Delaware lawmakers look at creating a special enrollment period for those on a Medicare supplement policy looking to switch to another.
State Sen. Ray Seigfried (D-North Brandywine) introduces legislation that would make Delaware the 11th state to create a special open enrollment period for Medicare supplement policy holders 30 days before their birthday and 30 days after.
The new "birthday rule" would allow Medigap — Medicare supplement insurance sold by private insurance companies to help fill gaps in Original Medicare coverage — policyholders to switch to plans with equal or lesser benefits without the need to go through medical underwriting, a process where insurance companies examine an individual's health risk, which Seigfried believes can be discriminatory.
“This rule can be beneficial for many Medigap beneficiaries, as it allows them to compare prices, coverage options, potentially find a more affordable plan," Sen. Seigfried said.
It would also allow Medicare Advantage plan members, a plan that Delaware state retirees have argued requires stringent preauthorization requirements and provides insufficient benefits, to cancel their existing policy or enroll in Original Medicare with a supplemental plan following the underwriting process.
Representatives on behalf of America’s Health Insurance Plans (AHIP) — a trade association that lobbies on behalf of various insurance companies — and Highmark Delaware oppose the bill, arguing it would lead to higher premiums for seniors and decreased Medigap enrollment as seen in some other states with similar policies.
But Delaware Department of Insurance Senior Policy Advisor Chris Haas argues the statistics cited by insurance stakeholders show correlation without causation.
“We did expose the draft legislation to insurance industry stakeholders and note that many of the responses we received were concerningly misleading and inaccurate. While as of yesterday about 10 states do offer these plans, they all offer them a little bit differently in different environments," Haas said.
She says while a small impact on rates is possible, because various Medigap carrier shave been declining to write policies at all after a person's eligibility period, she argues the change in rate is akin to turning something exclusive into something that’s publicly offered.
"In recent years, consumers have reported increased barriers to accessing Medigap policies, whether adding coverage to Original Medicare, changing their Medigap plans, or trying to switch from Medicare Advantage to Medigap during federal enrollment periods when this is permitted. Medigap carriers refusing to write policies in these scenarios has caused consumer harm. It is an impossibility in other environments," Haas explained. "Imagine if you turn 65, selected an auto insurance plan and then essentially could never change your coverage because carriers would not write to you. That is essentially what Delawareans have experienced."
The legislation would also require issuers to notify those who are eligible and enrolled in their Medicare supplement policies of the dates of the open enrollment period at least 30 days before it begins and of any modification to the benefits provided by the policy under which the person is currently insured.
The bill cleared committee with virtually no discussion and now awaits consideration by the full Senate.
