Medicare complement insurance coverage, referred to as Medigap, helps cowl Medicare Half A and Half B cost-sharing necessities, together with deductibles, copayments, and coinsurance. Medigap insurance policies, that are bought by non-public insurance coverage corporations, are a key supply of supplemental protection for folks in conventional Medicare with out employer-sponsored retiree advantages or Medicaid (Medigap doesn’t work with Medicare Benefit). In 2022, 12.5 million Medicare beneficiaries, or 42% of all conventional Medicare beneficiaries, had a Medigap coverage. Nonetheless, federal necessities that prohibit using medical underwriting by insurers when issuing Medigap insurance policies – referred to as assured subject protections – are restricted, which implies it could be exhausting or inconceivable for folks with pre-existing situations, like bronchial asthma or most cancers, to get a Medigap coverage, outdoors of specified time intervals. (For extra info on the fundamentals of Medigap, see Key Information About Medigap Enrollment and Premiums for Medicare Beneficiaries).
Federal regulation requires Medigap insurers to subject Medigap insurance policies with out medical underwriting throughout a one-time, six-month Medigap open enrollment interval for beneficiaries ages 65 and older when first enrolling in Medicare Half B, and for sure qualifying occasions, resembling throughout a Medicare Benefit trial interval. However federal regulation permits Medigap insurers to make use of medical underwriting to both deny Medicare beneficiaries a coverage or cost larger premiums outdoors of assured subject intervals. Federal regulation additionally doesn’t require Medigap insurers to subject Medigap insurance policies to individuals who select to disenroll from a Medicare Benefit plan, besides beneath restricted circumstances, or to beneficiaries beneath age 65 who qualify for Medicare because of a long-term incapacity. Some lawmakers have proposed to strengthen federal assured subject protections for the Medigap market, although doing so might impression premiums.
This subject temporary analyzes federal and state assured subject guidelines and the way they impression beneficiaries’ entry to Medigap, together with the implications for Medicare beneficiaries with pre-existing situations and people beneath age 65 with long-term disabilities. This temporary additionally explores a just lately finalized rule: Nondiscrimination in Well being Packages and Actions concerning Part 1557 of the Inexpensive Care Act which will have implications for the Medigap market. This evaluation is predicated on KFF assessment and assortment of federal and state insurance coverage rules, insurers’ Medigap purposes, different publicly obtainable info, and KFF evaluation of information from the Facilities for Medicare & Medicaid Providers (CMS) Continual Circumstances Information Warehouse Grasp Beneficiary Abstract File (MBSF), 2022.
Key Takeaways
Federal regulation offers some assured subject protections for Medicare beneficiaries who search to buy a Medigap coverage, resembling throughout the first six months after signing up for Medicare Half B or if their Medicare Benefit plan terminates protection of their space. Nonetheless, in all however 4 states, beneficiaries could also be denied a Medigap coverage if they’ve a pre-existing situation in the event that they select to change from Medicare Benefit to conventional Medicare outdoors the preliminary trial interval or search to buy a Medigap coverage years after enrolling in Medicare.
9 out of ten (90%) Medicare Benefit enrollees ages 65 and older, or 22.4 million folks, should not have assured subject protections to buy Medigap past the preliminary Medicare Benefit trial interval, as of 2022.
The checklist of doubtless deniable medical situations consists of Alzheimer’s illness, bronchial asthma, most cancers, congestive coronary heart illness, diabetes with issues, end-stage renal illness (ESRD), hypertension, limitations of each day actions, stroke and different situations, based mostly on KFF’s assessment of Medigap purposes of main insurers. Candidates can also be charged larger Medigap premiums if they’ve situations resembling diabetes with no issues, bipolar dysfunction, or osteoporosis that’s handled with infusion. The Inexpensive Care Act prohibits insurance coverage corporations from denying protection or charging larger premiums based mostly on pre-existing situations, however doesn’t apply to Medigap insurers.
4 states (CT, MA, ME, NY) require both steady or annual assured subject protections for Medigap for all beneficiaries ages 65 and older, no matter medical historical past. With steady enrollment, insurers are required to subject Medigap insurance policies at any time throughout the 12 months in Connecticut, Massachusetts and New York; in Maine, which has a one-month assured subject interval annually, insurers are required to supply solely Medigap Plan A, which is much less complete than some Medigap plans, resembling Plan G – the preferred coverage in 2023. Minnesota enacted laws to institute annual assured subject protections, that are slated to enter impact on August 1, 2025, although there are indications that implementation could also be delayed.
