Medicare Supplement Market Analysis
The Future of Medicare Supplement: Why Medigap Is Growing Again
After years of losing ground to Medicare Advantage, Medicare Supplement enrollment has returned to growth. Here is what the data shows — and what it means for your coverage decision.
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Source note: According to Telos Actuarial’s 2026 Medicare Supplement market projection, which combines Medicare Trustees, NAIC, CMS, and public-company data with Telos’s own actuarial analysis. Historical enrollment figures reflect Telos’s analysis of NAIC and CMS data. Future enrollment and premium values are Telos projections, not CMS forecasts or guaranteed outcomes.
Medigap Enrollment Returns to Growth
Medicare Supplement enrollment reached approximately 14.392 million policies in 2025, representing annual growth of about 1.7% and a Medicare penetration rate of 21.0%, according to Telos Actuarial’s 2026 market projection. After a period of stagnation, the market is expanding again.
| Year | Policies in force | Medicare penetration |
|---|---|---|
| 2025 | 14.392M | 21.0% |
| 2027(proj.) | 14.637M | 20.4% |
| 2030(proj.) | 14.960M | 19.6% |
| 2035(proj.) | 15.178M | 18.9% |
Source: Telos Actuarial 2026 Medicare Supplement Market Projection. Enrollment figures represent Telos’s analysis of NAIC and CMS data. Future values are Telos projections, not guaranteed outcomes.
Why Medigap Can Grow in Policies While Losing Market Share
The projection table shows a seeming contradiction: Medigap is projected to gain hundreds of thousands of policyholders through 2035, yet its Medicare penetration rate is expected to fall from 21.0% to 18.9%. How can both be true?
The answer is that the total Medicare population is growing faster than Medigap enrollment. Roughly 40 million Americans are expected to turn 65 during the next decade, according to Telos Actuarial’s 2026 projection. As the Medicare-eligible population expands, Medigap can add policyholders in absolute terms while representing a smaller share of a much larger total.
This distinction matters for consumers. A shrinking market share does not mean Medigap is disappearing or becoming less viable. It means Medicare Advantage is capturing a larger portion of new enrollees — while Medigap continues to serve millions of beneficiaries who value predictable costs and unrestricted provider access.
Plan G and Plan N Now Dominate New Medigap Enrollment
The composition of Medigap enrollment has shifted dramatically over the past decade. Plans G and N have moved from a minority of the market to its overwhelming majority.
Share of Medigap Covered Lives
| Year | Plan G + N share |
|---|---|
| 2016 | 19.2% |
| 2025 | 57.6% |
Telos Actuarial 2026 Medicare Supplement Market Projection, analysis of NAIC data.
Share of Recently Issued Policies
| Year | Plan G + N share |
|---|---|
| 2016 | 31.6% |
| 2025 | 86% |
Telos Actuarial 2026 Medicare Supplement Market Projection.
Among policies issued in recent years, Plans G and N represent approximately 86% of new Medigap business, according to Telos Actuarial’s 2026 projection. This concentration reflects the impact of the Medicare Access and CHIP Reauthorization Act of 2010 (MACRA), which prohibited the sale of first-dollar coverage plans to newly eligible Medicare beneficiaries starting in 2020.
Plan G covers all Medicare-approved costs except the Part B deductible. Plan N covers the same costs but requires a copay of up to $20 for office visits and up to $50 for emergency room visits that do not result in inpatient admission, and does not cover Medicare Part B excess charges. The tradeoff is typically a lower monthly premium for Plan N.
Popularity does not determine the right choice for any individual. The better plan depends on your specific providers, how often you use specialist care, whether your doctors accept Medicare assignment, and the premium difference in your area. A licensed broker can compare current rates for both plans side by side.
Plan N Is Growing Faster Than Plan G
Within the G/N segment, Plan N is gaining share. According to Telos Actuarial’s 2026 projection, Plan N’s share of recently issued G/N business grew from approximately 14.6% in 2022 to 17.8% in 2025.
In absolute terms, Telos projects recent-cohort growth of approximately 340,000 policies (+13%) for Plan G and approximately 130,000 policies (+27%) for Plan N. Plan N is growing faster on a percentage basis, though Plan G remains the larger plan by volume.
