The big news this week was the announcement of changes to Medicare supplement insurance standards by the Centers for Medicare & Medicaid Services. The changes are detailed in the Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Notices document. The following changes apply to Medigap plans with policy years beginning on or after June 1, 2010:
- Issuers are prohibited from denying or conditioning the issuance or effectiveness of a policy, or discriminating in the pricing of the policy based on an individual's genetic information; also, issuers are prohibited from requesting or requiring an individual or family member of an individual to undergo a genetic test.
- Added Hospice coverage as a Basic ‘‘Core’’ benefit to all plans, as similar coverage was added as a basic benefit in plans ‘‘K’’ and ‘‘L’’.
- Deleted coverage for Preventive and At-Home Recovery. The NAIC concluded that Medicare Part B has changed to cover many more preventive benefits, and the usefulness of this benefit in a Medigap policy was significantly reduced, covering only part of an annual physical after Medicare covered the beneficiaries’ initial physical. The NAIC also concluded that the At-Home Recovery benefit was confusing and difficult to understand and administer, and changes to Medicare had made this benefit less meaningful.
- Created a new plan D, which is identical to the current plan D except that the At-Home Recovery benefit was deleted.
- Created a new plan G, which is identical to the current plan G except that the 80% Medicare Part B Excess charge benefit would be replaced by a 100% Medicare Part B Excess charge benefit, and the At-Home Recovery benefit was deleted.
- Eliminated the current ‘‘E’’, ‘‘H’’, ‘‘I’’ and ‘‘J’’ plans as they duplicated existing Plans.
- Created a new plan ‘‘M’’, which duplicates plan D but with a 50% coinsurance on the Part A deductible.
- Created a new plan ‘‘N’’ which duplicates plan D with the Part B coinsurance being paid at 100%, less a $20 copay per physician visit and a co-pay of $50 per emergency room visit, unless the beneficiary was admitted to the hospital.
These changes have created two sets of standardized plans which are known as the "1990 standardized plans" for plans with an effective date of coverage prior to June 1, 2010, and "2010 standardized plans" for those after. For those of you who are compelled to know the many details of the changes, click here. In the near future, once everyone has had some time to digest this information, we will post a blog regarding the implications of these important changes.