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Medicare in Colorado

Since 2003, Colorado has required Medigap insurers to offer plans to disabled beneficiaries under age 65

At a glance: Medicare health insurance in Colorado

Medicare enrollment in Colorado

2020 Medicare enrollment datesNationwide, more than 60 million people are enrolled in Medicare, and 891,873 of them are Colorado residents. That’s a little more than 15 percent of the state’s total population, compared with a little more than 18 percent of the United States population enrolled in Medicare.

87 percent of Medicare beneficiaries in Colorado are eligible due to their age (ie, being at least 65), while the other 13 percent are eligible due to a disability. Nationwide, 84 percent of Medicare beneficiaries are eligible due to age, and 16 percent are eligible due to disability..

Medicare Advantage in Colorado

Nationwide, a third of all Medicare beneficiaries had Medicare Advantage plans as of 2017. In Colorado, Medicare Advantage was a little more popular, with 37 percent of the state’s Medicare beneficiaries enrolled in Advantage plans.

Nationwide, private Medicare coverage (not counting supplemental plans like Medigap and Part D) accounted for nearly 36 percent of all Medicare beneficiaries as of late 2018. In Colorado, private plans covered nearly 38 percent of the state’s Medicare population. And although that was mostly Medicare Advantage plans, there are also some people in Colorado who have Medicare Cost plans, which are another private plan option for Medicare beneficiaries in some areas. The other 62 percent of Colorado’s Medicare beneficiaries had opted instead for coverage under Original Medicare.

Medicare Advantage plans are provided by private insurers, so plan availability varies by area. In 63 of Colorado’s 64 counties, there are Medicare Advantage plans available in 2019. But residents in Baca County in southeastern Colorado cannot enroll in Medicare Advantage, as there are no plans for sale in that county (Baca County residents who are eligible for Medicare are covered under Original Medicare instead).

In the other 63 counties in Colorado, Medicare Advantage plan availability ranges from five plans to 29 plans, depending on the county.

Medicare beneficiaries can switch from Original Medicare to Medicare Advantage, and vice versa, during the annual election period each fall (October 15 through December 7), with coverage effective January 1. And as of 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.

Medigap in Colorado

Because Original Medicare has out-of-pocket costs that can be substantial (and there is no cap on how high out-of-pocket costs can be with Original Medicare), many enrollees use Medigap plans 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. Employer-sponsored plans and Medicaid serve as supplemental coverage for more than half of all Medicare beneficiaries nationwide, but Medigap fills a coverage need for people who don’t have access to Medicaid or an employer-sponsored plan, and who prefer Original Medicare over Medicare Advantage.

As of 2018, there were 46 insurers in Colorado offering Medigap plans. And as of 2016, there were 177,866 Medicare beneficiaries in Colorado who had Medigap coverage, according to an AHIP analysis. That’s about a third of Colorado’s Original Medicare population (Medigap plans cannot be used with Medicare Advantage coverage).

Medigap plans are standardized under federal rules, so Plan A offers the same benefits regardless of which insurer offers it, as does Plan C, Plan F, etc. (premiums vary significantly from one insurer to another — initially and in terms of how they increase over time — as do things like customer service and additional benefits beyond the standardized benefits, such as a 24-hour nurse hotline). But Medigap standardization means that plan comparisons are easier than they are in other insurance markets.

Medigap plans can be priced using attained-age rating, issue-age rating, or community rating. Colorado does not require insurers to use a particular approach, so most Medigap insurers in Colorado use attained-age rating, which means that a person’s premiums increase as they get older. There are a handful of insurers in the state that use issue-age rating, which means the rates are based on the age the person was when they enrolled. And just one insurer — UnitedHealthcare/AARP — uses community rating, which means that enrollees’ rates do not vary based on age.

Under federal rules, people are granted a six-month window during which they can enroll in a Medigap plan regardless of their medical history. This window starts when they’re at least 65 and enrolled in Medicare Part B. 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.

To address this, the majority of the states have implemented rules ensuring at least some access to Medigap plans for people who are under age 65, and there has been slow but steady progress on this. In 1999, there were only 14 states that required Medigap insurers to offer at least some plans to people under age 65. Today, there are at least 32, including Colorado.

Colorado statute (see 3 CCR 702-4 Series 4-3 Section 10) was changed in 2003 to ensure access to Medigap for people under age 65. Colorado requires Medigap insurers to offer all of their plans to people under age 65, with the same six-month enrollment window that applies to people who are aging onto Medicare. So a person under age 65 who becomes eligible for Medicare in Colorado has six months, starting when they’re enrolled in Medicare Part B, to sign up for a guaranteed-issue Medigap plan. When Colorado implemented this rule in 2003, there was a one-time six-month open enrollment window (September 2003 through February 2004) during which people under age 65 who were already enrolled in Medicare could sign up for a Medigap policy.

Although Medigap plans are guaranteed-issue for people under 65 during their six-month enrollment window, insurers can charge higher premiums for people under 65. As of 2018, all of the insurers offering Medigap plans in Colorado were charging less than $200/month (some as low as $77/month) for Medigap Plan A if the enrollee was 65-years-old. But for a person under the age of 65, premiums for Plan A varied from about $150 to about $780 per month. The state does regulate the extent to which premiums can be higher for people under 65, with extensive rules governing what an insurer can charge as a “credibility-weighted average age premium rate” (see Section 10(E) of the statute).

