting changes that "would harm the millions of seniors and people with disabilities who rely on Medigap coverage."
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President Obama's budget proposal for 2014 includes a new $2.9 billion tax on beneficiaries who choose Medigap policies with low cost-sharing requirements. The Medicare Payment Advisory Commission has recommended a 20 percent tax on these policies.
But AHIP argued that "adding a new tax on Medigap would increase costs for vulnerable beneficiaries who rely on the predictability and financial protection Medigap provides."
AHIP's new Medigap report is based on data from the National Association of Insurance Commissioners, which includes data from 262 carriers representing virtually the entire Medigap marketplace.
The report also found that enrollment in Plan N, with cost-sharing amounts grew by 35 percent in 2012 to roughly 360,000 enrollees. Plan L — which covers 75 percent of Part A and Part B cost-sharing and includes a $2,400 out-of-pocket limit — grew by 47 percent in 2012 to 103,000 enrollees.
Plan F grew by 10 percent in 2012, or 450,000 enrollees, and covered the largest share of Medigap policyholders. Plan C had the second highest share. Plans C and F cover 100 percent of the deductibles and coinsurance not covered by Medicare.
In its report, AHIP argued that Medigap helps cover significant out-of-pocket costs that aren't covered by Medicare and provides stability for vulnerable populations.
A survey last year by AHIP found that nine out of 10 seniors are satisfied with their Medigap coverage, and more than 9 in 10 would recommend Medigap to a friend or relative.
Earlier this year, the group's lobbying efforts against a proposed cut to Medicare Advantage plans paid off when the Centers for Medicare & Medicaid Services scrapped the plan in April.
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