At a glance: Medicare health insurance in Arizona
- Nearly 1.3 million Arizona residents have Medicare coverage.
- About 39 percent of Arizona Medicare beneficiaries had Medicare Advantage plans as of 2017. (Most of the rest had Original Medicare, but some had Medicare Cost plans.)
- 60 insurers offer Medigap plans in Arizona, but none offer coverage to people under age 65.
- Arizona’s Part D enrollees are split roughly equally between those with stand-alone Part D plans and those with Part D integrated with Medicare Advantage.
- Per-enrollee Original Medicare spending was about $8,700 in 2016 (about 9 percent lower than the national average).
Medicare enrollment in Arizona
As of November 2018, there were 1,271,695 Arizona residents with Medicare coverage. That’s a little less than 18 percent of the state’s population, compared with a little more than 18 percent of the United States population enrolled in Medicare.
A person can gain eligibility for Medicare due to age (being at least 65) or due to disability. In Arizona, 13 percent of Medicare beneficiaries were eligible due to a disability as of 2017, while 87 percent were eligible due to their age. Nationwide, 16 percent of all Medicare beneficiaries are eligible due to a disability, but there is quite a bit of state-by-state fluctuation: In Kentucky, Alabama, and Mississippi, 23 percent of Medicare beneficiaries were disabled as of 2017, while in Hawaii it was just 9 percent.
Medicare Advantage in Arizona
In most areas of the country, Medicare beneficiaries can choose whether they want to use Original Medicare (coverage provided directly by the federal government) or enroll in a private Medicare Advantage plan.
39 percent of Arizona Medicare beneficiaries had Medicare Advantage coverage as of 2017, compared with an average of 33 percent nationwide. Most of the rest of the state’s Medicare beneficiaries had coverage under Original Medicare, but there are also some enrollees in Arizona who have Medicare Cost plans.
There are Medicare Advantage plans for sale in all 15 counties in Arizona in 2019, but plan availability varies considerably from one part of the state to another. In part of Pinal County, there are only two plans (the rest of Pinal County has 31 plans available), while residents in Maricopa County can select from among 41 different Medicare Advantage plans.
Each fall, the Medicare annual election period, from October 15 to December 7, gives Medicare beneficiaries the option to switch between Medicare Advantage and Original Medicare. And as of 2019, Medicare Advantage enrollees have access to a Medicare Advantage open enrollment period (January 1 to March 31) during which they can switch to a new Medicare Advantage plan or drop their Medicare Advantage plan and enroll in Original Medicare instead.
Medigap in Arizona
Original Medicare beneficiaries who want help paying some or all of their out-of-pocket costs can purchase Medigap plans (also known as Medicare supplement plans). Medigap plans are issued by private insurers, but are standardized under federal rules, with ten different plan designs (differentiated by letters, A through N). The standardization makes it fairly easy to compare plans – plans can differ in price and in things like customer service, but the benefits offered by Plan A, Plan C, Plan F, etc. are the same regardless of which insurer offers the coverage.
284,584 Arizonans were enrolled in Medigap plans as of 2016, according to data collected by AHIP. There are 60 insurers licensed to sell Medigap plans in Arizona. According to an analysis conducted by Business Insider, the average cost for Medigap Plan F (the most popular plan) in Arizona in 2016 was about $143/month.
Unlike Medicare Advantage and Medicare Part D plans, there is no annual open enrollment period for Medigap plans. Instead, federal regulations allow for a six-month guaranteed-issue window that begins when a person is 65 and enrolled in Medicare Part B. After a person’s enrollment period ends (and unless the person qualifies for one of the limited guaranteed-issue rights), Medigap insurers can use medical underwriting to determine whether an applicant is eligible for coverage, and if so, at what price.
Federal rules do not grant a guaranteed issue open enrollment period for Medigap if the applicant is under 65 and enrolling in Medicare as a result of a disability. The majority of the states have implemented rules ensuring at least some access to Medigap plans for enrollees who are under the age of 65, but Arizona is not among them.
In 2009, the Arizona Department of Insurance announced that out of 53 insurers offering Medigap plans, five were offering coverage to disabled beneficiaries under the age of 65. But as of 2019, there were 60 insurers licensed to sell Medigap plans in the state, and none of them were offering coverage to people under the age of 65.
Arizona residents who are Medicare-eligible prior to 65 as a result of a disability do have the option to enroll in a Medicare Advantage plan (unless they are eligible for Medicare due to end-stage renal disease, as Medicare Advantage insurers are not required to allow ESRD patients to join their plans). Medicare Advantage plans do have built-in out-of-pocket caps, so they may appeal to some disabled Medicare beneficiaries who would otherwise have Original Medicare without any caps on out-of-pocket costs.
Disabled Medicare beneficiaries qualify for a Medigap open enrollment period once they turn 65. At that point, they can enroll in any Medigap plan available in their area, without medical underwriting.
Medicare Part D in Arizona
Original Medicare does not cover prescription drugs. Some beneficiaries have employer-sponsored coverage to supplement their Medicare, and others have supplemental Medicaid, both of which can provide prescription coverage. But enrollees without either of those options need to obtain coverage under a Medicare Medicare Part D plan. Part C coverage can be purchased on its own, as a stand-alone plan, or as part of a Medicare Advantage plan that includes Part D prescription drug coverage.
In 2019, insurers in Arizona are offering 28 stand-alone Part D plans with premiums ranging from about $12 to $98/month.
468,268 Arizona Medicare beneficiaries had stand-alone Part D plans as of late 2018, and another 471,171 had Part D coverage as part of their Medicare Advantage plans.
Medicare spending in Arizona
In 2016, Original Medicare per-beneficiary spending averaged $8,692 in Arizona (the data were standardized to account for regional differences in payment rates, but did not include costs for Medicare Advantage enrollees).
Nationwide per beneficiary Original Medicare spending that year averaged $9,533, so Medicare spending in Arizona was about 9 percent lower than the national average. Louisiana had the highest average per-beneficiary Original Medicare costs, at $11,399, while Hawaii had the lowest, at just $6,441.
You can read more about Medicare in Arizona in our state Medicare guide. You can also contact the Arizona State Health Insurance Assistance Program (SHIP), with questions related to Medicare coverage in Arizona.
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.