NAIC Cautions Against Added Medigap Cost Sharing

In a letter to HHS Secretary Kathleen Sebelius, the National Association of Insurance Commissioners (NAIC) says that it opposes further cost sharing in Medigap Plans. One in five people with Medicare has a Medigap plan to help cover cost sharing and other health care costs that are not covered by Medicare. Some policymakers have suggested limiting Medigap coverage by increasing out-of-pocket costs for beneficiaries.

But the NAIC says that increasing costs would not only harm beneficiaries, but may also lead to increased costs in the system. After extensive research, the NAIC concluded, “We were unable to find evidence in peer-reviewed studies or managed care practices that would be the basis of nominal cost-sharing designed to encourage the use of appropriate physicians’ services. Therefore, our recommendation is that no nominal cost-sharing be introduced to Plans C and F.”

Under the Affordable Care Act, the NAIC was directed to review and revise the standards for Medigap Plan C and Plan F benefits. A task force of state insurance regulators, insurers and trade associations, consumer advocates, and other Medicare experts spent almost two years reviewing literature on cost-sharing and patient behaviors.

Judith Stein, Executive Director of the Center for Medicare Advocacy said, “When required to pay beyond their means, people skip needed medical care and treatment, leading to poor health outcomes, increased emergency room visits, and hospitalizations.” The NAIC says that its findings will be a significant consideration as policymakers grapple with how to bring down the nation’s deficit.

Last Updated 06/29/2022

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