Members of the Senior Issues Task Force are trying to figure out how to tell U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius just how important they believe generous Medicare supplement insurance products are to older consumers.
The task force, an arm of the Health Insurance and Managed Care Committee at the National Association of Insurance Commissioners (NAIC), has been working on an expression of support for Medicare supplement products, or Medigap products, that sharply limit consumers’ out-of-pocket health care costs.
The expression of support would go into a cover letter that would accompany an NAIC review of the existing NAIC Medigap model regulation.
Sebelius has asked the NAIC to think about ways to change the NAIC’s Medigap model regulation.
The Obama administration wants the NAIC and the states to change the rules governing Medigap plans C and F, which hold purchasers’ out-of-pocket costs to especially low levels. Officials say Medicare enrollees who buy Medigap plans C and F now have no incentive to be good health consumers. The Obama administration wants the plans to add “nominal cost-sharing” features, to get the users to shop for care more carefully.
The Obama administration has also talked about the possibility of raising $2.5 billion over 10 years by imposing a surcharge on the Medicare enrollees who buy the “near first-dollar” Medigap products. The government would collect the surcharge by adding an amount equal to about 15% of the average Medigap policy premium onto a Medigap policy owner’s Medicare Part B premium.