There are many individuals that become eligible for Medicare under the age of 65 if they have been disabled and getting Social Security Disability Income for two years. They are automatically enrolled in Medicare A and B effective on the 25th month of their disability payments. However, until 2025, these people were limited in their benefit options with Medicare. Last Spring, a new bill was introduced and passed for Medicare beneficiaries under the age of 65 giving them more options for supplemental coverage in Indiana. [See SEA 215 bill: https://www.in.gov/ship/files/SEA215_release1.pdf] Keep reading for more on this latest development in our state!
Before the New Rule
The primary feasible option for coverage available to Medicare beneficiaries under the age of 65 prior to the new rule was Advantage Plans. Advantage Plans do not exclude anyone based on past medical claims, pre-existing conditions or for any health-related behaviors such as smoking or being overweight. Advantage Plans are a great option with most having $0 premiums and include things that Medicare does not such as case management, dental, vision, hearing and fitness incentives. However, all Medicare beneficiaries should have access to the same options, and thus, the new rule was passed last Spring and implemented in January of 2025. Let’s explore the new option and how to access it.
New Rule - Medigap Plans with Guaranteed Issue
The other option available to Medicare beneficiaries over the age of 65 is an array of Medigap plans. These plans fill in the gap of out-of-pocket costs associated with Original Medicare. One of the greatest benefits is that there is no network. Medigap plans or ‘supplements’ as they are known by many, have exclusions and denials for pre-existing conditions unless you are in a certain window where you can enroll as ‘guaranteed issue’. This means that you can select and enroll without any health underwriting denials or exclusions. This typically occurs when people turn 65 or leave an employer plan. With the new rule in Indiana, beginning in January of 2025, beneficiaries under the age of 65 have the opportunity to enroll with guaranteed issue into a same supplement plan as everyone else on Medicare. This is a big change as this simply was not an option until now. The enrollment period lasts until June 1st, 2025, for anyone under 65 who has had Medicare for some time. After that period, everyone will get a six-month enrollment window from when their Medicare starts, at any age. Important note: If currently enrolled in an Advantage Plan, and you drop that to enroll in a Medigap plan, you will also need to add a stand alone Part D drug plan for drug coverage!
The Costs
As with everything regarding Medicare and government involvement, there is a cost. There is an additional cost to the beneficiary enrolling but also a cost to everyone else. What do I mean? As with every new initiative, there is a ripple effect. In theory, these individuals with long term disability or with chronic illnesses, making them eligible for Medicare in the first place have higher medical needs and medical costs. Therefore, the new rule allows the insurance companies to charge up to 200% of the regular rate for a same Medicare beneficiary over 65 in a given area. And theoretically, these individuals have lower income because they are living on SSDI. So, for example, a quality Plan G with a reputable Carrier may cost about $120 per month for a 65 year old enrolling with guaranteed issue. For someone under the age of 65 with SSDI enrolling guaranteed issue, the cost for the same plan could be $240 per month.
Agent Involvement
Due to the potential higher cost to the insurance companies for covering these individuals, one of the ways to keep cost and enrollment contained is that they are not paying any agent commissions on these plans nor giving agents the ability to access client accounts in the same way to serve them. This is a big problem in that this vulnerable population will not likely have a local advocate or qualified licensed professional to help navigate the complicated Medicare system. They will be left to determine what plan is best, compare costs and then call the Carrier through an 800 number to enroll. The other option is assistance through SHIP, which is a bit better, but understand those are volunteers who are not licensed and get about a week of training on Medicare.
Something is Better Than Nothing
While it still may not be the best solution, at least progress is being made. Hopefully, this blog will soon be outdated as more work is done and changes are made to get a wider range of affordable options for all Medicare beneficiaries. Future endeavors will hopefully also lead to fair compensation to licensed local agents for research, enrollment, and servicing Medigap plans for folks under 65! Fingers crossed…..
CDI is here to help you manage your healthcare costs and find the best options for your unique situation. We can meet in person or virtually. Reach out if you would like more information. Email carrie@cdi-cares.com or check out www.cdi-cares.com for a contact page and other helpful blogs.
