How Does PPACA (“Obamacare”) Affect Medicare Supplements?

February 27, 2014 by · Leave a Comment

How does PPACA, or “Obamacare”, affect Medicare supplement insurance. This is a good, and common, question. It’s one that we get asked frequently since the bill was passed into law a couple of years ago. The short answer is that PPACA does not directly impact Medicare Supplement insurance in any way.

The bill does not apply to supplemental, or secondary, policies in the same way that it applies to primary insurance or “under-65” insurance. So, for people on Medicare, there is minimal impact overall and no impact to their Medicare supplement coverage. Medigap plans (another name for Medicare Supplements) are still standardized into the ten plans that were established in June 2010. These plans are set forth by the government – private companies that offer Medigap plans must go by these coverage outlines, but they can set their prices however they want.

Although Medigap plans are not directly affected, the PPACA does affect Medicare in some ways, primarily in the areas of Medicare Advantage (the private plans that replace Medicare) and Medicare Part D (Rx coverage for people on Medicare). For Medicare Advantage plans, the bill took some money away from the plans in the form of reimbursement rates. This is where part of the money to pay for the under-65 portion of the plan comes from. Medicare reimburses the private Medicare Advantage companies a certain amount per person for those who elect Medicare Advantage instead of Medicare itself. Decreasing this amount will obviously decrease the level of coverage (or added benefits) that these plans can offer.

For Part D, the biggest change is the reduction and eventual elimination of the Part D donut hole. This is the portion of Part D coverage during which the insured must pay the largest portion of their cost. In the past, the individual was responsible for paying the full retail costs of medications during this coverage “gap”. Because of the PPACA, this gap is being reduced each year up until 2020, at which time consumers will pay 25% of the retail costs of medications during the coverage gap (instead of the 100% that they were responsible for in 2010 before the bill).

For Medicare Supplements, many people believe “Obamacare” will have a “trickle-down” effect on Medigap insurance companies, particularly those who also are involved in the under-65 insurance market. There have been several companies that have pulled out, or reduced, their service areas for under-65 insurance, and some feel that this will affect their profit needs/motives in the Medicare supplement market.

If you have questions about this information or wish to discuss this further, you can contact me at 877.506.3378 or online at Secure Medicare Solutions.

Filed Under: Health care reform, Medicare insurance news, Medigap Plans · Tagged: , , , , , , , , , ,

Medicare Supplement Rate Increases – Medicare Deductible/Coverage Changes Take Toll on Medigap Rates

March 4, 2010 by ·

Medicare Supplement rates have taken a hit in recent months for South Carolina, with several large companies announcing rate increases. Typically, your rate only increases on your policy anniversary date, so if a company announces rate increases to start on 5/1, for example, the increase affects your rate starting on your policy anniversary date (not on 5/1).

Although reasons for rate increases are complex – one of the main reasons is that most policies go up based on your age – this year’s increases are likely due to two major factors – Medicare changes and the economic climate. Medicare has increased the deductibles from 2009 to 2010, as well as making other changes that enlarge the ‘gaps’ that Medicare Supplemental plans cover. When the gaps that have to be covered are larger, the increased costs are passed on to the end-consumer. With the ongoing uncertainty as far as health care reform and its impact on future Medicare changes, this is something to keep an eye on in future years.

One final factor that is sure to be having an impact on Medicare Supplement companies is the recent influx of people from Medicare Advantage plans and employer coverage, moving over to Medicare Supplement plans. Because of the reduction in benefits/increase in costs with the Advantage plans for 2010, many of those people elected to go to supplemental plans. Also, because many people have lost their retirement health insurance benefits, they have had to elect supplement plans. In both situations, the majority of these people are in ‘Guaranteed Issue’ situations, which means the insurance companies are required to accept them despite any poor health conditions. Unhealthier people equals more claims, which in turn, equals higher rates.

If you are getting a rate increase and want to avoid it, chances are you can do so. Over 85% of people can save money on their Medicare supplement coverage by getting Medigap quotes and comparing supplement options to save money. Visit us at: http://www.securemedicaresolutions.com/medicare-insurance-quote.php to find out if you are in this 85% or the 15% that can’t.

Filed Under: 2010 plans, Health care reform · Tagged: , , , , , , , , ,

South Carolina Medicare Supplement Plans Brace for Influx of Medicare Advantage Customers

September 28, 2009 by · Leave a Comment

With the already-set and anticipated changes to the Medicare Part C Medicare Advantage program for 2010, Medicare Supplement plans in South Carolina and nationwide are bracing themselves for what they expect to be an “onslaught” of new customers to the Medicare + Medicare Supplement marketplace.

South Carolina Medicare Advantage plans are expected to see increases in premium of $40-70, on average, for 2010, as well as reducing some of the benefits that they have provided in the past. In addition, the days of the $0 premium Medicare Advantage plans are, most likely, gone (or almost gone). Medicare Supplement companies are expecting, and rightfully so, that many of these people will find themselves searching for Medicare Supplement plan options to replace their Medicare Advantage plans.

With Medicare Advantage plans increasing in premium to levels of some of the lower tier supplement plans, plus having more cost-sharing (i.e. co-pays and deductibles), most companies and those in the industry project that the supplement plans will be a more viable option for this Medicare enrollees in 2010.

Coupled with the sharp increase in the last two years of companies dropping retiree insurance, the last two months of this year are projected to be the busiest ever for Medicare Supplement enrollments.

With this information in mind, if you plan to disenroll from a Medicare Advantage plan this enrollment season (or, even if you are changing to a new plan), it is advisable to get an early start on doing so. Companies, agents and Medicare itself are expected to be very busy this enrollment season. Below are a couple of resources if this situation applies to you:

Filed Under: Health care reform, South Carolina Medicare Advantage plans, South Carolina Medicare Supplements · Tagged: , , ,