Thirty-five states require Medigap insurers to subject insurance policies to Medicare beneficiaries ages 65 and older because of sure qualifying occasions, resembling when an applicant has a change of their employer (retiree) protection (29 states) or when beneficiaries lose their Medicaid eligibility (10 states).
Thirty-six states require insurance coverage corporations to supply no less than one type of Medigap coverage to Medicare beneficiaries beneath age 65 with disabilities throughout an preliminary open enrollment interval, no matter medical situations.
The Function of Federal Regulation in Regulating Medical Underwriting within the Medigap Market
Normally, Medigap insurance coverage is state regulated, but additionally topic to sure federal minimal necessities. Medigap was first federally regulated by the Social Safety Incapacity Amendments, additionally known as the “Baucus Amendments,” in 1980, adopted by a second key set of federal rules that have been enacted as a part of the Omnibus Funds Reconciliation Act of 1990 (OBRA-90). That regulation required:
The establishment of a six-month open enrollment interval starting the primary month a beneficiary is enrolled in Medicare Half B, for beneficiaries ages 65 and older
A standardized set of advantages throughout Medigap insurance policies, resulting in 10 commonplace Medigap insurance policies obtainable to beneficiaries. (Three states – Massachusetts, Minnesota, and Wisconsin – have a distinct set of standardized insurance policies.)
Assured plan renewability (with few exceptions)
Minimal medical loss ratio necessities
Limiting the exclusion interval for pre-existing situations to 6 months.
The Medicare Entry and CHIP Reauthorization Act of 2015 (MACRA) made some further modifications to the Medigap market, prohibiting insurers from issuing new insurance policies that cowl the total Half B deductible, making Plans C and F now not obtainable to beneficiaries who turned age 65 on or after January 1, 2020.
Pursuant to the necessities talked about above, federal regulation offers assured subject protections for Medigap insurance policies throughout a one-time, six-month Medigap open enrollment interval for beneficiaries ages 65 and older, which begins the primary month of Medicare Half B protection, and for sure qualifying occasions (Desk 1). Throughout these outlined intervals, Medigap insurers can’t deny a Medigap coverage to any qualifying applicant based mostly on elements resembling age, gender, or well being standing, nor can they differ premiums based mostly on an applicant’s pre-existing medical situations or exclude protection for a pre-existing medical situation (i.e., medical underwriting).
The one-time, six-month assured subject interval is meant to mitigate potential choice points within the Medigap market. Reasonably than ready till they incur excessive well being care prices earlier than buying a Medigap coverage, beneficiaries should typically buy a coverage throughout the preliminary open enrollment interval or danger not having the ability to buy a Medigap coverage later. This additionally has the impact of making certain that the chance pool consists of a mixture of each more healthy and sicker enrollees, which might hold premiums decrease, on common. Nonetheless, as mentioned in additional element beneath, the one-time open enrollment interval additionally has the impact of locking folks out of the Medigap market who won’t be at larger danger of incurring excessive medical bills within the quick time period. This might embody, for instance, a beneficiary who has been enrolled in a Medicare Benefit plan for a couple of years and desires to change to conventional Medicare due to community restrictions in Medicare Benefit, however faces medical underwriting based mostly on having pre-existing situations.
Underneath federal regulation, Medigap insurers could impose a ready interval of as much as six months to cowl providers associated to pre-existing situations if the applicant didn’t have no less than six months of prior steady creditable protection. For qualifying occasions which have assured subject rights, folks ages 65 and older in Medicare typically have 63 days to use for a Medigap coverage.
Beneficiaries with Conventional Medicare and Employer Retiree Protection: Medicare beneficiaries have federally certified assured subject rights to buy Medigap if their employer cancels their retiree protection. Nonetheless, they don’t have assured subject rights to buy Medigap if their retiree protection modifications or in the event that they voluntarily drop retiree protection.
Beneficiaries with Conventional Medicare and Medigap: Federal regulation requires {that a} trial interval applies to Medicare beneficiaries in conventional Medicare who cancel their Medigap coverage once they enroll in a Medicare Benefit plan (this isn’t restricted to only the primary 12 months of enrolling in Medicare). These beneficiaries have time-limited assured subject rights to buy their identical Medigap coverage if, inside a 12 months of first signing up for a Medicare Benefit plan, they determine to disenroll to return to conventional Medicare. Assured subject rights additionally apply if their Medigap insurance coverage firm goes bankrupt or Medigap protection ends by no fault of their very own, or their Medigap insurance coverage firm commits fraud.
