Came across a question recently pertaining to the future of medigap policies under the new healthcare law. Something very interesting to be aware of. Read on and pay attention to the "good" reasons for lessening the full coverage terms of some medigap plans. Think you'll be as amazed as I. Here is the question as found in Kaiser Health News:
Q. How will the new health law affect Medigap policies? I’m on Medicare with a Medigap Plan F. Premiums are rising 20 percent a year. It’s a real strain for me.
A. The health care overhaul doesn’t make any immediate changes to Medigap policies, but it sets the stage for potential changes to Plans C and F in 2015.
One in five Medicare beneficiaries has a Medigap policy to supplement their coverage under the traditional Medicare program. The standardized policies, which are identified by letters, cover coinsurance, deductibles and services not covered by Medicare to varying degrees.
Plan F and Plan C are the most popular Medigap plans, chosen by nearly two-thirds of beneficiaries. Those are also the policies that provide significant "first dollar" coverage: they pay the deductibles for both the hospital and outpatient portions of the traditional Medicare program (Parts A and B) as well as the 20 percent coinsurance required for doctor visits, and cover other services as well. People with these supplemental plans may pay virtually nothing for medical services beyond their premiums.
And that has policymakers concerned. If people don’t have to pay anything out of pocket for doctor visits and other medical care, there’s no financial incentive to get only the care they really need. Studies have shown that people get less medical care when they have to make some sort of financial contribution, though they skimp on both necessary and unnecessary care.
A 2009 study conducted for the Medicare Payment Advisory Commission found that medical costs for people with Medigap policies were 33 percent higher than the costs of beneficiaries without supplemental insurance.
"So the thinking has been that if you prohibit first dollar coverage and require some cost sharing when beneficiaries see a physician, it might encourage them to see the physician only when they need to," says Gretchen Jacobson, a principal policy analyst with the Program on Medicare Policy at the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
There have been a number of proposals put forward in recent years that would reduce Medigap coverage in some policies and require beneficiaries to pay more. To date, nothing has changed.
But the health care overhaul opens the door to changes in the future. Under the law, the National Association of Insurance Commissioners is required TO evaluate the benefit packages of Plans C and F with an eye toward adding nominal cost sharing by 2015.
Even if that happens, however, it’s unclear whether it would affect you or other current policyholders, says Jacobson. "The changes might only apply to new policyholders," she says.
By Michelle Andrews
Kaiser Health News