Medicare in Arkansas

Arkansas began requiring Medigap insurers to offer plans to people under the age of 65 starting in 2018

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At a glance: Medicare health insurance in Arkansas

Medicare enrollment in Arkansas

As of mid-2020, there were 643,442 residents with Medicare in Arkansas. That’s more than 21 percent of the state’s population, versus a little less than 19 percent of the total US population enrolled in Medicare.

Medicare enrollment happens for most Americans when they turn 65 — either automatically, if they’re already receiving Social Security or Railroad Retirement benefits, or during a seven-month enrollment window when they can complete the process of filing for Medicare benefits.

But Medicare eligibility is also triggered for younger people if they’re disabled and have been receiving disability benefits for 24 months, or if they have ALS or end-stage renal disease. Nationwide, 15 percent of Medicare beneficiaries are under the age of 65, but 22 percent of the people with Medicare in Arkansas are eligible due to disability rather than age. Arkansas is tied with three other states — Alabama, Kentucky, and Mississippi — for the highest percentage of Medicare beneficiaries under the age of 65.

Medicare Advantage in Arkansas

Private Medicare Advantage plans are an alternative to Original Medicare, and are available in all counties in Arkansas in 2020. Plan availability varies across the state, with 10 plans available in Drew County, and 37 plans available in Pulaski County.

Only 22 percent of Arkansas Medicare beneficiaries had Medicare Advantage plans as of 2018, versus a nationwide average of 34 percent. But the share of Medicare beneficiaries with Medicare Advantage plans in Arkansas had grown to nearly 30 percent by mid-2020, in line with the nationwide increase in Medicare Advantage enrollment. At that point, there were 191,782 Arkansas residents with private Medicare coverage, while the other 451,660 beneficiaries had coverage under Original Medicare.

Original Medicare coverage is provided directly by the federal government, and enrollees have access to a nationwide network of providers. But people with Original Medicare need supplemental coverage (from an employer-sponsored plan, Medicaid, Medigap plans, and/or Medicare Part D plans) for things like prescription drugs and out-of-pocket costs (out-of-pocket costs are not capped under Original Medicare).

Original Medicare includes Medicare Parts A and B. Medicare Advantage plans include all of the benefits of Medicare Parts A and B, and the plans usually also have additional benefits, such as integrated Part D prescription drug coverage and coverage for things like dental and vision care. But Medicare Advantage insurers establish their own provider networks, which are generally localized and more limited than the nationwide network for Original Medicare. And out-of-pocket costs for Medicare Advantage plans are often higher than they would be if a beneficiary had Original Medicare plus a Medigap plan — but the latter combination also tends to have higher monthly premiums than a Medicare Advantage plan. There are pros and cons to either alternative, and no single solution that works for everyone.

Medicare Advantage enrollment is available when a person first becomes eligible for Medicare, and there are also annual windows during which beneficiaries can enroll or change their Advantage coverage. Medicare’s annual election period (October 15 to December 7 each year) allows Medicare beneficiaries the chance to switch between Medicare Advantage plans and Original Medicare (and add, drop, or switch to a different Medicare Part D prescription plan). And people who are already enrolled in Medicare Advantage plans also have the option to switch to a different Advantage plan or to Original Medicare during the Medicare Advantage open enrollment period, which runs from January 1 to March 31.

Medigap in Arkansas

Original Medicare does not limit out-of-pocket costs, so most enrollees maintain some form of supplemental coverage. More than half of Original Medicare beneficiaries get their supplemental coverage through an employer-sponsored plan or Medicaid. But for those who don’t, Medigap plans (also known as Medicare supplement plans) will pay some or all of the out-of-pocket costs they would otherwise have to pay if they had only Original Medicare. According to an AHIP analysis, 184,968 people had Medigap coverage in Arkansas as of 2018. That’s about 29 percent of the state’s Original Medicare beneficiaries (Medigap plans cannot be used with Medicare Advantage plans).

Medigap plans are sold by private insurers, but the plans are standardized under federal rules. There are ten different plan designs (differentiated by letters, A through N), and the benefits offered by a particular plan (Plan A, Plan F, etc.) are the same regardless of which insurer sells the plan. Pricing, however, varies from one insurer to another.

But Arkansas is one of just eight states where Medigap premiums cannot vary based on an enrollee’s age (referred to as “no age rating” in Arkansas), as long as the enrollee is at least 65 years old (more on this below). Medigap premiums in Arkansas can still vary based on tobacco use and medical history, with preferred premiums and standard premiums for various scenarios.

There are 43 insurers that offer Medigap plans in Arkansas, although plan availability varies by area; three of the insurers also offer Medicare Select plans (Arkansas Blue Cross Blue Shield, United Healthcare, and Sterling Life), while one (USAble Mutual) only offers Medicare Select plans. Medigap insurers in the state are required to maintain minimum loss ratios of at least 65 percent for individual policies, and at least 75 percent for employer group policies. This means that at least 65 percent (or 75 percent for group plans) of the premium revenue that the insurers bring in must be spent on enrollees’ medical claims.