Beneficiaries who presently have Medigap should not have federal assured subject protections to change Medigap insurance policies. In addition they should not have assured subject protections in the event that they voluntarily drop Medigap and want to buy a coverage once more later. Nonetheless, beneficiaries could droop Medigap for as much as two years in the event that they turn into eligible for Medicaid, during which case they don’t have any new medical underwriting or ready intervals for pre-existing situations once they restart their Medigap.
Beneficiaries with Medicare and Medicaid: Medicare beneficiaries who’re dually-eligible people, that means they’ve each Medicare and Medicaid have premium and cost-sharing protections by Medicaid. Subsequently, they sometimes don’t want Medigap protections and generally, Medigap insurers can’t promote Medigap insurance policies to folks with Medicaid. If dual-eligible people lose their Medicaid eligibility, they don’t seem to be entitled to a assured subject interval to buy Medigap. Nonetheless, as famous above, this isn’t the case for beneficiaries who had Medigap earlier than changing into eligible for Medicaid, during which case they don’t have any new medical underwriting or ready intervals for pre-existing situations once they restart their Medigap (so long as they didn’t have Medicaid for greater than two years).
Beneficiaries Underneath Age 65: The federally assured one-time, six-month Medigap open enrollment interval doesn’t prolong to beneficiaries who qualify for Medicare beneath age 65. Nonetheless, when these beneficiaries flip age 65, federal regulation requires that they’re entitled to the identical time-limited six-month open enrollment interval for Medigap that’s obtainable to new beneficiaries ages 65 and older. As mentioned beneath, many states have guidelines in place that transcend minimal federal necessities and require insurance coverage corporations to supply no less than one type of Medigap coverage to Medicare beneficiaries beneath age 65 with disabilities throughout an preliminary open enrollment interval, no matter medical situations.
Beneficiaries with Medicare Benefit. Medicare Benefit enrollees with pre-existing situations have restricted alternatives to purchase Medigap insurance policies in the event that they need to change to conventional Medicare. Federal regulation requires that Medigap insurance policies be bought with assured subject rights throughout a specified trial interval for Medicare Benefit plans. This trial interval is throughout the first 12 months adults ages 65 and older enroll in Medicare. Throughout that point, older adults can attempt a Medicare Benefit plan, but when they disenroll throughout the first 12 months, they’ve assured subject rights to buy any Medigap coverage that’s bought of their state.
Medicare Benefit enrollees even have assured subject rights to buy a Medigap coverage to complement protection beneath conventional Medicare if:
their Medicare Benefit plan discontinues protection of their space
they transfer to a brand new space and may now not entry protection from their Medicare Benefit plan
their Medicare Benefit plan is terminated
their Medicare Benefit plan commits fraud.
Exterior of the trial interval and different restricted circumstances, Medicare Benefit enrollees who disenroll and procure protection beneath conventional Medicare might be denied a Medigap coverage if they’ve a pre-existing situation. This consists of Medicare Benefit enrollees who voluntarily depart a retiree well being plan by Medicare Benefit and who search to buy a Medigap coverage. Within the majority of states that enable medical underwriting for Medigap, Medicare Benefit enrollees with pre-existing situations could also be reluctant to change to conventional Medicare if they’re unable to buy a Medigap coverage. It’s because Medigap offers added monetary safety as a complement to conventional Medicare, which doesn’t have an out-of-pocket cap for providers lined beneath Medicare Elements A and B, not like most medical health insurance plans. In distinction, Medicare Benefit plans are required to have an out-of-pocket restrict for Elements A and B.
9 out of ten (90%) Medicare Benefit enrollees ages 65 and older, or 22.4 million folks, are topic to medical underwriting and could also be denied protection in the event that they apply for a Medigap coverage outdoors of the Medicare Benefit trial interval or different particular assured subject intervals, as of 2022 (Determine 1; Appendix Desk 1; see beneath for state-specific info on assured subject guidelines).
The overwhelming majority of Medicare Benefit enrollees don’t reside in one of many 4 states with guidelines in place that require steady or annual rights to buy a Medigap coverage in the event that they select protection beneath conventional Medicare. Solely 10% of Medicare Benefit enrollees ages 65 and older reside in these 4 states, which require insurers to subject Medigap insurance policies with out regard to pre-existing situations, even after their Medicare Benefit trial interval ends. (For extra element on the 4 states, see part beneath: Solely 4 States Require Steady or Annual Assured Situation Protections for Medigap for Individuals Ages 65 and Older.)
