Medicare is a federal program, available to seniors and disabled Americans in every state. But most Medicare beneficiaries – about 86 percent – have some form of additional coverage, either replacing Original Medicare with a Medicare Advantage plan, or supplementing it with coverage from an employer or with Medigap and Part D Prescription drug coverage.
There is significant variation from one state to another in terms of availability, pricing, and regulation of private Medicare plans, and Medicare beneficiaries in different areas often make different choices about their coverage.
Medicare Advantage and Part D
Federal guidelines call for an annual open enrollment period (October 15 to December 7) for Medicare Advantage and Medicare Part D coverage in every state. But while these provisions apply nationwide, plan availability and price are different from one state to another.
Not surprisingly, the popularity of Medicare Advantage plans varies significantly from one state to another, with less than one percent of the Medicare population enrolled in Advantage plans in Alaska, versus 53 percent in Minnesota.
Part D prescription drug plan availability differs from state to state as well, with 24 plans available in Alaska and 33 in Illinois. In addition, some states have only four premium-free (“benchmark”) prescription plans for low-income enrollees, while other states have as many as 12.
Medigap is the only form of private coverage for Medicare beneficiaries that has no federally mandated annual open enrollment period. Medigap coverage is guaranteed issue for six months when you turn 65 and enroll in Original Medicare. During that time, enrollees can select any Medigap plan available in their area, with no medical underwriting.
But once that window closes, enrollees often find themselves locked into the plan they have – regardless of how the premium changes – because in most states, switching to another plan can be impossible or prohibitively expensive due to medical underwriting. (Under federal guidelines, there are seven limited circumstances when you can get a new Medigap plan without medical underwriting.)
Medigap state variation
In response to the lack of a nationwide annual open enrollment period for Medigap, some states have implemented legislation that makes it easier for seniors to switch from one Medigap plan to another.
In New York and Connecticut, Medigap plans are guaranteed issue year-round.
California and Oregon both have “birthday rules” that allow Medigap enrollees a 30 day window following their birthday each year when they can switch, without medical underwriting, to another Medigap plan with the same or lesser benefits.
In Maine, Medigap enrollees can switch to a different Medigap plan with the same or lesser benefits at any time during the year, and all carriers must designate one month each year when Medigap Plan A is available on a guaranteed issue basis to all enrollees.
Missouri has an Anniversary Guaranteed Issue Period; anyone with a Medigap plan has a 60-day window around their plan anniversary each year during which they can switch to the same plan from any other carrier, guaranteed issue.
For people who are under 65 and eligible for Medicare due to a disability, Medigap availability depends entirely on state regulations, as there is no federal regulation requiring a guaranteed issue Medigap enrollment period for under-65 enrollees. 31 states have established a range of regulations regarding access to Medigap coverage for this population, although they vary considerably in scope.
Nationally, 23 percent of Medicare beneficiaries are enrolled in a Medigap supplement, but it ranges from a low of 9 percent in the District of Columbia to 51 percent in North Dakota.
Medigap plans are standardized, which means that a Plan F in Vermont provides the same benefits as a Plan F in Florida. But in 2010, average premiums for plan F (the most popular choice among Medigap enrollees) ranged from $139/month in Hawaii to $226/month in New York.
Medigap coverage can be priced in one of three ways: community rating, issue-age rating, or attained-age rating. As of 2013, eight states (Arkansas, Connecticut, Massachusetts, Maine, Minnesota, New York, Vermont, and Washington) require carriers to use community rating. Four states (Arizona, Florida, Georgia, and Idaho) require issue-age rating (carriers would also have the option to use community rating instead). The remaining 38 states allow premiums to be set on an attained-age basis, which means premiums rise as an enrollee gets older (carriers in those states can use issue-age or community rating instead, but most do not).
We have details on this data and more in our state-specific Medicare pages. So check them out if you’re curious about Medicare regulations and private plan options in your state.