NAIC to Speak Up for Medigap

The National Association of Insurance Commissioners (NAIC) is about to mount a fierce battle to defend the Medicare supplement insurance program against any efforts to cut coverage or revamp plan design.

The NAIC, Kansas City, Mo., is preparing to send members of Congress a letter warning of dire consequences to seniors and extreme marketplace disruption if budget cutters tamper with Medigap.

The NAIC Health Insurance and Managed Care Committee talked about the letter Monday during a conference call that was arranged to take the place of a session originally scheduled to occur in Philadelphia at the NAIC’s summer meeting. The meeting was canceled as a result of Hurricane Irene.

Members of the Joint Select Committee on Deficit Reduction – the 12-member “Super Committee” that is supposed to find $1.2 trillion in deficit reductions by Thanksgiving – have sparked debate about Medigap by talking about proposals for eliminating or restricting the ability of Medigap plans to provide “first-dollar” coverage for Medicare enrollees.

About one in five Medicare enrollees has Medigap coverage, according to the Henry J. Kaiser Family Foundation, Menlo Park, Calif.

Enrollees use the products to handle the co-payments, deductibles and coinsurance amounts imposed by the cost-sharing arrangements built into the Medicare Part A hospitalization program and the Medicare Part B physician services program.

Critics of first-dollar coverage say it encourages Medicare enrollees to get care that may not really be necessary; advocates of keeping current Medigap plans as is say first-dollar coverage can reduce financial hardship and, in some cases, encourage seniors to get the care needed to prevent minor problems from becoming big problems.

One of the most vocal opponents of efforts to change Medigap program rules, Florida Deputy Insurance Commissioner Mary Beth Senkewicz, told other regulators on the call that she is extremely concerned about the effects of any changes on policies that are already in force.

Senkewicz, whose boss, Florida Insurance Commissioner Kevin McCarty, chairs the Senior Issues Task Force at the Health Committee, said changes affecting in-force policies could shift costs to seniors who have not prepared for such expenditures, cause “major market disruptions,” and lead to legal issues such as impairment of contracts and due process problems.

Even on a prospective basis, eliminating Medigap first-dollar coverage would shift more costs to seniors, call participants said.