The entire variety of Medicare Benefit enrollees who could not be capable of change to conventional Medicare and a purchase order a Medigap coverage can be even larger if Medicare Benefit enrollees beneath age 65, who additionally should not have assured subject protections, have been included.
Medigap Insurers Can Deny Protection Based mostly on Pre-Current Circumstances, Besides Underneath Restricted Circumstances
Underneath present federal regulation, insurance coverage corporations that promote Medigap insurance policies could refuse to promote a coverage to an applicant with sure medical situations, or who has had sure medical procedures or used particular prescribed drugs, outdoors of open enrollment or a assured subject interval. This contrasts with different insurance coverage merchandise, like plans bought within the ACA Market or Medicare Benefit, which aren’t permitted to disclaim protection based mostly on pre-existing situations at any time.
Based mostly on a KFF assessment of 15 Medigap coverage purposes from 12 main Medigap insurers, a number of medical situations and prescribed drugs are listed as potential causes for medical underwriting or protection denial (Desk 2):
Medical situations: Medical situations which might be listed by Medigap insurers as causes for a possible denial on the appliance embody however should not restricted to: Alzheimer’s illness, bronchial asthma that requires use of inhalers, most cancers, congestive coronary heart failure, diabetes with issues (e.g., neuropathy), ESRD, hypertension, and stroke (Desk 2). Insurers additionally deny candidates who’ve undergone sure associated procedures, resembling a bone marrow, stem cell, or organ transplant or implant of a pacemaker. Many of those situations are prevalent amongst Medicare beneficiaries. For instance, about two-thirds (67%) of individuals on Medicare have hypertension, greater than 1 / 4 (26%) have diabetes, 19% have continual kidney illness, 12% have been recognized with coronary heart failure, and 10% have had prostate most cancers.
Useful standing: A number of purposes checklist indicators of practical standing as a possible cause for denial, together with having any problem performing actions of each day dwelling, being depending on a wheelchair or motorized machine, or being confined to the house.
Medicines: Underwriting pointers embody lengthy lists of medicines that can result in a possible denial. These medicines embody insulin better than 50 models per day to deal with diabetes, Zestril for hypertension, Revlimid for most cancers, Remicade for rheumatoid arthritis, and Lasix for coronary heart illness. For instance, one software states, “if the appliance has taken a number of of the next [medications] throughout the previous 12 months, don’t submit the appliance.”
Medical recommendation: Some purposes cite medical recommendation that has not been addressed as cause for denial. For instance, one software asks, “throughout the previous 12 months, have you ever been suggested by a medical skilled to have therapy, additional analysis, diagnostic testing, or surgical procedure that has not been carried out or do you may have pending take a look at outcomes?”
Medical service use: Utilization of residence well being providers, rehabilitation providers, inpatient hospitalization inside a selected time-frame (e.g., three or extra instances throughout the previous two years), or confinement to a nursing facility are additionally listed as causes for a declined software.
A number of Medigap purposes instruct people to not submit purposes if they’ve any of the listed pre-existing situations. For instance, one software states, “if the reply to any query…is sure, the appliance shouldn’t be submitted.” One other specifies that “when you reply YES to any [health] query, you aren’t eligible for protection.”
Just a few purposes checklist situations that can end in larger Medigap premiums however could not end in somebody being denied a coverage. Examples of those situations embody diabetes with no issues or that requires 50 or much less models of insulin, hemophilia, macular degeneration that doesn’t require injections, bipolar dysfunction or schizophrenia, and osteoporosis that’s handled with infusion.
Solely 4 States Require Steady or Annual Assured Situation Protections for Medigap for Individuals Ages 65 and Older
States can set up Medigap client protections that go additional than the minimal federal requirements. Solely 4 states – Connecticut, Massachusetts, Maine, and New York – require Medigap insurers to supply insurance policies both constantly all year long or as soon as per 12 months to Medicare beneficiaries ages 65 and older with out regard to their medical situations, according to prior KFF evaluation (Determine 2; Appendix Desk 2).
Two of those states – Connecticut and New York – have steady open enrollment, with assured subject rights all year long. Massachusetts regulation requires an annual assured subject open enrollment interval from February 1st to March thirty first, however all insurers in Massachusetts supply steady open enrollment all year long. Maine requires insurers to subject Medigap Plan A throughout an annual one-month open enrollment interval of the insurer’s selecting.
