Obamacare which goes into effect January 1, 2014, should not affect the Medicare Supplement market. However, there were two possible concerns: elimination of the “first dollar” coverage, and Medigap surcharges. But it looks, as of now, that everything will stay the way it has previously been without any dramatic changes in the Medigap market.
Obamacare and Medicare Supplement: “First Dollar” coverage and Medigap Surcharges
The most discussed Obamacare change that directly affects Medicare Supplement is the elimination of the “first dollar” coverage. “First dollar” coverage means that you pay a premium that entitles you to avoid any out-of-pocket costs (Medigap Plan F). Based on recent plan F statistics, it is a very popular Medigap route.
The National Association of Insurance Commissioners (NAIC) argued against imposing nominal cost sharing to Medigap plans C and F due to lack of evidence that this would decrease utilization of those plans.
The other change, quite related to the first, is applying surcharges for higher-level plans such as Plan F. This will significantly reduce appeals of those plans pushing people more in the direction of cost-sharing plans.
Recently, the US Department of Health and Human Services (HHS) agreed with the NAIC’s judgment. So, for now anyway, everything remains status quo.
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