Medigap coverage in Massachusetts is handled differently than elsewhere in the nation. Due to the state’s unique laws regarding Medigap, seniors in Massachusetts may have to choose their coverage from a separate list of programs than those that are available nationwide. Even though there is diversity in the state’s Medigap plans, all three of the plans available for seniors in Massachusetts to purchase have several points in common, and they all work in substantially similar ways.
Medigap is a general term that describes supplemental insurance for Medicare recipients. If you are enrolled in Medicare and have to spend time in the hospital, for instance, you may be required to pay any outstanding deductibles and 20% of the overall cost of your care. Bear in mind that even a short hospital stay can cost upward of $10,000. Without Medigap coverage, you would have to pay at least $2,000 of the total bill, in addition to any remaining share of the cost. However, once enrolled in a Medigap plan – depending on the specific Medigap plan you have – you might owe much less than this amount for hospitalization and follow-up visits, and some Medigap plans cover a portion of the cost of prescription medications as well.
Some Medigap plans charge relatively low monthly premiums, but the co-payments are relatively high, while other plans have the opposite pricing structure and are well suited for sudden and very high-cost medical bills. Additional plans offer some balance of coverage, though specific benefits may be lacking, and you might end up paying out-of-pocket costs at the point of service.
All residents of Massachusetts who are (or will be) age 65 and over in 2020 are eligible for Medigap coverage, provided they are citizens of the United States and not otherwise excluded from Medicare and related programs. Disabled individuals under age 65 may participate in Medicare and its related Medigap programs, though some restrictions apply.
Enrolling in a Medigap plan in Massachusetts is relatively easy. Seniors who are currently enrolled in Medicare can speak with their caseworker about finding supplemental coverage, or they may visit the state’s online Medicare portal for more information. The federal Medicare website also offers a finder tool for residents of Massachusetts that can help to identify qualifying plans. Most of these plans can be applied for online. Private health insurance companies also offer online search and application options, though specific companies generally only provide applications for their own coverage.
All seniors in Massachusetts who are eligible for Medicare are also, by law, eligible for private supplemental coverage. Massachusetts is one of only three states (the others are Minnesota and Wisconsin) that significantly modifies federal Medigap requirements for its own citizens. One rule that is unique to the state is that every insurance provider in Massachusetts must provide at least one plan option for Medigap coverage, which helps increase the availability of plans and gives seniors more options than they might otherwise have.
Standards for Medigap plans are set by the federal government, but some states, such as Massachusetts, have their own rules regarding how this supplemental coverage is handled for its residents. Complicating the picture further, many of the current Medigap plans are changing in 2020, with some options becoming unavailable for new recipients and other options becoming available for the first time. New fee structures and coverage limits also promise major changes to the way seniors in Massachusetts pay for their healthcare.
Starting in 2020, changes to Part B deductible coverage affect the way this gap is covered for new recipients. Legacy Medicare recipients may continue with their current plan; however, the former Supplement 1 plan is no longer offered to new applicants. In general, Medigap customers in Massachusetts now have three basic plans:
CORE is the most basic Medigap coverage option in Massachusetts. Under this plan, seniors are covered with co-insurance for Part A hospitalization charges, which helps manage the deductibles for inpatient care. The CORE plan also provides for an additional 365 days of Part A coverage after those benefits have run out or otherwise ended. The plan also picks up the co-insurance for Part B, which can be 20% of the Medicare allowable charge. CORE covers the cost for the first three pints of donated blood per calendar year, and recipients can receive up to 60 days of inpatient care for mental health concerns at Medicare-participating institutions.
Supplement 1 provides virtually the same coverage as CORE, plus the $1,420 deductible for Part A coverage and nursing care facility co-insurance. The plan also covers the Part B deductible for legacy Medicare recipients, though new participants in 2020 will not have this option due to changes in federal law. Supplement 1 goes beyond CORE in providing 120 days of inpatient care for recipients admitted to a mental health hospital.
Supplement 1 also has some elements of Plan F Medicare coverage, such as first-dollar coverage for overseas travel. Recipients enrolled in a Supplement 1 plan who become injured or ill in a foreign country may have all of their medical expenses covered while being treated overseas. This part of the coverage plan includes little or no out-of-pocket expenses for care that would be authorized in a domestic medical center.
The 1A Plan being offered for new Medigap customers in 2020 is very similar to a standard federal Plan G. This supplemental plan basically covers the entire gap of co-insurance for standard Medicare, except for the Part B deductible. This cost is set at a federal maximum of $198 for 2020, which makes a 1A Plan very attractive for Medicare recipients who would like to minimize their risk of incurring high deductibles and other incidental costs. 1A Plans tend to charge higher monthly premiums than the other Medigap coverage options, but for seniors with frequent medical needs, it may be worth it, since this plan pays virtually 100% of costs after the portion covered by Medicare.
Federal law does not currently require insurance carriers to provide Medigap plans for disabled adults under age 65; however, Massachusetts state law does require it. While enrollment and participation requirements vary between companies, every Medigap provider in the state does offer at least one plan for disabled adults.
Medicare Advantage is a separate type of co-insurance that does not integrate with Medigap coverage. Though both types of insurance are offered in Massachusetts, and both have similar enrollment requirements, they cannot both be used at the same time, and federal law does not permit beneficiaries to enroll in both plans. Medicare Advantage plans tend to offer coverage for a longer list of benefits than typical Medigap plans, although they often charge higher rates and may include more out-of-pocket costs than either Medigap or traditional Medicare.
Some seniors currently have prescription medication coverage through their Medigap plans, but this is a very small minority of recipients. Under federal law, Medigap plans sold after January 1, 2006, are not permitted to include a Part D prescription medication benefit. Seniors who purchased a Medigap plan after this date must buy into a Medicare-approved prescription medication benefit plan to have coverage for Part D expenses. Otherwise, beneficiaries are expected to pay for the entire cost of their uninsured prescription medications out-of-pocket at the time they fill their prescriptions.
Medicare Part D premiums vary somewhat with the details of coverage and whether the beneficiary has to pay a penalty rate. Applicants who enroll in Medicare Part D coverage more than seven months into the open enrollment period may be required to pay extra monthly premiums to make up for the gap in coverage, and the extra amounts charged depend on how long the coverage gap lasted. The lowest monthly premium for Part D currently available in Massachusetts is $15 a month, although low-rate plans tend to lack coverage for name-brand medications and experimental prescriptions.
Massachusetts law requires insurance providers to charge community rates to all beneficiaries, regardless of other factors. This means all applicants are quoted the same prices for equivalent care, depending only on the geographic area of the state in which they reside. Age, health, and other factors do not affect these quotes; however, there is a large variance in prices by area. Rates also change on a fairly frequent basis, so the most reliable way to obtain a quote is by contacting an insurance broker or agent who handles Medigap in Massachusetts.