Minnesota has enacted laws that features the establishment of two assured subject open enrollment intervals (one throughout the annual Medicare open enrollment interval from October 15 to December 7 and one throughout the Medicare Benefit open enrollment interval, from January 1 to March 31), which require insurers to subject Medigap insurance policies throughout these time frames with out medical underwriting. Institutionalized people can buy Medigap on a continuous foundation, with assured subject rights all year long. These new guidelines are slated to enter impact on August 1, 2025, although there are indications that implementation could also be delayed.
In line with federal regulation, Medigap insurers in New York, Connecticut, and Maine could impose as much as a six-month “ready interval” to cowl providers associated to pre-existing situations if the applicant didn’t have six months of steady creditable protection prior to buying a coverage throughout the preliminary Medigap open enrollment interval. Massachusetts prohibits pre-existing situation ready intervals for its Medicare complement insurance policies.
States set up sure guidelines for Medigap insurers, together with set premiums, and premiums could also be based mostly on elements resembling a policyholder’s age, smoking standing, gender, residential space, and ranking system, even throughout open enrollment and assured subject intervals. Premiums may also differ throughout states because of states’ assured subject necessities, the traits of the Medicare inhabitants, the variety of Medicare beneficiaries, Medicare Benefit penetration, urbanicity of the county, and well being care value and utilization patterns. Because of the number of elements at play, KFF evaluation reveals that there’s not a transparent relationship between states with steady or annual assured subject protections and having constantly larger premiums for Medigap than in different states. Nonetheless, for Plan G, the states with the three highest common premiums do have extra sturdy assured subject protections. Additional, Minnesota just lately commissioned a examine on the impression of instituting annual assured subject protections and estimated that common annual premiums throughout all Minnesota Medigap plans can be 6% larger throughout the first 12 months of implementation, with enrollment in Medigap anticipated to be 32% larger than if these modifications weren’t in impact.
Thirty-5 States Require Medigap Insurers to Situation Medigap Insurance policies to Beneficiaries Ages 65 and Older Resulting from Sure Qualifying Occasions
An extra thirty-three states (in addition to Maine and Minnesota since they solely have annual assured subject protections) require Medigap insurers to supply insurance policies to eligible candidates ages 65 and older based mostly on sure qualifying occasions past the minimal federal requirements (Determine 3, Appendix Desk 2):
Twenty-nine states require Medigap insurers to subject insurance policies when an applicant has an change of their employer (retiree) protection, resembling a discount in advantages or a rise in prices, relying on the state. This qualifying occasion is extra expansive than federal regulation, which applies solely when retiree protection is totally eradicated.
Ten states require Medigap insurers to subject insurance policies if Medicare beneficiaries lose their Medicaid eligibility. Medicare beneficiaries who’re dually-eligible people would now not have premium and cost-sharing protections by Medicaid in the event that they lose their Medicaid protection.
Twelve states have assured points guidelines for different sorts of qualifying occasions. For instance, Maine extends the federally-required Medicare Benefit trial interval from one 12 months to 3 years. California permits Medicare Benefit enrollees to buy a Medigap coverage from the identical Medicare Benefit insurer they’re enrolled in (if it sells one) if their Medicare Benefit plan diminished any of its advantages, elevated value sharing, or terminated a contract with a supplier presently treating them. If a Medigap coverage just isn’t obtainable from their present Medicare Benefit insurer, they will buy a Medigap coverage from a distinct firm if their Medicare Benefit plan elevated premiums or copayments by 15% or extra, diminished advantages, or terminated a contract with a supplier presently treating them.
Moreover, some states have a assured subject interval for people who missed their 6-month Medigap enrollment interval as a result of they have been enrolled in Medicaid throughout the COVID-19 public well being emergency (PHE). These people weren’t terminated from Medicaid once they turned eligible for Medicare Half B due to the continual enrollment coverage throughout the PHE, however have been later terminated from Medicaid following the tip of the PHE.
A few of these states present assured subject protections for present Medigap policyholders who need to change insurance policies (Determine 3, Appendix Desk 2):
9 states have what are known as “birthday guidelines” (CA, ID, IL, KY, LA, MD, NV, OK and OR), which require Medigap insurers to permit present policyholders change annually to a distinct Medigap coverage with equal or lesser advantages from both the identical or completely different insurance coverage service, relying on the state, across the time of their birthday. Relying on the state, these Medigap policyholders have between 30 and 63 days to change insurance policies. (This allowance doesn’t allow beneficiaries who don’t have already got Medigap to newly buy a Medigap coverage.)
