After several years of decline, Medicare Supplement policies are on the rise again.

New research from Maine-based Mark Farrah Associates (MFA) indicates that leading insurance companies plan to rely on Medicare Supplement policies, also called Medigap and Med Supp, as a way to attract senior clients in 2009.

Medicare Supplement policies, which have been around for more than 40 years, are designed to bridge the gaps in traditional Medicare coverage. After several years of about 3 percent annual membership declines, according to MFA research, Med Supp plans enjoyed a slight increase for year-end 2008-a growth of 0.6 percent total covered lives.

As of December 31, 2008, more than one-fifth (22 percent) of all Medicare eligible beneficiaries, or about 9.6 million individuals, were enrolled in a Medigap plan. Almost 200 companies offer Medicare Supplement products, with eight companies insuring 59 percent of total covered lives.

All three of the top Med Supp companies, UnitedHealth, WellPoint, and Mutual of Omaha, experienced enrollment growth from 2007 to 2008. More than 65 percent of all seniors were enrolled in either Medicare Supplement or Medicare Advantage products as of December.

In the report "Medicare Supplement Revival," MFA analyzes the Medigap market using state-by-state membership, premiums, claims, and loss ratios for Medicare Supplement plans nationwide. This data is filed with the National Association of Insurance Commissioners and is aggregated and analyzed exclusively by MFA.

The full text of "Medicare Supplement Revival" is available on the Healthcare Business Strategy library at the MFA Web site.