At a glance: Medicare health insurance in Alabama
- Just over a million Alabama residents are enrolled in Medicare.
- 36 percent of Alabama Medicare beneficiaries select Medicare Advantage plans.
- Alabama residents can select from between seven and 31 Medicare Advantage plans in 2019, depending on their county.
- In Alabama, access to Medigap plans is limited for enrollees under age 65 (the state does not require insurers to offer plans to people under 65, and only two insurers do so). But 36 insurers sell plans to those 65+.
- A little more than a third of Alabama’s Medicare beneficiaries have stand-alone Part D prescription coverage. (Another 38% have Part D coverage integrated with Medicare Advantage.)
- Per-enrollee Medicare spending in Alabama is slightly higher than the national average.
Medicare enrollment in Alabama
As of November 2018, 1,026,654 Alabama residents were enrolled in Medicare. That’s nearly 21 percent of the state’s total population, compared with a little more than 18 percent of the United States population enrolled in Medicare.
Medicare covers most Americans who are age 65 or older, and it also covers disabled Americans. Nationwide, 84 percent of Medicare beneficiaries are eligible due to their age, but in Alabama, just 77 percent of Medicare beneficiaries are eligible due to being at least 65 years old. The other 23 percent are eligible due to a disability.
Alabama is tied with Kentucky and Mississippi for the highest percentage of disabled Medicare beneficiaries in the country. If we also consider the US territories, 31 percent of Medicare beneficiaries in American Samoa are eligible due to a disability, and Puerto Rico is tied with Alabama, with 23 percent of Medicare beneficiaries eligible due to disability.
Medicare Advantage in Alabama
Thirty-six percent of Alabama Medicare beneficiaries were enrolled in a private Medicare Advantage plan in 2017. Nationwide, the average was 33 percent. The remaining 64 percent of the state’s Medicare beneficiaries had opted instead for coverage under Original Medicare.
The availability of Medicare Advantage plans depends on where a person lives. There are 67 counties in Alabama, and the number of Medicare Advantage plans for sale in each county ranges from seven (Choctaw, Cleburne, Conecuh, Covington, Greene, Hale, Marion, Washington, and Wilcox counties) to 31 plans in Shelby County. It’s not a coincidence that the most populated counties have a higher number of available plans, as insurers tend to gravitate to areas where there is a large population.
Starting in 2019, there’s a Medicare Advantage open enrollment period (January 1 to March 31) during which people who are already enrolled in Medicare Advantage plans can switch to a different Medicare Advantage plan or drop their Medicare Advantage plan and enroll in Original Medicare instead. People who have Original Medicare can switch to Medicare Advantage during the annual open enrollment period in the fall (October 15 to December 7), with coverage effective January 1.
Medigap in Alabama
Medigap plans are used to supplement Original Medicare, covering some or all of the out-of-pocket costs (for coinsurance and deductibles) that people would otherwise incur if they only had Original Medicare on its own.
There are 36 insurers that offer Medigap plans in Alabama as of 2019.
Medigap plans are standardized under federal rules, and people are granted a six-month window, when they turn 65 and enroll in Original Medicare, during which coverage is guaranteed issue for Medigap plans, and insurers can’t use medical underwriting to determine eligibility or premiums. Federal rules do not, however, guarantee access to a Medigap plan if you’re under 65 and eligible for Medicare as a result of a disability.
The majority of the states have adopted rules to ensure at least some access to Medigap plans for enrollees under the age of 65, but Alabama is not among them. In Alabama, Medicare beneficiaries who are under 65 can apply for a Medigap plan, but coverage is not guaranteed issue and insurers can use medical underwriting to determine whether to issue a policy and at what price.
There are two insurers in Alabama that offer Medigap plans to enrollees who are under age 65. They offer Plans B, F, and/or high-deductible F, and their sample premiums are substantially higher than premiums for similar plans for a person who is 65.
A person who has Medicare prior to age 65 as a result of a disability does qualify for an open enrollment period, upon turning age 65, during which they can select any Medigap plan, guaranteed-issue, from any insurer offering plans in their area.
People under age 65 who are eligible for Medicare also have the option of enrolling, with standard premiums, in a Medicare Advantage plan, unless they have end-stage renal disease (in that case, the insurer can reject the application).
Medicare Part D in Alabama
Original Medicare does not cover outpatient prescription drugs. But Medicare beneficiaries can get prescription coverage via a Medicare Advantage plan, an employer-sponsored plan (offered by a current or former employer), or a stand-alone Part D plan.
As of November 2018, there were 356,917 Medicare beneficiaries in Alabama who were enrolled in stand-alone Part D prescription drug plans. That’s about 35 percent of the state’s total Medicare beneficiaries, as opposed to about 43 percent of all Medicare beneficiaries nationwide enrolled in stand-alone Part D plans. In addition, more than 386,000 Medicare beneficiaries in Alabama have Part D prescription coverage that’s integrated with their Medicare Advantage coverage.
For 2019 coverage, there are 29 stand-alone Part D plans available in Alabama, with premiums ranging from about $16 to $120 per month.
Medicare spending in Alabama
In 2016, Original Medicare spent an average of $9,888 per beneficiary in Alabama. That’s based on data that were standardized to eliminate differences in payment rates from one area to another, but it was only based on Original Medicare spending, so it did not include costs for Medicare Advantage enrollees. The national average that year was $9,533 per enrollee, so Medicare spending in Alabama was 4 percent higher than the national average. On the extreme ends of the spectrum, per-beneficiary Medicare spending was highest in Louisiana ($11,399) and lowest in Hawaii ($6,441).
You can read more about Medicare in Alabama in our Alabama Medicare guide. You can also contact the Alabama State Health Insurance Assistance Program if you have questions related to Medicare coverage in Alabama.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.