Missouri requires Medigap insurers to permit present Medigap policyholders to change to an equal coverage from a distinct insurer inside 30 days earlier than or after the annual anniversary date of their coverage.
Maine requires Medigap insurers to permit present Medigap policyholders to change to a coverage with equal or much less beneficiant advantages at any time throughout the 12 months if there may be lower than a 90-day hole in protection.
Washington requires Medigap insurers to permit Medigap policyholders to change to a coverage with equal or much less beneficiant advantages at any time throughout the 12 months if there may be lower than a 90-day hole in protection, although policyholders with Medigap Plan A are restricted to switching to a different Plan A, whereas these with Plans B by N can change to another Plan B by N.
Entry to Medigap Is Extra Restricted for Medicare Beneficiaries Underneath Age 65 with Disabilities
Underneath federal regulation, Medigap insurers should not required to promote Medigap insurance policies to the over 7 million Medicare beneficiaries who’re beneath age 65, a majority of whom qualify for Medicare based mostly on having a long-term incapacity and receiving Social Safety incapacity advantages (a small quantity qualify because of having ESRD or ALS). Larger charges of Medicaid protection amongst these beneficiaries, who are likely to have comparatively low incomes, additionally contribute to low enrollment in Medigap amongst beneficiaries beneath age 65. For these causes, a considerably smaller share of conventional Medicare beneficiaries beneath age 65 have Medigap in comparison with beneficiaries with conventional Medicare ages 65 and older: 7% vs. 46% in 2022 (Determine 4). When these beneficiaries flip age 65, federal regulation requires that they’re entitled to the identical six-month open enrollment interval for Medigap that’s obtainable to new beneficiaries ages 65 and older.
Though Not Required Underneath Federal Regulation, Most States Require Medigap Insurers to Provide an Preliminary Assured Situation Interval to Buy Medigap to Individuals Underneath Age 65 with Disabilities
Thirty-six states require insurers to subject no less than one type of Medigap coverage to beneficiaries beneath age 65, sometimes by an preliminary open enrollment interval (Determine 5, Appendix Desk 3). Of those 36 states, 25 require insurers to promote all plan sorts to folks beneath age 65 throughout the assured subject interval. Beginning January 1, 2025, Nebraska would require insurers to supply no less than one type of Medigap coverage to beneficiaries beneath age 65, and Indiana, which presently requires insurers to promote solely Plan A to folks beneath age 65, will prolong this requirement to all Medigap plan sorts supplied by insurers.
Along with the preliminary open enrollment interval it already gives, when Minnesota institutes two annual Medigap assured subject open enrollment intervals: one throughout the annual Medicare open enrollment interval from October 15 to December 7 and one throughout the Medicare Benefit open enrollment interval, from January 1 to March 31, these will apply for beneficiaries ages 65 and older in addition to folks beneath age 65 with disabilities.
Necessities for Individuals with ESRD: Of the 36 states that require insurers to subject no less than one type of Medigap coverage to folks beneath age 65 with disabilities, 26 states explicitly require insurers to additionally promote these insurance policies to folks with ESRD. 4 states (California, Massachusetts, Vermont, and Indiana) explicitly state that insurers should not required to promote insurance policies to folks with ESRD, although Indiana has enacted a brand new regulation requiring insurers to promote Medigap insurance policies to folks beneath 65 with ESRD beginning January 1, 2025. The remaining six states are silent on whether or not insurers should promote no less than one coverage to folks with ESRD.
Necessities for Individuals with ALS: Of the 36 states that require insurers to subject no less than one type of Medigap coverage to folks beneath age 65 with disabilities, 25 states specify that they should be bought to folks with ALS. Eleven states (together with CA, MA, and VT) are silent on whether or not insurers should promote insurance policies to folks with ALS.
That is along with the 14 states and D.C that don’t require insurers to promote a Medigap coverage to folks beneath age 65 with disabilities, together with folks with ESRD and ALS.
The identical 4 states which have expanded Medigap assured subject rights most broadly for beneficiaries ages 65 and older additionally require broader entry to Medigap for folks beneath age 65.
