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Medicare in California

"Birthday rule" gives CA Medigap enrollees an opportunity to switch plans

Key takeaways

Medicare enrollment in California

Nationwide, more than 65 million people are covered by Medicare — and more than 10% of them are in California. As of late 2022, more than 6.6 million California residents had Medicare coverage. But that’s only about 17% of the state’s 39 million people, versus more than 19% of the United States population that is enrolled in Medicare.

For most Americans, Medicare coverage enrollment goes along with turning 65. But Medicare eligibility is also triggered when a person has been receiving disability benefits for 24 months (people with ALS or end-stage renal disease do not have to wait 24 months for their Medicare enrollment). Nationwide, 12% of all Medicare beneficiaries are eligible due to disability. It’s lower in California, though, with under 9% of Medicare beneficiaries enrolled due to a disability.

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. 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.

Read our guide to Medicare’s open enrollment.

Learn about how California Medicaid (Medi-Cal) can provide assistance to Medicare beneficiaries with limited financial means.

Medicare Advantage in California

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.

Although most counties in the United States do have Medicare Advantage plans available for purchase, Trinity County in northern California does not have any Medicare Advantage plans available for 2023 (the year before, there were 14 counties in northern and central California where Original Medicare was the only option). Of the 58 counties in California, Medicare Advantage plans are available in 57 of them as of 2023. Across those 57 counties, plan availability varies from just one or two plans in several rural counties, to 108 plans in some parts of Los Angeles County.

Forty percent of Medicare beneficiaries in California were enrolled in Medicare Advantage plans as of 2018, compared with an average of 34% nationwide. More than 3.2 million people with Medicare in California, nearly 49% of California’s Medicare beneficiaries, had private Medicare Advantage plans as of late 2022 (as opposed to Original Medicare; that figure does not include people who had private Part D or Medigap coverage to supplement Original Medicare). Nationwide, Medicare Advantage enrollment had grown to about 46% of all beneficiaries nationwide by that point. So Medicare Advantage enrollment is growing in California, although the pace of recent growth has been a bit slower in California than nationwide.

Between late 2019 and early 2022, Kaiser Foundation Health Plan saw a 7.6% increase in Medicare Advantage enrollment in California. With 688,984 Californians enrolled in its MA plans in February 2022, the carrier had the highest market share – 26% – out of a field of 30 carriers selling MA plans.

Medicare Advantage market share California

Kaiser Foundation Health Plan held the highest market share of Medicare Advantage carriers in California in 2022. (Source: CMS 2022 data)

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Medigap in California: “Birthday rule” plan change window, plus fairly strong protections for beneficiaries under age 65

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 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.

There are 28 insurers in California that offer Medigap plans. And as of 2020, there were 587,879 California residents with Medigap coverage (down from 599,507 in 2019; As Medicare Advantage enrollment grows, the need for Medigap declines, since Medigap can’t be used with Medicare Advantage plans).

Although California has by far the nation’s largest Medicare population, there were five states (Florida, Illinois, Ohio, Pennsylvania, and Texas) where more people were enrolled in Medigap plans as of 2020.

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 K, 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 how premiums change over time) and less tangible factors like customer service, since the benefits themselves are uniform. All Medigap insurers must offer at least Plan A. And if they offer any other plans, they must offer at least Plan C or Plan F to enrollees who were already eligible for Medicare prior to 2020, and at least Plan D or Plan G to enrollees who become eligible for Medicare in 2020 or beyond.

California does not dictate how Medigap insurers can adjust premiums based on age, so most Medigap insurers in the state use attained-age rating, which means that premiums increase as a person gets older. There are a few insurers in California that use issue-age rating instead, with premiums based on the age the person was when they enrolled. Community rating (also known as “no age” rating) means that rates do not vary with age at all, but there are no Medigap insurers in California that use community rating (several states require community rating or issue-age rating, but California is not among them).

Unlike other private Medicare coverage (Medicare Advantage plans and Medicare Part D plans), federal rules do not provide an 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).

However, California law has long given Medigap enrollees an annual window, following their birthday, when they can switch to any other Medigap plan with equal or lesser benefits, without medical underwriting. This window used to be 30 days long, but legislation enacted in 2019 extended it to 60 days, as of 2020. California is one of several states that have this type of “birthday rule” that allows Medigap enrollees an opportunity to make limited plan changes without underwriting.

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 nearly 600,000 Medicare beneficiaries in California are under 65. Federal rules do not guarantee access to Medigap plans for people who are under 65, but the majority of the states, including California, have stepped in to ensure at least some access to private Medigap plans for disabled enrollees under the age of 65 (federal legislation, including 2018’s H.R.6431, has been considered to expand access to Medigap plans to all Medicare beneficiaries, regardless of age, but the rules have thus far not changed).

For Medicare beneficiaries in California who are under age 65, Article 6 (Section 10192.11) of California’s insurance statute requires Medigap insurers in the state to offer at least plans A, B, D, and G (if offered by the company to any applicants; note that this used to be plans A, B, C, and F, but S.B.784 was enacted in 2019 to swap Plans C and F for Plans D and G, since Plans C and F are no longer available — nationwide — to newly-eligible Medicare beneficiaries as of 2020; the requirement to make plans C and F — if offered by the insurer — available is still applicable for disabled Medicare beneficiaries who became eligible for Medicare prior to 2020). The insurers must also offer either plan K or Plan L, if offered by the company, or Plan M or Plan N, if offered by the company. But none of these provisions apply to Medicare beneficiaries under age 65 who are eligible for Medicare due to having end-stage renal disease (kidney failure).

This is important, because prior to 2021, federal rules also allowed Medicare Advantage plans to reject new applicants with end-stage renal disease, unless the plan was a special needs plan specifically designed for ESRD patients (such plans were not available in most of the state, meaning that ESRD patients had no option to cap their out-of-pocket costs unless they had access to a supplemental employer-sponsored or retiree plan). But this changed as of 2021, under the 21st Century Cures Act. Starting with 2021 coverage, Medicare Advantage plans are guaranteed-issue for all Medicare beneficiaries, including those with ESRD.

California’s statute allows Medigap insurers to charge higher premiums for people under age 65. But coverage must be guaranteed-issue during the six months after a person enrolls in Medicare Part B (regardless of age) or the six months after a person is determined to be retroactively eligible for Medicare Part B. And insurers cannot pay differing broker commissions based on the age of the Medigap enrollee (ie, insurers are not allowed to use lower commissions to dissuade brokers from selling Medigap plans to people under age 65).

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 California

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 integrated Part D prescription drug coverage.

Insurers in California are offering 26 stand-alone Part D plans for sale in 2023, with premiums that range from about $5 to $173/month.

As of late 2022, there were more than 5.4 million Medicare beneficiaries in California with Part D prescription coverage. Nearly 2.3 million had stand-alone Medicare Part D plans, while more than 3.1 million had Medicare Advantage plans with built-in Part D coverage.

Medicare Part D enrollment is available when a beneficiary is first eligible for Medicare, and also during the annual open enrollment period each fall, from October 15 to December 7.

How does Medicaid provide financial assistance to Medicare beneficiaries in California?

Many Medicare beneficiaries receive financial assistance through Medicaid with the cost of Medicare premiums, prescription drug expenses, and services not covered by Medicare – such as long-term care.

Our guide to financial assistance for Medicare enrollees in California includes overviews of these benefits, including Medicare Savings Programs, long-term care coverage, and eligibility guidelines for assistance.

Medicare in California: Resources for Medicare beneficiaries and their caregivers

Need help with Medicare enrollment in California, or have questions about Medicare eligibility in California?

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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