Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 9, 1991 TAG: 9104090256
SECTION: NATIONAL/INTERNATIONAL PAGE: A1 EDITION: METRO
SOURCE: The New York Times
DATELINE: WASHINGTON LENGTH: Medium
The nine alternatives would greatly simplify the choice for an elderly person seeking private "Medigap" insurance to pay the hospital charges, doctors' bills and other medical expenses not covered by Medicare.
Officials say premiums for these Medigap policies probably will be about the same as those for the current policies - $40 to $120 a month, depending on the age of the policyholder and the scope of the benefits.
Under a new federal law, insurers will be forbidden to offer Medigap policies other than those designed and approved by the commissioners. Twenty-three million Americans, or more than two-thirds of all the elderly, buy such policies.
The existing Medigap market offers thousands of policies with almost meaningless distinctions, and as a result elderly people often pay for unnecessary, duplicative health insurance.
Congressional investigators found cases in which insurance agents, using high-pressure tactics, sold more than 15 policies to the same person in three years.
The new law, signed by President Bush in November, directed the National Association of Insurance Commissioners to design up to 10 standard policies, each containing "a core group of basic benefits."
The nine "packages of benefits" soon will replace the thousands of policies sold to elderly people in the private market. Anyone who sold an unapproved Medigap policy would be subject to a fine of up to $25,000.
Medicare beneficiaries may renew policies they already have, or they may drop an old Medigap policy by discontinuing premium payments and then buying a replacement from among the standard policies that will come onto the market.
Earl R. Pomeroy, the insurance commissioner of North Dakota, led a group of 11 state insurance commissioners who designed the nine benefit packages. He said the new policies would "make comparison shopping much easier" for consumers and would increase price competition among insurers.
Insurers say they will be ready to sell the new policies by the end of this year. States will have an opportunity to adopt the association's standards through state laws and regulations. But if they do not act, the standards would go into effect automatically and insurers would have to submit policies to the Department of Health and Human Services for approval.
The nine policies offer a wide range of coverage. Every policy would pay for certain basic items not covered by Medicare, including payment for the patient's 20 percent share of doctors' bills and the patient's required contribution to the cost of a long hospital stay, which is $157 a day for the 61st through the 90th day.
Seven of the nine standard policies would also cover the deductible paid by Medicare beneficiaries for hospital care, now $628. The standard policies offer a variety of extra coverage for consumer expenses like home health care, prescription drugs, preventive care like cancer screening and flu shots, and emergency care for Medicare beneficiaries traveling in a foreign country.
Some of the policies also would cover the $100 deductible for doctors' services and would pay doctors' charges exceeding the amounts approved by Medicare.
"We want to offer a spectrum of coverage and establish an optimal range of choice for the consumer," Pomeroy said. "In the name of consumer protection, we will be restricting consumer choice. We will dramatically simplify the market and make it more comprehensible by driving from the market dozens of various benefit configurations, which will no longer be allowed."
The precise specifications for the standard policies are to be worked out by the insurance commissioners at meetings later this month and in June.
by CNB