Buying Supplemental Insurance Can Be Hard For Younger Medicare Beneficiaries
By Susan Jaffe
Kaiser Health News, February 3, 2016
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 people… 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 industry’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 America’s Health Insurance Plans.
Older adults are “super price-sensitive” and raising premiums “would basically price them out of being able to get the Medigap protection they want,” said Goff.
By Don McCanne, M.D.
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 “Improved” in an “Improved Medicare for All” 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?