Along with providing an preliminary assured subject interval to buy Medigap, Massachusetts, Maine, New York, and Connecticut require steady or annual assured protections for folks beneath age 65 with disabilities, although with barely completely different necessities than for folks ages 65 and older: in Massachusetts, insurers should not required to subject insurance policies to folks with ESRD, whereas in Connecticut, insurers should subject Plan A to folks beneath age 65, in addition to Plans B, C, and/or D for insurers that promote these plan sorts to folks ages 65 and older. In Maine, all Medigap plan sorts should be obtainable to beneficiaries beneath age 65 with disabilities throughout the open enrollment interval, however after this era, insurers are solely required to subject Medigap Plan A to beneficiaries beneath age 65 throughout the one-month open enrollment interval that occurs annually (the identical as for folks ages 65 and older).
19 of the 36 States That Require Medigap Insurers to Provide Insurance policies to Eligible Candidates Underneath Age 65 Throughout an Preliminary Open Enrollment Interval Additionally Do So for Sure Qualifying Occasions
Nineteen states require Medigap insurers to supply insurance policies to eligible candidates beneath age 65 based mostly on sure qualifying occasions (Determine 6, Appendix Desk 4):
Ten states require Medigap insurers to subject insurance policies when an applicant beneath age 65 has a change of their employer (retiree) protection. These 10 states (CA, CO, FL, ID, IL, MN, MO, OR, TX, and VA) additionally supply assured subject rights for candidates ages 65 and older who’ve a change of their employer (retiree) protection. Nonetheless, some states have extra restrictive insurance policies for folks beneath age 65. For instance, in Texas, this assured subject proper applies just for Medigap Plan A for folks beneath age 65.
5 states (CA, CO, OR, TN, and TX) require insurers to subject Medigap insurance policies to beneficiaries beneath age 65 who lose their Medicaid eligibility. These 5 states additionally supply the identical assured subject protections for folks ages 65 and older, however within the case of Texas, the assured subject proper for folks beneath age 65 applies solely within the case of Plan A.
Ten states produce other sorts of qualifying occasions:
Eight states (CA, ID, KY, ME, MD, MO, OK, OR) require Medigap insurers to permit Medigap policyholders beneath age 65 to change to a coverage with equal or much less beneficiant advantages (e.g., beneath “birthday guidelines”).
Illinois extends the identical federal Medicare Benefit assured subject protections which might be obtainable to folks ages 65 and older, to folks beneath age 65 within the state. For instance, Medicare Benefit enrollees beneath age 65 in Illinois who transfer out of their Medicare Benefit plan’s service space, or whose Medicare Benefit plan goes out enterprise, have a 6-month assured subject proper to buy a Medigap coverage.
Oregon requires that insurers supply a assured subject interval to people who transfer to Oregon from a state that doesn’t require Medigap insurers to subject insurance policies to folks beneath age 65.
A New Federal Rule Could Have Implications for the Medigap Market
A brand new federal rule – Nondiscrimination in Well being Packages and Actions – has the potential to convey modifications to the Medigap market. So far, Medigap insurance policies haven’t been topic to Part 1557 of the Inexpensive Care Act, which prohibits discrimination on the idea of race, colour, nationwide origin, intercourse, age, or incapacity in sure well being applications and actions. In Could 2024, the Division of Well being and Human Providers (HHS) issued a last rule clarifying that Part 1557 would apply to Medigap insurance policies supplied by insurers which might be “principally engaged” in offering medical health insurance protection starting January 1, 2025, and will not interact in conduct that’s discriminatory, which might embody charging larger charges based mostly on age. This might imply that some present medical underwriting or premium ranking practices within the Medigap market might violate Part 1557. The brand new rule wouldn’t apply to corporations that promote Medigap insurance policies that don’t interact principally within the provision of medical health insurance protection, resembling those who primarily present residence or auto protection.
It’s unclear the extent to which this rule will change Medigap insurers’ practices and the way the rule will likely be enforced. The rule can be topic to ongoing litigation, together with a postponement of the rule in its entirety in Texas and Montana, which might additional delay its implementation.
Federal and State Proposals to Improve Client Protections for Medigap
Federal laws: The Elijah E. Cummings Decrease Drug Prices Now Act, which handed the Home of Representatives in December 2019, included provisions that might have offered some assured subject protections to Medicare beneficiaries, together with requiring the one-time, six-month Medigap open enrollment interval to use to all Medigap-eligible beneficiaries, with out regard to age (that means it might apply to folks beneath age 65), and offering a one-time alternative for Medicare Benefit enrollees to change to Medigap, even when they’d been in Medicare Benefit past the one-year trial interval. CBO estimated that these provisions would improve Medicare spending by $14 billion over 10 years (2020-2029). CBO didn’t estimate the impression on Medigap premiums.
