Rule fills Medigap lack for disabled

Insurers would be required to sell supplemental policies to Medicare beneficiaries younger than age 65 under a rule approved by a legislative panel Tuesday.

The rule would implement Act 684, sponsored by Sen. Jason Rapert, R-Bigelow, and passed by the Legislature this year.

Supplemental policies, also known as Medigap polices, help cover out-of-pocket charges, such as deductibles and co-payments, for people enrolled in the federal insurance program for the elderly and disabled.

A 1990 federal law bars insurers who sell supplemental policies from discriminating against people age 65 and older based on their health status as long as the applicant applies for coverage within six months of becoming eligible for Medicare.

But that law doesn’t include a similar protection for those younger than 65 who qualify for the federal health insurance program on the basis of a disability.

“Over the last three or four years, we’ve had many people email the department wanting to know why, if they have a disability on Medicare, they can’t buy [a supplemental policy], and Sen. Rapert responded,” Booth Rand, managing attorney for the state Insurance Department, told the House and Senate insurance and commerce committees on Tuesday.

Some states already have their own requirements. According to the federal Centers for Medicare and Medicaid Services, 31 states required insurers to make at least one type of supplemental policy available to beneficiaries under age 65 as of May this year.

Of the more than 595,000 people in Arkansas covered by Medicare in 2015, more than 135,000 were under age 65 and qualified based on a disability, according to the Centers for Medicare and Medicaid Services.

Under the Insurance Department rule, insurance companies in the state would be required to make at least one type of supplemental policy available to Medicare beneficiaries under age 65 by July 1.

Some insurance companies plan to make such policies available even before the requirement takes effect, Rand said.

Insurers will set rates for those under 65 separately from those for older Medicare beneficiaries, Insurance Department spokesman Ryan James said.

As with beneficiaries 65 and over, a company would not be able to charge an applicant more based on that person’s health status as long as the person applies within six months of enrolling in Medicare, he said.