More Changes to Medicare

As of June 1, people shopping for Medicare supplement insurance, or Medigap coverage, have some new options.  Insurers have started selling two new lower-cost Medigap policies and stopped offering four others.  At the same time the federal government, which regulates Medigap benefits, started requiring plans to cover at least a portion of hospice costs. 

Medicare doesn’t pay for everything.  Because patients are required to pay a portion of some of their bills, about 89% of the 47 million people with Medicare have some form of supplemental health insurance.  Many opt for a federally subsidized private Medicare Advantage plan or they receive supplemental coverage from a former employer.  Close to one-fifth purchase a Medigap policy. 

These plans are sold by private insurers and offer standardized menus of benefits.  As with most insurance policies, the more benefits you want, the higher the premium. 

Whether the recent changes to these plans have an impact on you depends, in part, on when you purchased your Medigap policy.  If you enrolled before June 1, you can hold onto your policy – even if it’s no longer being sold – and your benefits won’t change.  Consumers are not required to purchase a new plan. 

The changes apply only to Medigap plans sold after June 1.  On that date, insurers stopped selling some of the plans partly because those plans offered some benefits now covered under original Medicare or Part D prescription-drug plans. 

The new options charge lower premiums than most Medigap plans, but consumers must pay a higher share of the cost for various services, such as paying half of the $1,100 deductible for hospitalizations, or paying $20 for each doctor’s visit and $50 for emergency services. 

Regardless of which Medigap policy you choose, if you are buying now, you will receive a new benefit covering some portion of the cost of drugs and respite care that are part of hospice care.  The hospice benefit isn’t available to people who keep their existing plans, so some consumers may be tempted to switch plans.  But there are potential downsides to doing so. 

In many states, insurers are required to issue Medigap policies only under certain circumstances, such as when someone age 65 or older applies for coverage within six months of enrolling in Medicare Part B, which covers doctors’ visits.  So someone who tries to switch plans at a later point may be denied coverage or charged a higher premium due to existing health problems or advancing age. 

For more information on Medigap plans, visit medicare.gov and the Medicare Rights Center’s site (medicareinteractive.org).  You can also contact your State Health Insurance Assistance Program or your state Department of Insurance. 

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