Whereas CBO didn’t present an in depth rationalization of its value estimate, sure assumptions would possibly clarify the projected improve in Medicare spending. For instance, beneficiaries who change to conventional Medicare could use extra providers as a result of they’ve the safety of Medigap protection, considerably limiting their out-of-pocket prices, which research present can improve utilization of well being care providers. The upper use of providers beneath conventional Medicare would have the impact of accelerating Medicare spending and elevating Medigap premiums. It isn’t clear whether or not CBO’s estimate took into consideration potential financial savings related to overlaying extra beneficiaries beneath conventional Medicare than Medicare Benefit, since Medicare presently pays extra, on common, for related beneficiaries in Medicare Benefit than conventional Medicare.
A change in guidelines might additionally impression Medigap premiums if broadening assured subject protections leads to “hostile choice” within the Medigap market. Research present that sicker Medicare Benefit enrollees disenroll into conventional Medicare at comparatively larger charges, resembling beneficiaries who’ve 2 or extra complicated continual situations or impairments in actions of each day dwelling. If larger value beneficiaries acquire entry to Medigap, premiums might rise. Nonetheless, if Congress adopted an out-of-pocket cap for conventional Medicare, as some lawmakers have proposed, this would possibly mitigate a rise in premiums and even cut back premiums as a result of Medigap insurers would now not be chargeable for prices that enrollees incur above the brand new restrict.
Different payments beforehand launched would prohibit medical underwriting in Medigap always, aside from individuals who qualify for Medicare on the idea of ESRD or would develop the preliminary federal assured subject interval to all Medicare beneficiaries, together with these beneath age 65 with disabilities, amongst different modifications.
State laws: Some states have additionally launched laws to develop client protections in Medigap. For instance, California lawmakers launched laws that might require assured subject rights throughout a 90-day annual open enrollment interval. Iowa lawmakers launched laws to require assured subject rights throughout a 30-day annual open enrollment interval. Vermont lawmakers additionally launched laws that would offer assured subject rights for folks switching from Medicare Benefit to conventional Medicare across the time of their birthday. Different states have payments pending that might supply “birthday guidelines” of their state – permitting individuals who presently have Medigap insurance policies to change insurance policies across the time of their birthday together with South Dakota and Wisconsin. None of those legislative efforts have been signed into regulation.
Strategies
The evaluation on the share of Medicare Benefit enrollees 65 and older topic to medical underwriting outdoors of the Medicare Benefit trial interval is predicated on based mostly on Facilities for Medicare & Medicaid Providers (CMS) Continual Circumstances Information Warehouse Grasp Beneficiary Abstract File (MBSF), 2022.
The state-level analyses on assured subject protections for folks ages 65 and older and other people beneath age 65 with disabilities are based mostly on a assessment of every state’s rules, steering paperwork/manuals, directives, and different publicly accessible government-issued paperwork.
Moreover, KFF workers contacted states’ insurance coverage departments or State Well being Insurance coverage State Well being Insurance coverage Division Program (SHIP) places of work for readability in instances the place publicly accessible paperwork have been silent on a specific subject.
For the state-level evaluation for folks ages 65 and older:
States are marked as “no” if their rules or different publicly accessible paperwork don’t specify any further qualifying occasions (past the federal commonplace).
For the state-level evaluation for folks beneath age 65:
States are marked as “no” to having any particular qualifying occasions if 1) they don’t require insurers to supply Medigap insurance policies to folks beneath age 65, or 2) they don’t have any specified qualifying occasions or assured issued protections for folks beneath age 65, based mostly on KFF assessment of state rules, steering paperwork, and phone with insurance coverage departments or State Well being Insurance coverage Division Program (SHIP).
States are marked as “not specified” if publicly accessible paperwork don’t specify necessities pertaining to every assured subject qualifying occasion. These qualifying occasions have been recognized based mostly on whether or not they’re obtainable to folks 65 and older in that state.
Though greatest efforts have been made to test every state’s rules, steering paperwork, and name insurance coverage departments/SHIP places of work, it’s potential that states marked as “not specified” have guidelines that weren’t recognized by the analysis group.
