Individual Supplemental Health Insurance Market produces $9.05 billion in premium
The supplemental health insurance market continues to steadily grow, primarily due to the increase in the size of the Medicare population. Our Future of Medicare Supplement white paper shows that the Medicare Eligible population is expected to grow from 68 million in 2024 to 80.3 million by 2033.
Most seniors choose to either enroll in a Medicare Advantage plan or to stay in traditional Medicare and purchase a Medicare Supplement plan. But even with those products in place, many insurance gaps still remain. For example, many Medicare Advantage plans use cost-sharing features like co-payments and deductibles to reduce monthly premiums. As another example, the pairing of traditional Medicare and Medicare Supplement does not include the dental coverage that Baby Boomers have become accustomed to receiving.
There are a variety of different types of supplemental health insurance plans available to fill those gaps:
Hospital Indemnity
Critical Illness
Short-Term Care
Dental
Accident
These products can be sold in the years leading up to age 65, during the sale of a Medicare insurance product, and after the sale of a Medicare product. Doing so results in lower total customer acquisition costs and higher lifetime value for the carrier and distributor.
Data shows that the individual Supplemental Health insurance market boasts 22 million policyholders and earned $9.05 billion in premium at year-end 2023. Note that these amounts are specific to the “individual” market and exclude group and worksite products, and that most, but not all, of these policyholders are seniors.
Loss ratios for these products are typically much lower than Medicare Advantage and Medicare Supplement products. These lower loss ratios lead to more robust profit margins and allow room for carriers to pay higher first year commission rates to agents.
Do you already have Medicare products in your portfolio and are looking to provide other products for your distribution to sell?
Carriers and distributors are expanding their portfolios to offer these Supplemental Health products, and we are projecting that this market will continue to grow. See the map below, showing the target market population (age 50-80) by state.
Have you considered expanding your portfolio of Supplemental Health & Life products, but aren’t sure where to begin?
Our free Product Essentials Guides can help. Each report provides a big-picture view of the structure and features of each product. Additionally, our Market Projection Reports are now available for purchase in our online store. These reports are designed to quickly get you up to speed on the opportunity in each market. The reports illustrate key competitors, profit margins, and market outlooks.
We currently offer reports for Hospital Indemnity, Critical Illness, Short-Term Care, Accident and Dental.
Send us a note with your questions and needs, or to find out more!
