Study finds more Seniors Choosing Medigap Plans

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logo9More People are Choosing Medigap Plans, New Study Finds

A new report released today shows that Medigap coverage is a vital lifeline to more than 10 million Medicare beneficiaries.  The study, by America’s Health Insurance Plans (AHIP), is an update to prior research showing trends in Medigap enrollment and coverage.

The new report, “Trends in Medigap Coverage and Enrollment, 2012,” finds that enrollment in Medigap plans increased by 300,000, from 9.9 million in December 2011 to 10.2 million in December 2012. Consistent with recent years, beneficiaries are increasingly choosing to enroll in Medigap plans that include at least some cost-sharing provisions, such as co-pays and coinsurance.

Medigap Provides Financial Protection and Peace of Mind to 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. A recent survey found that 9 out of 10 seniors are satisfied with their Medigap coverage, and more than 9 in 10 would recommend Medigap to a friend or relative.

Proposals to Change Medigap Could Threaten Affordability and Benefits Seniors Rely On

Tomorrow, a congressional committee will hold a hearing on Medicare reform that will focus on proposals to modify beneficiary cost-sharing, including potential changes to Medigap coverage.

The Partnership to Protect Medigap is urging policymakers to avoid cutting benefits or enacting changes that would harm the millions of seniors and people with disabilities who rely on Medigap coverage.  The President’s budget proposal for 2014 includes a new $2.9 billion tax on beneficiaries who choose Medigap policies with low cost-sharing requirements.  The Medicare Payment Advisory Commission (MedPAC) has recommended a 20 percent tax on these policies.  Adding a new tax on Medigap would increase costs for vulnerable beneficiaries who rely on the predictability and financial protection Medigap provides.

Research has shown that limiting first-dollar coverage in Medigap policies would cause beneficiaries to avoid care that is medically necessary – resulting in higher costs for enrollees and the country.  A white paper concluded that “an across-the-board ban on first-dollar coverage Medigap plans is an overly blunt tool for lowering healthcare expenditures and invites adverse, unintended consequences.” These concerns have been echoed by other organizations.

Importantly, the cost savings often cited by proponents of restricting first-dollar coverage in Medigap are based on proposals that would apply this change to current Medicare beneficiaries.  Imposing cost sharing on current Medigap policyholders would add a significant burden on vulnerable Medicare beneficiaries, many of whom have been paying for these benefits for many years, often have very tight budgets, and rely on Medigap for predictability in their health care costs and protection against high medical bills.

The Partnership to Protect Medigap is working to help ensure that these benefits are preserved for current and future Medigap beneficiaries. Join us in helping to protect Medigap by making your voice heard. Contact your members of Congress, and help us spread the word to other Medigap beneficiaries bytelling a friend.

The Partnership to Protect Medigap will continue to stay in touch on issues relating to Medigap coverage. For more information, visit