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Kaiser Family Foundation Report

A report recently issued by the Kaiser Family Foundation, “Medigap Enrollment and Consumer Protections Vary Across States” (July 2018), “provides an overview of Medigap enrollment and analyzes consumer protections under federal law and state regulations that can affect beneficiaries’ access to Medigap. In particular, [the] brief examines implications for older adults with pre-existing medical conditions who may be unable to purchase a Medigap policy or change their supplemental coverage after their initial open enrollment period.”

After describing Medigap enrollment rights available under federal law (in other words, rules governing when issuers of such policies must sell them to individuals), the Report highlights the variance in state laws, which can go further than the minimum federal enrollment standards to provide additional enrollment rights.  Among other findings, the Report notes that “[o]nly four states (CT, MA, ME, NY) require either continuous or annual guaranteed issue protections for Medigap for all beneficiaries in traditional Medicare ages 65 and older, regardless of medical history.” The Report goes on to note that “[i]n all other states and D.C., people who switch from a Medicare Advantage plan to traditional Medicare may be denied a Medigap policy due to a pre-existing condition, with few exceptions, such as if they move to a new area or are in a Medicare Advantage trial period.” 

In addition, “[o]nly 5 percent of traditional Medicare beneficiaries under age 65 had Medigap in 2015—considerably lower than the shares in older age brackets [citation omitted]. The low enrollment in Medigap by beneficiaries under age 65 is likely due to the lack of federal guarantee issue requirements for younger Medicare beneficiaries with disabilities […] and higher rates of Medicaid coverage for people on Medicare with disabilities who tend to have relatively low incomes.”  As discussed in a CMA  Alert from October 2016, state law varies considerably with respect to extending Medigap rights to individuals under 65.

The Report also highlights that Medigap enrollment rights are considerably more limited than the annual opportunities Medicare beneficiaries have to get in and out of private Medicare Advantage and Part D plans, and that those who wish to change from a Medicare Advantage plan to Medigap coverage may be disadvantaged:

Medigap is not subject to the same federal guaranteed issue protections that apply to Medicare Advantage and Part D plans, with an annual open enrollment period. As a result, in most states, medical underwriting is permitted which means that beneficiaries with pre-existing conditions may be denied a Medigap policy due to their health status, except under limited circumstances.

Federal law requires Medigap guaranteed issue protections for people age 65 and older during the first six months of their Medicare Part B enrollment and during a “trial” Medicare Advantage enrollment period. Medicare beneficiaries who miss these windows of opportunity may unwittingly forgo the chance to purchase a Medigap policy later in life if their needs or priorities change [citation omitted]. This constraint potentially affects the nearly 9 million beneficiaries in traditional Medicare with no supplemental coverage; it may also affect millions of Medicare Advantage plan enrollees who may incorrectly assume they will be able to purchase supplemental coverage if they choose to switch to traditional Medicare at some point during their many years on Medicare.

As the Center has noted elsewhere, recent statutory and regulatory changes have served to both favor Medicare Advantage enrollment and undermine Medigaps as an option for Medicare beneficiaries. Rights to purchase Medigap supplemental insurance policies should be expanded to people under 65 and to include ongoing access for all in order to provide real,  meaningful choices for all Medicare beneficiaries.  As discussed below, a Congressional bill has recently been introduced that would vastly improve this situation.

Bill Introduced to Strengthen Medigap Access and Protections

Today, July 18, 2018, , Representative Sandy Levin (D-MI), the Ranking Member of the Ways and Means Health Subcommittee, introduced the “Medigap Consumer Protection Act of 2018” (see press release, bill text, and summary).

As noted in the press release issued by Congressman Levin’s office, among other things, this Bill would:

  • “Strengthen federal consumer protections to ensure that beneficiaries with disabilities and end-stage renal disease can purchase a Medigap policy without being denied coverage or subjected to higher premiums based on their health status or pre-existing conditions.
  • Extend access protections to other beneficiaries, including individuals in Medicare Advantage who wish to switch back to traditional Medicare.
  • Require the Secretary of HHS to conduct a comprehensive overhaul of the Plan Finder website to ensure that beneficiaries have access to complete and understandable information when comparing enrollment options.
  • Restore access to the two most popular Medigap policies (Plans C and F), which are set to be eliminated for beneficiaries who enroll in Medicare after January 1, 2020.”

If enacted, this Bill would be an important step toward improving beneficiary choice regarding how they wish to access their Medicare coverage, and leveling the playing field between traditional Medicare and Medicare Advantage. 

July 19, 2018 – D. Lipschutz

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