Medicare in Alabama: Key takeaways
- As of November 2018, 1,026,654 Alabama residents were enrolled in Medicare.
- In Alabama, only 77 percent of Medicare beneficiaries are eligible due to their age.
- Original Medicare spent an average of $9,888 per beneficiary in Alabama in 2016.
- There are 36 insurers that offer Medigap plans in Alabama as of 2019.
- Thirty-six percent of Alabama Medicare beneficiaries were enrolled in a private Medicare Advantage plan in 2017.
- In 2018, there were 356,917 Medicare beneficiaries in Alabama who were enrolled in stand-alone Part D prescription drug plans.
Total Medicare enrollment in Alabama
As of November 2018, 1,026,654 Alabama residents were enrolled in Medicare. That’s nearly 21 percent of the state’s total population, compared with a little more than 18 percent of the United States population enrolled in Medicare.
In raw numbers, Alaska has the fewest Medicare beneficiaries, at 97,194, and California (which has about an eighth of the country’s population within its borders) has the most at more than 6.1 million (a little more than 15 percent of its population).
Breakdown of the aged vs. disabled
Medicare covers most Americans who are age 65 or older, and it also covers disabled Americans. In Alabama, only 77 percent of Medicare beneficiaries are eligible due to their age, with 23 percent eligible due to a disability.
Nationwide, 84 percent of Medicare beneficiaries are eligible due to their age, and just 16 percent are eligible due to a disability. Alabama is tied with Kentucky and Mississippi for the highest percentage of disabled Medicare beneficiaries in the country. If we also consider the US territories, 31 percent of Medicare beneficiaries in American Samoa are eligible due to a disability, and Puerto Rico is tied with Alabama, with 23 percent of Medicare beneficiaries eligible due to disability.
In Hawaii, just 9 percent of Medicare beneficiaries are eligible due to a disability, which is the lowest rate in the country.
Medicare spending per recipient
In 2016, Original Medicare spent an average of $9,888 per beneficiary in Alabama (the data were standardized to account for regional differences in payment rates, but the data did not include Medicare Advantage costs.
Medigap in Alabama
The coverage provided by Medigap plans serves to fill in the “gaps” in Original Medicare by paying some or all of the out-of-pocket costs (for coinsurance and deductibles) that people would otherwise incur if they only had Original Medicare on its own. For the most part, Medigap plans only cover services that Medicare already covers — the Medigap plan just pays the out-of-pocket costs. But Medigap coverage would not, for example, cover long-term care, since that’s not something that Medicare covers.
Medigap plans are offered by private insurers, and 36 insurers issue Medigap plans in Alabama as of 2019.
Medigap plans are standardized under federal rules, and federal rules allow for a six-month guaranteed-issue window during which coverage is guaranteed issue for Medigap plans, and insurers can’t use medical underwriting to determine eligibility or premiums. This window starts when a person is 65 and enrolled in Medicare Part B.
But Medicare is available to people under 65, if they’re disabled. And no state has a higher percentage of disabled Medicare beneficiaries than Alabama. Federal rules do not, however, guarantee access to a Medigap plan if the applicant is under 65 and eligible for Medicare as a result of a disability.
The majority of the states have adopted rules to ensure at least some access to Medigap plans for enrollees under the age of 65, but Alabama is not one of them. Medicare beneficiares in Alabama who are under 65 can apply for a Medigap plan, but coverage is not guaranteed issue and insurers can use medical underwriting to determine whether to issue a policy and at what price. But a person who has Medicare prior to age 65 does qualify for an open enrollment period when they turn 65, during which they can select any Medigap plan available in their area, without medical underwriting.
There are two insurers in Alabama that offer Medigap plans to enrollees who are under age 65. They offer Plans B, F, and/or high-deductible F, and their sample premiums are substantially higher than premiums for similar plans for a person who is 65.
Medicare Advantage in Alabama
Medicare Advantage offers health benefits for Medicare beneficiaries through private plans instead of through Original — or traditional — Medicare (the federal government’s fee-for-service program). Some Medicare Advantage plans are available with no premium other than the cost of Part B, but they also have provider networks that are more limited than Original Medicare, and total out-of-pocket costs can be considerably higher than enrollees would pay if they had Original Medicare plus a Part D plan plus Medigap.
Medicare beneficiaries can choose whether to enroll in Original Medicare or Medicare Advantage (there are pros and cons either way), and there’s an option to switch from one to the other each fall, during the annual open enrollment period (October 15 through December 7). And as of 2019, there’s also a Medicare Advantage open enrollment period (January 1 to March 31) during which people who are already enrolled in Medicare Advantage plans can switch to a different Medicare Advantage plan or drop their Medicare Advantage plan and enroll in Original Medicare instead.
36 percent of Alabama Medicare beneficiaries were enrolled in Medicare Advantage plans in 2017. Nationwide, the average was 33 percent. The remaining 64 percent of Alabama’s Medicare beneficiaries had coverage under Original Medicare.
In Alabama in 2019, the number of Medicare Advantage plans for sale in each county ranges from seven (in nine counties with fairly low population) to 31 plans in Shelby County.
Minnesota is the only state where more than half (56 percent) of Medicare eligibles enrolled in a Medicare Advantage plan. On the other end of the spectrum, there are no individual Medicare Advantage plans for sale in Alaska, and just 1 percent of Alaska’s Medicare beneficiaries have Advantage coverage, via employer group Medicare Advantage plans.
Stand-alone Medicare Prescription Drug plans
As of November 2018, 356,917 Alabama Medicare beneficiaries were enrolled in stand-alone Part D prescription drug plans. That’s about 35 percent of the state’s total Medicare beneficiaries, as opposed to about 43 percent of all Medicare beneficiaries nationwide enrolled in stand-alone Part D plans. Another 386,000 Medicare beneficiaries in Alabama had Part D prescription coverage integrated with their Medicare Advantage coverage.
For 2019 coverage, there are 29 stand-alone Part D plans available in Alabama, with premiums ranging from about $16 to $120 per month.
Medicare prescription drug coverage was the result of legislation passed in 2003 and signed into law by President George W. By the end of its first decade, Medicare Part D was providing coverage for almost three quarters of all eligible Medicare beneficiaries, including those who had Part D coverage as part of their Medicare Advantage plan).
For those who aren’t eligible for Medicare in Alabama
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.