Medigap Q & A

[LeBeau]

Medigap-Questions and Answers


1.   Q: How many states already extend Medigap coverage to individuals under 65?

A: Medigap for Medicare beneficiaries under age 65 is available in 31 states.  Thirteen states have passed Medigap legislation since 1998.

The 31 states are: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Washington, Wisconsin.

2.   Q: What state legislation is there right now to support?

A: Arizona: House bill 2132  Passed
    Georgia: Senate bill 316 Passed
    South Carolina: currently working through legislative channels for bill
    Tennessee: State Department of Insurance will be putting out a regulation in the spring with a 30 day comment period in support of beginning Medigap coverage there for people under age 65.

3.   Q: What does state Medigap legislation do?

A: State legislation allows Medicare beneficiaries under 65 years of age who are disabled or who have kidney failure the ability to purchase the same Medigap insurance that is available to those over 65 years of age.

4.   Q: Why is this legislation needed if insurance companies can already provide Medigap policies for people under age 65 if they choose to do so?

A: There are few companies that offer Medigap policies for people under age 65 with kidney failure. These policies are usually only available to those who have lost their commercial insurance at no fault of their own which is a very limited circumstance.  

5.   Q: Would making Medigap insurance available to Medicare beneficiaries under age 65 cost the state money?

A: No, in fact it would save the state money because many of these beneficiaries would no longer end up on Medicaid.  Currently, the Medicare program covers 80% of treatment cost and requires beneficiaries to cover the remaining 20% plus deductibles and co-pays, which most do with secondary coverage.  However, because many people do not have secondary coverage and cannot afford Medicare deductibles and co-pays, they often turn to the Medicaid program to cover these costs.  Should Medigap legislation be enacted into law, fewer people will enter the Medicaid program, resulting in savings for the state and protecting taxpayers from higher program costs.

6.   Q: Won’t this drive up premiums across the board for all beneficiaries?

A: No.  According to three separate studies of the states who offer Medigap for under age 65, extending a six-month open enrollment period to the under-65 population has had little effect on premium levels and resulted in no disruption in the Medigap market.  What’s more, the number of people with ESRD under age 65 is small, and only 1% of all Medigap policies would be issued to under 65 ESRD beneficiaries.  In addition, if Medigap was available for all disabled Medicare beneficiaries in the state who are under age 65, an increase in competition from Medigap plans, against private Medicare Advantage (MA) plans, could help reduce premiums.

Studies: (1) Expansion of Medigap to Under-65 Medicare Beneficiaries Could Increase Access at Little Cost, Abt Associates, 1998. (2) Medigap Expansion Study, Jessica Cabness, PhD and Richard Smith, PhD, University of South Florida St. Petersburg, February 2009, (3) Health Coverage Access Options for People with End Stage Renal Disease, The Moran Company, March 2009.

7.   Q: Would this legislation improve access to kidney transplantation?

A: Yes.  Many kidney patients who do not currently have secondary coverage are often unable to access critical services – like kidney transplants – because of the upfront payments that are required,  Should this legislation be enacted into law, patients would be able to purchase the Medigap coverage they need to be able to afford a kidney transplant.  This means a tremendous clinical benefit to the patient and cost savings to the state.

8.   Q: Why should states do this?

A: Joining the 31 other states that have already enacted similar legislation would allow those under 65 with kidney failure or other disabilities to purchase Medigap insurance and access needed treatments and services, including kidney transplants, without cost being a barrier.  In addition, far fewer people would enter the Medicaid program, resulting in savings.  

9.   Q: Isn’t this a way to ensure dialysis providers get more money for their services?

A: This legislation could actually decrease the use of kidney failure services (dialysis) in the state.  A person diagnosed with ESRD must receive dialysis treatment or a transplant in order to continue living.  Should this legislation be enacted into law, more people will be able to receive a transplant and would no longer need dialysis treatment. Transplant costs are significantly lower than the costs for ongoing dialysis.

10.   Q: What would this mean for Medicare beneficiaries under age 65 who can’t currently buy Medigap coverage?

A: People who lack coverage may not follow through with doctor appointments or other services requiring them to pay the remaining 20% not covered by Medicare Part B.  This could cause people to be hospitalized or use ER services due to emergencies that could have been delayed or avoided with better primary care.  People with kidney failure who are not transplanted remain on expensive dialysis treatment forever where as people who receive transplants often return to the workforce.  In short, Medigap insurance for kidney failure patients and others with disabilities under age 65 would ensure better care and lower costs to the state’s health care system.