Health Insurance for the Elderly:

Owning Duplicate Policies Is Costly and Unnecessary

HEHS-94-185: Published: Aug 3, 1994. Publicly Released: Aug 3, 1994.

Additional Materials:

Contact:

William J. Scanlon
(202) 512-7114
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed Medigap insurance policies, focusing on the: (1) potential for duplicate coverage among elderly Medicare beneficiaries; and (2) necessity for a beneficiary covered by an employer-sponsored retiree plan to purchase a Medigap policy.

GAO found that: (1) owning multiple health insurance policies to supplement Medicare is both costly and unnecessary; (2) about 3 million elderly Medicare beneficiaries paid about $1.8 billion in 1991 for potential duplicate coverage; (3) employer-sponsored plans usually provide reasonable comprehensive coverage; (4) about 500,000 Medicare beneficiaries who were also eligible for Medicaid spent about $190 million on unnecessary supplemental insurance; (5) employer-sponsored plans have become less attractive because of increasing costs and tighter eligibility requirements; (6) federal Medigap requirements provide a one-time open season for people to purchase Medigap insurance; and (7) Congress could change the federal Medigap law to guarantee a Medigap open season for retirees whose employer-sponsored plans are terminated or substantially changed or require a periodic open season for all Medicare beneficiaries.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Section 4031(a) of the Balanced Budget Act of 1997 amended section 1882(s) of the Social Security Act to require Medigap insurers to offer policies to persons whose employer-sponsored Medicare supplement plans terminate. Insurers cannot discriminate in pricing the policy because of health status, claims experience, receipt of health care, or medical condition, nor can they impose a pre-existing condition exclusion under the policy.

    Matter: Congress may wish to consider amending the law to provide a mechanism for retirees to obtain Medigap insurance when a Medicare beneficiary's plan is subsequently modified or discontinued by the employer.

 

Explore the full database of GAO's Open Recommendations »

Oct 18, 2017

Oct 4, 2017

Oct 3, 2017

Sep 29, 2017

Sep 13, 2017

Sep 12, 2017

Sep 8, 2017

Sep 7, 2017

Looking for more? Browse all our products here