Beginning in June 2010, Medicare supplement premiums are set to drop when they are “modernized” as part of the Medigap Modernization Act. This will present the opportunity for health insurance companies to create new blocks of business with lower premiums.
The modernization of Medicare supplement plans will affect only plans created after June and will be based on a new group of enrollees with no history of claims against the insurer. One company, UnitedHealth, will be offering specific premium information beginning in March.
Seniors who will be turning 65 in the next few months can enroll in an existing Medicare plan and switch to a modernized plan in June, thanks to the six month open enrollment period.
Currently, AARP and Blue Cross Blue Shield accept seniors up to age 67 for Medicare supplements without a medical history. Beginning in June AARP plans to expand the period of “guaranteed issue” to age 71. Therefore, a 70-year-old who has been on Medicare Advantage for five years will be able to get the AARP Medicare supplement with no questions asked.
There are five main changes coming as a result of the modernization of Medicare supplements:
1. Plans E, H, I and J will no longer be available.
2. Plan G will be adjusted. The home care benefit will be eliminated and excess charges covered at 100 percent.
3. Cheaper Plans M and N will be offered. Co-payments for doctor and ER visits will be included in these new plans.
4. Any company offering Plan A must also offer Plan C and Plan F.
5. A hospice benefit must be part of any new plan.