Unlike other private Medicare coverage (Medicare Advantage and Medicare Part D plans), there is no annual open enrollment window for Medigap plans. Instead, federal rules provide a one-time six-month window when Medigap coverage is guaranteed-issue. This window starts when a person is at least 65 and enrolled in Medicare Part B (you must be enrolled in both Part A and Part B to buy a Medigap plan).

People who aren’t yet 65 can enroll in Medicare if they’re disabled and have been receiving disability benefits for at least two years or if they have ALS or kidney failure, and 22 percent of Arkansas Medicare beneficiaries are under age 65. Federal rules do not guarantee access to Medigap plans for people who are under 65, but the majority of the states have implemented rules to ensure that disabled Medicare beneficiaries have at least some access to Medigap plans. Arkansas joined them in 2018, with a law that was enacted in 2017 (Act 684). The law called for the Arkansas Insurance Department to amend the state’s rules so that people under age 65 would be able to purchase Medigap coverage, and work out the details by 2018 (prior to that, Medigap insurers in Arkansas did not have to sell plans to people under the age of 65).

In early 2018, the Arkansas Insurance Department announced that as of July 2018, Medigap insurers in the state would have to offer at least one Medigap plan to Medicare beneficiaries under the age of 65. Insurers can pick which plan they want to offer to disabled enrollees, and nearly all of them have chosen Plan A (the least comprehensive Medigap plan), although a few insurers offer other options. There is no requirement that Arkansas Medigap insurers extend the “no age rating” rule to people under the age of 65, and most of the insurers charge significantly higher premiums for disabled enrollees.

Disabled Medicare beneficiaries have another Medigap open enrollment period when they turn 65. At that point, they can switch to a plan with the lower premiums that apply to people who are aging into Medicare, rather than qualifying due to disability.

Disabled Medicare beneficiaries can choose instead to enroll in a Medicare Advantage plan, as long as they don’t have kidney failure (note that as of 2021, kidney failure will no longer be an obstacle to enrolling in Medicare Advantage plans). Medicare Advantage plans are otherwise available to anyone who is eligible for Medicare, and the premiums are not higher for those under 65. But as noted above, Medicare Advantage plans have more limited provider networks than Original Medicare, and total out-of-pocket costs can be as high as $6,700 per year for in-network care, plus the out-of-pocket cost of prescription drugs.

Although the Affordable Care Act eliminated pre-existing condition exclusions in most of the private health insurance market, those rules don’t apply to Medigap plans. Medigap insurers can impose a pre-existing condition waiting period of up to six months if you didn’t have at least six months of continuous coverage prior to your enrollment. And if you apply for a Medigap plan after your initial enrollment window closes (assuming you aren’t eligible for one of the limited guaranteed-issue rights), the Medigap insurer can consider your medical history in determining whether to accept your application, and at what premium.

Medicare Part D in Arkansas

Original Medicare does not provide coverage for outpatient prescription drugs. More than half of Original Medicare beneficiaries have supplemental coverage via an employer-sponsored plan (from a current or former employer or spouse’s employer) or Medicaid, and these plans often include prescription coverage.

But Medicare beneficiaries who do not have drug coverage through Medicaid or an employer-sponsored plan need to obtain Medicare Part D in order to have coverage for prescriptions. Part D can be purchased as a stand-alone plan, or as part of a Medicare Advantage plan with integrated Part D prescription drug coverage.

There are 27 stand-alone Medicare Part D plans for sale in Arkansas in 2019, with premiums that range from about $13 to $138/month.

291,483 Medicare beneficiaries in Arkansas — about 45 percent of the state’s total Medicare population — had prescription coverage under stand-alone Medicare Part D plans as of mid-2020. Another 177,475 had Part D prescription coverage integrated with their Medicare Advantage plans.

Medicare Part D enrollment is available when a beneficiary is first eligible for Medicare. And the same fall enrollment window that applies to Medicare Advantage plans also applies to Medicare Part D plans. So Medicare beneficiaries can switch to a different Part D plan during the window from October 15 to December 7 each year, with coverage effective January 1. People who didn’t enroll when they were first eligible can add a Part D plan during this window, although a late enrollment penalty can apply if the person didn’t have creditable drug coverage during the time they delayed their enrollment in Part D coverage.

Medicare spending in Arkansas

Original Medicare’s average per-beneficiary spending in Arkansas was slightly lower than the national average in 2018, at $10,044. That figure is based on data that were standardized to eliminate regional differences in payment rates, and did not include costs for Medicare Advantage. Nationwide, average per-beneficiary Original Medicare spending stood at $10,096.

Medicare spending in Louisiana was the highest in the nation, at $11,932, which was 18 percent higher than the national average. At the other end of the spectrum, per-beneficiary Medicare spending was lowest in Hawaii, at just $6,971.

Medicare in Arkansas: Resources

If you have questions about Medicare eligibility in Arkansas, Medicare enrollment in Arkansas, or need general information about health coverage for seniors, you can contact the Arkansas Senior Health Insurance Information Program.

The Arkansas Insurance Department’s Senior Health Page includes a variety of resources that are useful for people with Medicare in Arkansas.

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 Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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