Kaiser Health News
February 3, 2016
Buying Supplemental Insurance Can Be Hard For Younger Medicare Beneficiaries
By Susan Jaffe
Federal law requires companies to sell Medigap plans to any Medicare
beneficiary aged 65 or older within six months of signing up for Part B,
which covers doctor visits and other outpatient services. If they sign
up during this guaranteed open enrollment, they cannot be charged higher
premiums due to their medical conditions.
But Congress left it to states to determine whether Medigap plans are
sold to the more than 9 million people younger than 65 years old who
qualify for Medicare because of a disability.
In 20 states and the District of Columbia, home to more than 2 million
disabled Medicare beneficiaries, insurers are not required to sell
Medigap policies to customers under 65. In other states, insurers cannot
reject applicants if they enroll when they first join Medicare.
Companies in some states, including Virginia, can still charge higher
premiums to younger beneficiaries or those with kidney disease, often
making policies unaffordable.
In California, Massachusetts and Vermont, insurers are required to sell
Medigap policies to anyone with Medicare, except to peopleâ¦ who are
under 65 and have end stage renal disease.
The federal health law provides no relief for these younger Medicare
beneficiaries. One of its most popular provisions prohibits
discrimination by insurance companies in the non-Medicare market based
on pre-existing conditions or age, but the law is silent on Medigap.
Prospects for a nationwide solution are dim because expanding Medigap
coverage could lead to these beneficiaries with disabilities receiving
more care and raising costs for the Medicare program. Congress is
looking for strategies to curb Medicare spending, not increase it.
The health insurance industryâ™s trade association opposes expanding
Medigap to include all Medicare beneficiaries younger than 65 with end
stage renal kidney disease. Since treatment for those patients can be so
expensive, adding them could increase Medigap premiums for everyone,
said Cindy Goff, a vice president at Americaâ™s Health Insurance Plans.
Older adults are âœsuper price-sensitiveâ and raising premiums
âœwould basically price them out of being able to get the Medigap
protection they want,â said Goff.
Comment by Don McCanne
It has long been recognized that the benefits of the Medicare program
are inadequate, leaving too many exposed to financial hardship and
impaired access due to financial barriers. Some are protected with
retiree health benefit plans or with backup by the Medicaid program, but
for others, the private Medigap insurance plans were developed. This
article shows that the rules for Medigap plan eligibility may still
leave vulnerable those who quality for Medicare based on a disability -
some of the most neediest of Medicare beneficiaries.
Medigap plans are a poor solution for the inadequacies of Medicare
coverage. They are overpriced when considering the benefits received,
and are usually unaffordable for those who do not quite qualify for dual
Medicare/Medicaid coverage. They add significantly to the administrative
complexity of administering Medicare, wasting funds that would be better
spent on health care. It would be far more efficient to roll the Medigap
benefits into the Medicare program. That would be an important component
of the âœImprovedâ in an âœImproved Medicare for Allâ which could
be the basis of a single payer national health program.
Congress has left to the states decisions on whether or not private
insurers selling Medigap plans must do so on a guaranteed issue basis
(plans must be sold to any applicant regardless of medical status), and
also if the plans can be subject to medical underwriting (charging
higher premiums for those with greater health needs). Just as we see
with Medicaid, states under the rule of heartless politicians frequently
decide to turn these disabled patients over to the marketplace - further
exposing them to a life of physical suffering and financial hardship.
Generally, individuals must purchase their Medigap plans soon after
enrolling in Medicare. This applies to both those over 65 and those
under 65 with disabilities. The high premiums charged for these plans
are one of the many reasons that individuals decide to forgo initial
enrollment and then become ineligible later on when medical needs may be
even greater. This is yet one more example of a policy that prevents
individuals from having access to coverage when our national policies
should be designed to achieve the opposite - ensuring enrollment of
absolutely everyone, throughout life.
Medigap is another bad idea brought to us by the private insurance
industry. It works well for insurers, but not so well for too many
patients. We should dump it along with the rest of the private insurance
industry and establish our own equitable, publicly-funded and
publicly-administered single payer system. How can we leave so many of
our disabled residents hanging like we do?
Wednesday, February 3, 2016
Kaiser Health News