A Balanced and Fair Medigap Market Benefits Consumers, Reflects New Realities for Medicare Beneficiaries

Andrew Hetzel

| 2 min read

Blue Cross Blue Shield of Michigan’s move away from subsidized rates for its Medicare supplement plans (Legacy Medigap) toward market-based pricing supports the new realities of today’s modern Medicare marketplace. Medicare has changed significantly, and offers numerous coverage options for seniors and persons with disabilities.
  • Medigap is not the only choice Medicare beneficiaries have today. In 1980 – when subsidies began – Medigap was the only vehicle for seniors and persons with disabilities to make their Medicare coverage “whole.” Back then, state policymakers had a special interest in creating a safety net subsidy program through Blue Cross to help beneficiaries afford coverage. Today, Medicare Advantage plans provide expanded coverage that combines Medicare Parts A and B, Part D drug coverage, plus supplemental coverage, and additional benefits like dental and vision coverage. Offered by a number of competing health insurance companies, these plans are very popular in Michigan today. The bottom line is that the market has changed to offer more comprehensive coverage options and more choice to Medicare consumers in Michigan.
  • Consumers benefit from a fair and balanced Medigap marketplace. Consumers benefit from a marketplace where companies compete on a level playing field for their business. Because Blue Cross’ subsidies significantly reduce the price of its Medigap product, Blue Cross had a competitive advantage over other companies in attracting and retaining membership. In fact, Blue Cross currently has more than twice the number of Medigap members as the next closest competitor. The Michigan Health Endowment Fund recently reinforced the importance of market fairness. Now responsible for providing subsidies to lower-income (adjusted gross income) Medigap customers, the Endowment Fund determined that the subsidy program is available to customers of multiple insurance companies – not just Blue Cross’ customers.
  • Subsidies remain available to those most in need. In reforming Blue Cross’ regulations to require the company to pay taxes and make payments totaling $1.56 billion to the Michigan Health Endowment Fund, state policymakers made sure that Medigap subsidies were part of the Endowment Fund’s mission to help the vulnerable. Starting January 1, 2017, subsidies for Medigap will be available to Medigap enrollees whose annual household incomes (adjusted gross incomes) are below $26,730 for an individual or below $36,045 for a couple.
Y0074_O_MAMedigapblog CMS Accepted 07102016 Medicare Plus BlueSM, BCN AdvantageSM and Prescription BlueSM are PPO, HMO-POS, HMO and PDP plans with a Medicare contract. Enrollment in Medicare Plus Blue, BCN Advantage and Prescription Blue depends on contract renewal. Photo credit: Hans Splinter

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Blues Perspectives

Jul 28, 2016 at 8:26pm

Hi Sharon, Thanks for reaching out! Please fill out this form, http://miblues.co/1Bb6oI4, and one of our specialists will reach out to help find the plan that best suits your needs. Best, Naomi

Sharon Backers

Jul 28, 2016 at 5:52pm

Iam going to need prices on a medicare plus blue , where do I turn to find the right plan for me.

Blues Perspectives

Jul 15, 2016 at 5:24pm

Hi Terry, We hear your concerns and appreciate the feedback. Since this is the first time in five years that we’ve increased rates, we understand the adjustment can be jarring. As a result, we are keeping current rates in place until January 1, 2017, to allow our members adequate time to carefully examine all their coverage options. While we are confident that our new Medigap premiums will be on par with those offered by other companies, we have several coverage options available to seniors. If you have questions about your, or a loved one's, coverage, please call the phone number on the letter you received or fill out this form, http://miblues.co/1Bb6oI4 and we will reach directly out to you. Thank You, Naomi

Terry Beegle

Jul 15, 2016 at 1:08am

While I understand the ever increasing costs of insurance, doubling the cost all at once is difficult for seniors on a fixed income to swallow. They are being forced to face devastating medical bills or being reduced to paupers by the insurance company's and the states. Not to mention the confusion caused by the high costs. Sending the seniors into a tailspin isn't giving anyone a excepting attuide.

Blues Perspectives

Jul 12, 2016 at 1:06pm

Hi Marjorie, We’d like to help. We are here to assist members in finding coverage that best fits their needs and budgets. If you would like to speak to one of our advisors, they can set up an appointment for you to discuss your options during the Annual Election Period this fall and answer any questions you have right now. You can reach an advisor by calling the number on the letter you received or by following the instructions on this link: http://miblues.co/29OAEjf

MI Blues Perspectives is sponsored by Blue Cross Blue Shield of Michigan, a nonprofit, independent licensee of the Blue Cross Blue Shield Association