At a glance: Medicare health insurance in Illinois
- More than 2.2 million Illinois residents are enrolled in Medicare.
- About a quarter of Illinois Medicare beneficiaries are enrolled in Medicare Advantage plans.
- Since the 1980s, Illinois has required Medigap insurers to sell plans to disabled Medicare beneficiaries under age 65.
- Illinois residents can select from among 27 stand-alone Part D prescription plans in 2019, with premiums ranging from about $15 to $131 per month.
- Original Medicare spending in Illinois is about 4 percent higher than the national average.
Medicare enrollment in Illinois
There were 2,209,787 Medicare beneficiaries in Illinois as of December 2018. That’s a little more than 17 percent of the state’s population, versus a little more than 18 percent of the United States population enrolled in Medicare.
Most Medicare beneficiaries are eligible for coverage because they’re at least 65 years old. But Medicare eligibility is also triggered when a person has been receiving disability benefits for 24 months. Nationwide, 16 percent of all Medicare beneficiaries are eligible due to disability. It’s a little lower in Illinois, where 14 percent of Medicare beneficiaries are enrolled due to a disability. But that still amounts to more than 300,000 people under 65 with Medicare coverage in Illinois.
Medicare Advantage in Illinois
Although Medicare is funded and run by the federal government, enrollees can choose whether they want to receive their benefits directly from the federal government via Original Medicare or enroll in a Medicare Advantage plan offered by a private insurer, if such plans are available in their area. There are pros and cons to Medicare Advantage and Original Medicare, and no single solution that works for everyone.
There are Medicare Advantage plans for sale throughout Illinois, with plan availability ranging from 3 plans to 44 plans, depending on the county.
21 percent of Medicare beneficiaries in Illinois were enrolled in Medicare Advantage plans as of 2017, compared with an average of 33 percent nationwide. As of November 2018, there were 563,639 Illinois Medicare beneficiaries with private coverage (as opposed to Original Medicare; that figure does not include people who had private plans to supplement Original Medicare). That amounted to more than 25 percent of the state’s Medicare population, mirroring the nationwide trend towards higher Medicare Advantage enrollment.
Medicare’s annual election period (October 15 to December 7 each year) allows Medicare beneficiaries the opportunity to switch between Medicare Advantage and Original Medicare and/or add or drop a Medicare Part D prescription plan. As of 2019, Medicare Advantage enrollees 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 Illinois
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 nationwide receive their supplemental coverage through an employer-sponsored plan or Medicaid. But for those who don’t, Medigap plans (also known as Medicare supplement plans) are designed to pay some or all of the out-of-pocket costs (deductibles and coinsurance) that Medicare beneficiaries would otherwise have to pay themselves.
Medigap plans are sold by private insurers, but the plans are standardized under federal rules, with ten different plan designs (differentiated by letters, A through N). The benefits offered by a particular plan (Plan C, Plan F, etc.) are the same regardless of which insurer is selling the plan. So plan comparisons are much easier for Medigap policies than for other types of health insurance; consumers can base their decision on premiums and less tangible things like customer service, since the benefits themselves are uniform.
According to an AHIP analysis, there were 748,367 Illinois Medigap enrollees in 2016, so nearly half of the state’s Original Medicare population had Medigap coverage. This is higher than the rate in most states; nationwide, about a quarter of Original Medicare beneficiaries have Medigap coverage.
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, and 14 percent of Medicare beneficiaries in Illinois are under 65 years old. Federal rules do not guarantee access to Medigap plans for people who are under 65, but the majority of the states, including Illinois, have enacted laws to ensure at least some access to private Medigap plans for disabled enrollees under the age of 65.
Illinois was one of the first to do so (see Illinois Insurance Code, Section 363). Since 1989, Illinois has required all Medigap insurers to sell policies to disabled Medicare beneficiaries. Medigap insurers must sell any of their available plans to beneficiaries under age 65, with a six-month guaranteed-issue window that starts when the person is enrolled in Medicare Part B (or when they are determined eligible for retroactive Medicare Part B coverage).
And while Medigap insurers in Illinois can charge an under-65 beneficiary higher premiums than they would charge a 65-year-old, beneficiaries under age 65 cannot be charged more than the insurer’s highest on-file rate for people over age 65. So a Medigap insurer could, for example, charge a 45-year-old the same premium they would charge an 85-year-old, but they cannot have an entirely separate set of under-65 rates that are higher than any of the age-based premiums for people over 65.
As of 1999, a decade after Illinois began requiring Medigap insurers to offer plans to disabled beneficiaries under age 65, there were only 14 states with laws requiring Medigap insurers to offer even a single plan to people under age 65. Today, there are at least 32, although there are still several states that have made no provisions to ensure access to Medigap plans for disabled Medicare beneficiaries.
Although the Affordable Care Act eliminated pre-existing condition exclusions in most of the private health insurance market, those regulations 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 insurer can look back at your medical history in determining whether to accept your application, and at what premium.
Medicare Part D in Illinois
Original Medicare does not cover outpatient prescription drugs. More than half of Original Medicare beneficiaries have supplemental coverage via an employer-sponsored plan or Medicaid, and these plans often include prescription coverage. But Medicare enrollees without creditable drug coverage need to obtain Medicare Part D prescription coverage. Part D coverage can be purchased as a stand-alone plan, or as part of a Medicare Advantage plan that includes Part D prescription drug coverage.
Insurers in Illinois are offering 27 stand-alone Part D plans for sale in 2019, with premiums that range from about $15 to $131/month.
As of late 2018, more than 1.6 million Medicare beneficiaries in Illinois had Part D prescription coverage. About 70 percent of them had stand-alone Part D plans, while the other 30 percent had Medicare Advantage plans that included Part D coverage.
Medicare spending in Illinois
In 2017, Original Medicare’s average per-beneficiary spending in Illinois was $10,122, based on data standardized to eliminate regional differences in payment rates (the data did not include costs for Medicare Advantage). Nationwide, average per beneficiary Original Medicare spending was $9,761 per enrollee, so Medicare spending in Illinois was about 4 percent higher than the national average.
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.