The growth in Plan N likely reflects premium sensitivity. As Medigap premiums have risen, more consumers are weighing the cost-sharing tradeoffs of Plan N against the predictability of Plan G. Whether that tradeoff makes sense depends on individual circumstances.
These are Telos Actuarial projections based on NAIC data analysis. Actual enrollment outcomes will depend on future market conditions, carrier pricing decisions, and regulatory changes.
The Coming Medicare Demographic Wave
Approximately 40 million Americans are expected to turn 65 during the next decade, according to Telos Actuarial’s 2026 projection. This demographic wave is the primary driver of Medicare enrollment growth and will shape both the Medicare Advantage and Medigap markets through 2035.
For consumers approaching 65, this context matters. The Medicare Supplement market is not contracting — it is growing, and the product landscape is more standardized than it has ever been. Plans G and N now represent the clear mainstream choices for newly eligible beneficiaries who choose Original Medicare.
The enrollment decision at 65 carries long-term consequences. Choosing Original Medicare with a Medigap policy during your Initial Enrollment Period typically means you can enroll without medical underwriting. Waiting, or starting with Medicare Advantage and switching later, may require underwriting in most states.
What Rising Premiums Mean for the Market
Telos Actuarial’s 2026 projection shows average annual Medigap premiums rising from $2,914 in 2025 to a projected $4,332 by 2035. These are Telos projections, not guaranteed outcomes. Actual premiums depend on carrier pricing decisions, claims experience, and regulatory approvals in each state.
Premium growth is one reason Plan N has gained share — its lower base premium appeals to cost-sensitive consumers willing to accept limited cost sharing. It is also one reason High-Deductible Plan G has attracted attention as an alternative for consumers who want Original Medicare’s provider access at a lower fixed monthly cost.
If your Medigap premium has increased, you may have options. In most states, you can apply for a different Medigap policy at any time, though medical underwriting may apply. Some states have birthday or anniversary rules that allow switching without underwriting during a limited window each year.
Frequently asked questions
Is Medicare Supplement going away?
No. Medicare Supplement enrollment reached approximately 14.392 million policies in 2025 and is projected by Telos Actuarial to grow to approximately 15.178 million by 2035. While Medicare Advantage has captured a larger share of new enrollees, Medigap continues to serve millions of beneficiaries and remains a fully supported part of the Medicare system.
Why is Medigap’s market share declining if enrollment is growing?
Because the total Medicare population is growing faster than Medigap enrollment. Roughly 40 million Americans are expected to turn 65 during the next decade, according to Telos Actuarial’s 2026 projection. Medigap can add policyholders in absolute terms while representing a smaller percentage of a much larger Medicare population.
Why do Plan G and Plan N dominate new Medigap enrollment?
The Medicare Access and CHIP Reauthorization Act of 2010 (MACRA) prohibited the sale of first-dollar coverage Medigap plans to newly eligible Medicare beneficiaries starting in 2020. This effectively channeled new enrollees toward Plans G and N, which do not cover the Part B deductible. According to Telos Actuarial’s 2026 projection, G and N now represent approximately 86% of recently issued Medigap policies.
Is Plan N better than Plan G?
Neither plan is universally better. Plan G covers all Medicare-approved costs except the Part B deductible. Plan N has a lower premium but requires copays of up to $20 for office visits and up to $50 for ER visits that do not result in admission, and does not cover Medicare Part B excess charges. The right choice depends on your providers, how often you use specialist care, and the premium difference in your area.
What is High-Deductible Plan G?
High-Deductible Plan G (HDG) provides the same benefits as standard Plan G after you meet the federally set annual deductible ($3,050 for 2027, set annually by CMS). The lower monthly premium can appeal to consumers who want Original Medicare’s provider access and are willing to retain more cost-sharing risk. HDG is not right for everyone — it requires careful consideration of your health situation and financial reserves.
Can I switch Medigap plans after I enroll?
In most states, you can apply for a different Medigap policy at any time, but medical underwriting may apply outside of guaranteed-issue periods. Some states have birthday or anniversary rules that allow switching without underwriting during a limited annual window. The rules vary significantly by state.
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