Presentation Educates State Leaders on Importance of Medigap Access for Medicare Recipients Under 65
In preparation for a new Congress and the start of the state legislative sessions, the American Kidney Fund did some ground work to educate elected officials on Medigap in December. The American Kidney Fund partnered with the Medicare Rights Center to present information to the National Conference of State Legislatures (NCSL) Insurance Task Force on Medigap.
The presentation included an overview of the federal law that gives the states the authority to regulate Medigap plans for Medicare beneficiaries under the age of 65. Currently, there are no federal requirements for health insurance plans to offer Medigap plans to those under 65. Thirty states have acted, and in those states, all Medicare beneficiaries can buy a Medigap plan. California and Vermont require insurers to offer Medigap plans those under 65, except if they have end-stage renal disease (ESRD). In addition to excluding ESRD patients, there are other big differences in the consumer protections for those over and for those under the age of 65.
For those Medicare recipients who age into the program, Medigap insurers must offer a comprehensive plan. From age 65 to 65 ½ (6 months), beneficiaries can opt-into a plan and insurers cannot take pre-existing conditions into account or use medical underwriting, which is when an insurance company takes the health of the patient into account when they calculate the premium.
Medicare beneficiaries under the age of 65are eligible for Medicare because they became disabled and/or they have end-stage renal disease (ESRD) and must go on dialysis. For these patients, the states can decide what consumer protections to offer these patients, and state laws differ. Hence, insurers may not be required to offer a plan to Medicare beneficiaries under age 65 at all. In some instances, Insurers may be able to use medical underwriting when calculating a rate, which may make it unaffordable for the patients; they may only be required to offer a minimal Medigap plan that does not provide sufficient protection for out-of-pocket costs.
Medicare beneficiaries under age 65 frequently have multiple chronic conditions and comorbidities and they also have lower incomes that beneficiaries over age 65. Median annual income for all beneficiaries in 2016 was $26,200. For those under 65, it was $17,950. In 2016, there were 9 million Medicare beneficiaries under the age 65, and they need the same consumer protections as those over the age of 65. Without access to a Medigap plan, the costs can be unaffordable – there is no annual out-of-pocket maximum in Medicare -- and can force patients into bankruptcy.
The presentation at the NCSL Insurance Task Force focused on what the states could do to better protect Medicare beneficiaries under age 65, but the federal government can also require states to act. Federal law protects Medicare recipients over the 65, and Congress can extend that law to Medicare beneficiaries under the age 65 so that all beneficiaries are treated equally. Until Congress extends the law, the states should take up legislation to protect these patients.
During the coming months, bills may be introduced to correct this situation in the both the states and in Congress. If it does and you want to be a part of the fight to enact this important legislation, please sign up for our advocacy network.