Medicare in Hawaii: Key takeaways
- Hawaii Medicare enrollees comprised about 19 percent of the state’s population in 2018.
- Just 9 percent of Hawaii’s Medicare beneficiaries are eligible due to disability.
- Average Medicare spending per recipient in Hawaii was $6441 in 2016.
- Hawaii has some of the strongest consumer protections to ensure Medigap access for younger enrollees.
- In Hawaii in 2017, 45 percent of Medicare beneficiaries were enrolled in private Medicare Advantage plans.
- In 2018, there were 71,138 Hawaii Medicare beneficiaries with stand-alone Part D prescription drug plans.
Medicare enrollment in Hawaii
As of November 2018, 267,831 Hawaii residents had Medicare coverage. That’s nearly 19 percent of the state’s total population, which is very similar to the percentage of the total United States population enrolled in Medicare.
Breakdown of the aged vs. disabled
Most people become eligible for Medicare when they turn 65, but Medicare coverage is also available to people who are disabled. Nationwide, 84 percent of Medicare beneficiaries are eligible due to being at least 65 years old, while the other 16 percent are eligible due to disability.
Hawaii has the smallest percentage of disabled Medicare beneficiaries in the country — just 9 percent of Medicare beneficiaries in Hawaii are eligible as a result of a disability (this is tied with the Virgin Islands), while the other 91 percent are eligible due to their age.
Medicare spending per recipient
As of 2016, per-beneficiary Medicare spending in Hawaii was the lowest in the nation, at $6,441. Nationwide, the average was $9,533 (and on the high end, per-beneficiary spending exceeded $11,000 in Florida, Texas, and Louisiana).
That data is based on a standardized spending report from CMS, which eliminates spending differences that stem from strictly geographic differences in costs (eg, higher labor costs or overhead expenses in higher cost-of-living areas like Alaska and Hawaii). The report only considers Original Medicare spending, as opposed to Medicare Advantage (and Hawaii has a higher-than-average percentage of Medicare beneficiaries covered under Medicare Advantage).
The fact that Hawaii has the lowest percentage of Medicare enrollees who qualify based on a disability (as opposed to age) plays a role in the low per-capita spending, since disabled enrollees have higher average costs than enrollees who are eligible based on their age.
Medigap in Hawaii
Medigap plans are used to supplement Original Medicare, covering 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. Medigap plans are standardized under federal rules, and federal rules allow Medicare beneficiaries a six-month open enrollment window (when coverage is guaranteed issue at a standard price) that starts when they’re 65 and enrolled in Medicare Part B.
But people can also enroll in Medicare before they’re 65, if they’re disabled; 9 percent of Hawaii’s Medicare beneficiaries are eligible due to disability rather than age. Federal rules do not, however, protect access to Medigap plans for people who enroll in Medicare before they turn 65. States can implement their own rules to address this, and the majority of the states have implemented at least some degree of protections for Medigap enrollees who aren’t yet 65.
Hawaii’s Medigap regulations are available here; the state has among the nation’s strongest consumer protections to ensure Medigap access for younger enrollees. The state requires (see §16-12-6.2) all Medigap insurers to offer all plans on a guaranteed-issue basis (and without adjusting premiums based on medical history) to any enrollee — regardless of age — during the six-month window that begins when the person is enrolled in Medicare Part B. So Hawaii’s law gives people who are under 65 and eligible for Medicare as a result of a disability the same access that federal law grants to those who are eligible for Medicare due to their age.
Hawaii’s rules also require Medigap plans in Hawaii to have loss ratios of at least 65 percent for individual policies, and 75 percent for group policies (loss ratios reflect the percentage of premiums that the insurer spends on health care costs).
As of 2018, 15 insurers offered Medigap plans in Hawaii.
Medicare Advantage in Hawaii
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). In most areas of the country, including all of Hawaii, Medicare beneficiaries can opt for either Original Medicare or Medicare Advantage — both options have pros and cons.
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.
In Hawaii in 2017, 45 percent of Medicare beneficiaries were enrolled in private Medicare Advantage plans — as opposed to 33 percent of Medicare beneficiaries nationwide. The remaining 55 percent of the state’s Medicare beneficiaries had coverage under Original Medicare. Total Medicare Advantage enrollment in Hawaii stood at 122,381 as of November 2018.
Hawaii’s percentage of Medicare beneficiaries enrolled in Medicare Advantage is the second-highest in the nation. Only Minnesota, where 56 percent of beneficiaries have Medicare Advantage plans, has a higher percentage. At the other end of the spectrum, there are no Medicare Advantage plans available anywhere in Alaska.
Stand-alone Medicare Prescription Drug plans
Original Medicare does not cover outpatient prescription drugs. But Medicare beneficiaries can get prescription coverage via a Medicare Advantage plan, an employer-sponsored plan (offered by a current or former employer), or a stand-alone Part D plan.
As of November 2018, there were 71,138 Hawaii Medicare beneficiaries with stand-alone Part D prescription drug plans. Another 118,456 beneficiaries had Part D coverage integrated with their Medicare Advantage coverage (most Medicare Advantage plans include Part D coverage; stand-alone Part D plans are usually used to supplement Original Medicare, since it never includes prescription coverage).
In 2019, insurers in Hawaii are offering 24 stand-alone Part D plans, with premiums that range from $14 to $80 per month.
Medicare prescription drug coverage — called Medicare Part D — was the result of legislation passed in 2003 and signed into law by President George W. Bush in 2006. By the end of its first decade, Medicare Part D was providing coverage for almost three-quarters of all eligible Medicare beneficiaries nationwide, including those who have Part D coverage as part of their Medicare Advantage plan.
Health insurance in Hawaii for people who aren’t eligible for Medicare
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.