As the national Debt Ceiling debate continues, lawmakers are considering a change in Medicare Supplement Insurance coverage. The main debate is that Medicare Supplement Insurance (Medigap) provides many senior citizens with "first-dollar" coverage, meaning that if you have Medicare and a Medicare Supplement Policy, you do not have to pay anything when you visit the doctor or hospital - no out-of-pocket expenses. Your Medicare Supplement Policy would essentially cover you from day one.
There are about 47 million people enrolled in the federal Medicare program, and of that amount, about 25% are enrolled into Medicare Supplemental Insurance. This proposed change has the potential to effect close to 12 million senior citizens on this type of coverage.
The proposed changes are to essentially restrict Medicare Supplement Companies from providing "first-dollar coverage". Medicare Supplement Plans would only be allowed to cover expenses after a deductible was met. According to the proposed changes, seniors may have the option to keep first-dollar coverage, but they would have to pay an additional $530 per year to Medicare in order to keep this convenience.
The reasoning behind this change is that congressional budget experts have estimated that changing to this proposed system would save Medicare approximately 53 billion over the next 10 years. They feel that many senior citizens with a Medigap policy that provides first-dollar coverage do not hesitate to visit the doctor, even for unnecessary visits. Having to share the cost in the form of a deductible and removing first-dollar coverage would make senior's think twice before visiting a doctor. Senior's would only visit the doctor if the reason was truly necessary.
Defending Medicare experts argue that senior citizens are already on a tight enough budget as it is, and could simply not afford a costly change like this.
Many may ask... What are the chances that this type of legislation would pass? We believe that due to the high political risk of changing Medicare benefits for senior citizens, most politicians and congressional leaders will stay far away from any negative changes like this. It is doubtful that any significant change will be implemented due to the Debt Ceiling debate.
We believe that Medicare Supplement Insurance will remain stable and be the the best choice for senior citizens on Medicare. If any changes are approved, it will likely take many years to implement, and the changes would likely be very subtle. At most, senior citizens may be required to pay a "small" annual deductible before the insurance policy would kick in. If changes are made and approved, insurance companies may be forced to eliminate plans like the Medicare Supplement Plan F, and make more plans similar to the way the current Medicare Supplement Plan G works today.
Our advice: Do not worry about this legislation significantly changing or hurting your Medicare Supplement Policy. We are willing to bet that this type of legislation will quickly be thrown out due to the lack of support by millions of senior citizens.
If you would like to know more about this legislation, or see if you can obtain a better rate on your Medicare Supplement Insurance Policy, please use the "Get Quotes" form on our website, or call one of our Medicare Specialists at: (855) 419-3826.
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