Medigap Insurance: Proposals for Regulatory Changes and 1988 Loss Ratio Data

GAO discussed the marketing and performance of Medicare supplemental (Medigap) insurance. GAO noted that: (1) in 1980, Congress established federal criteria for state insurance regulatory programs that retained the states' role as primary insurance regulators if they adopted requirements at least as stringent as those adopted by the National Association of Insurance Commissioners; (2) reports of abuses in the marketing of Medigap insurance have continued; (3) proposed legislation would expand protection of consumers who purchase Medigap insurance, including reducing the combinations of benefits that insurers may offer, raising the loss-ratio standard, and encouraging states to implement programs to aid consumers in purchasing coverage; (4) the proposed legislation would suspend premiums and benefits of a Medigap policy that duplicates benefits under Medicare; and (5) enactment of the proposed legislation would improve consumer protection for insurance purchasers and would improve the economic value of the insurance.