Disabled Medicare beneficiaries have access to the normal Medigap open enrollment period when they turn 65. At that point, they have access to any of the available Medigap plans, at the standard age-65 rates.

Disabled Medicare beneficiaries have the option to enroll in a Medicare Advantage plan instead of Original Medicare, as long as they don’t have kidney failure. Medicare Advantage plans are otherwise available to anyone who is eligible for Medicare, and the premiums are not higher for those under 65. But 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.

Proposed special enrollment period for current Medigap enrollees with Plans F or C

Colorado’s Division of Insurance has proposed an important special enrollment period that would make it easier for enrollees with Medigap Plans F and C to switch to Plans G and D. Here’s the backstory on this, and why this special enrollment period, if finalized, could be beneficial for Colorado’s Medicare population:

After the end of 2019, newly-eligible Medicare beneficiaries will no longer be able to enroll in Medigap Plans F or C. These have long been among the most popular Medigap plans, but legislation (MACRA) enacted in 2015 requires them to no longer be sold to newly-eligible enrollees, because lawmakers wanted to phase out Medigap plans that cover the Part B deductible (Plans C and F are the only Medigap policies that cover the Part B deductible).

The idea is to try to curb overutilization of health care by ensuring that Medicare beneficiaries have to spend at least some of their own money in out-of-pocket charges when they seek medical treatment (the Part B deductible is only $185 in 2019, and projected to be $197 in 2020, so it’s a fairly small cost when compared with average total medical expenses).

Medicare beneficiaries who already have Plans F or C will be able to keep them, but premiums might start to increase faster than usual for these plans once they are no longer allowed to enroll newly-eligible beneficiaries. Health care costs tend to rise considerably with age, but each year’s incoming group of 65-year-olds helps to keep Medigap premiums much more stable than they would be without newly-eligible enrollees. So it’s possible that premium increases for Plans C and F could start to outpace premium increases for other Medigap plans.

Healthy enrollees have the option to apply for a different Medigap plan at any time, but Medigap enrollees with pre-existing conditions may find it difficult or impossible to switch plans. Applications submitted after an enrollee’s initial enrollment window has passed are subject to medical underwriting (unless they’re eligible for very limited special enrollment periods), and there is no annual open enrollment period for Medigap, the way there is for Medicare Part D and Medicare Advantage.

So Colorado regulators have proposed the creation of a one-time special enrollment period that would allow any Medicare beneficiary enrolled in Plan C or Plan F to switch to Plan D or Plan G, without medical underwriting. The special enrollment period, if finalized, would:

  • Apply to Medigap enrollees who already have Plan C or Plan F, and who are eligible for Medicare prior to 2020.
  • Allow Plan C enrollees to switch to any available Plan D.
  • Allow Plan F enrollees to switch to any available Plan G.
  • Allow only one plan change per enrollee, for people who choose to take advantage of the special enrollment period.

The proposed regulation called for the special enrollment period to run from January 2020 through March 2020. But the Colorado Division of Insurance confirmed that the issue, including stakeholder feedback received in the summer of 2019, is still being considered as of October 2019, with no hearings yet scheduled. Assuming the measure is adopted, the special enrollment period is now likely to happen in the first half of 2021, rather than in 2020.

Medicare Part D in Colorado

Original Medicare does not cover outpatient prescription drugs. Many Medicare beneficiaries have supplemental drug coverage from an employer or Medicaid, but for those who don’t, Medicare Part D is an important part of having full coverage. Medicare Part D was created under the Medicare Modernization Act of 2003, and can be purchased on a stand-alone basis or as part of a Medicare Advantage plan with integrated Part D coverage.

As of December 2018, there were 344,288 Colorado Medicare beneficiaries enrolled in stand-alone Part D prescription drug plans, and another 306,062 beneficiaries had Part D coverage integrated with their Medicare Advantage coverage. In total, 650,350 Colorado Medicare beneficiaries had Part D coverage, accounting for nearly 73 percent of the state’s Medicare population.

For 2019 coverage, there are 26 stand-alone Part D plans available in Colorado, with premiums ranging from $16 to $113 per month.

Medicare spending in Colorado

In 2017, Original Medicare spent an average of $8,419 per beneficiary in Colorado, based on data that were standardized to eliminate regional differences in payment rates (the data did not include costs for Medicare Advantage enrollees). The national average that year was $9,533 per enrollee, so Medicare spending in Colorado was 14 percent lower than the national average, and only 11 states had per-beneficiary spending lower than Colorado’s.

For perspective on the range of spending, average per-beneficiary costs for Original Medicare were highest in Louisiana, at $11,399, and lowest in Hawaii, at $6,441.

You can read more about Medicare in Colorado in our state Medicare guide. You can also contact the Colorado State Health Insurance Assistance Program (there are offices in each county), with questions related to Medicare coverage in Colorado.

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.