This is one of the most frequently asked questions that we receive from clients and people that we talk to on a daily basis about Medicare and Medigap insurance. So, how are Medigap plans affected by “Obamacare”?
The answer is a short and easy one – simply, they are not directly affected, or impacted, by the PPACA, or “Obamacare”, legislation, due to the fact that the plans are supplemental in nature and not “full-blown” medical plans. As such, Medigap plans are not subject to the requirements and restrictions on individual plans for people under age 65.
For people that have a Medigap plan, Medicare is, of course, still the primary coverage. Medicare covers, in general, 80% of the total, overall medical costs after doctor’s office (Part B) and hospital (Part A) deductibles. The Medigap plans step in to pay the Medicare deductibles (in most cases, depending on which Medigap plan you have) and the 20% after Medicare pays. The way this works – and the type of coverage that Medigap plans provide – has not been changed or impacted by the passage of the “Obamacare” legislation.
On the contrary, Medigap plans have historically been one of the more stable types of insurance since they became standardized in 1992. The actual plan designs have changed a couple of times since then, the last change occurring June 1, 2010; however, the way that the plan works and the overall outline of what they do has not changed.
Additionally, because of the standardization of plans (i.e. one company offers the same coverage plans as another, although rates may differ), the plans are relatively easy to understand, not nearly as complex as “under-65” individual insurance plans, and can be easily compared to one another.
Overall, many analysts project that “Obamacare” will cause some strain on the financial health of insurance companies that have elected to continue to offer individual plans. This may cause some trickle-down to the portions of those companies that do Medigap insurance. However, this is uncertain at best, and for now, Medigap plans look like a safe bet to remain the same post-“Obamacare” as they were before the law was enacted.
If you have any questions about this or would like to compare Medigap plans for your area, please call us at 877.506.3378 or visit our website at http://medicare-supplement.us.