Health Insurance for the Elderly:
Owning Duplicate Policies Is Costly and Unnecessary
HEHS-94-185: Published: Aug 3, 1994. Publicly Released: Aug 3, 1994.
- Full Report:
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
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.