Conversations continue to take place in Washington regarding policy changes that could impact Medigap. Last week, the Washington Post ran an editorial that argued for banning Medigap first-dollar coverage. In response, America’s Health Insurance Plans President and CEO, Karen Ignagni, submitted the letter-to-the-editor below, which underscores the negative impacts that limiting first-dollar coverage would have on Medigap beneficiaries.
To the Editor:
Re: “Repairing Medicare” (1/6/13)
Medicare supplement (Medigap) coverage provides financial protection and peace of mind to nearly 10 million Medicare beneficiaries. Medigap helps cover significant out-of-pocket costs that are not covered by Medicare and allows seniors and beneficiaries with disabilities to budget for medical costs and avoid the confusion and difficulty of handling complex medical bills.
Research has shown that limiting first-dollar coverage in Medigap plans would cause many beneficiaries to avoid care that is medically necessary – resulting in higher costs for enrollees and the country. This is especially true for the more than half of Medigap policyholders who have annual incomes of $30,000 or less and would be disproportionately impacted by these changes.
Current estimates of budgetary savings of increasing beneficiary cost-sharing in Medigap plans are based on outdated studies that are not applicable to today’s Medicare population. Importantly, the specific savings highlighted in the editorial are based on proposals that would raise out-of-pocket costs for current Medigap beneficiaries, taking away benefits that seniors have paid for over many years. As noted by the National Association of Insurance Commissioners, “an abrupt alteration of the Medigap cost-sharing benefits for in-force policies will cause a major market disruption and cause serious confusion for seniors.”
President and CEO
America’s Health Insurance Plans
For more information about the value of Medigap plans, visit the Partnership to Protect Medigap.