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Medicare in Iowa

Most Iowa Medicare beneficiaries choose Original Medicare instead of Advantage plans. State does not require insurers to offer Medigap plans to people under 65

Key takeaways

Medicare enrollment in Iowa

As of September 2020, there were 638,530 residents with Medicare coverage in Iowa. That’s about 20 percent of the state’s population filing for Medicare benefits, versus about 19 percent of the total U.S. population.

In most cases, Medicare eligibility is triggered when a person turns 65. But Medicare also provides coverage for people under age 65 once they have been receiving disability benefits for 24 months. Nationwide, 15 percent of Medicare beneficiaries are disabled and under age 65; in Iowa, 13 percent of the Medicare population is under 65 and are eligible for Medicare coverage enrollment due to a disability.

On the high and low ends of the spectrum, 22 percent of Medicare beneficiaries in Alabama, Arkansas, Kentucky, and Mississippi are under 65, while just 9 percent of Hawaii’s Medicare beneficiaries are eligible due to disability.

Medicare Advantage in Iowa

Beneficiaries of Medicare in Iowa can choose to get their coverage through private Medicare Advantage plans, or directly from the federal government via Original Medicare.
Medicare Advantage plans are offered by private insurers, so plan availability varies from one area to another. Although most areas of the country do have Medicare Advantage plans available in 2021, Taylor County in Iowa does not (residents of Taylor County must use Original Medicare instead). The other 98 counties in the state have between three and 29 Medicare Advantage plan options available for purchase. The Iowa Medicare Advantage buyer’s guide shows premiums and coverage areas for each of the insurers that offer Advantage plans in the state.

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Nationwide, more than a third of all Medicare beneficiaries had Medicare Advantage plans as of 2018. But in Iowa, it was only 19 percent. As of September 2020, there were 161,300 Iowa residents with private Medicare coverage. That’s 25 percent of the state’s Medicare population, but some Iowa Medicare beneficiaries are enrolled in Medicare Cost plans, which are another form of private Medicare coverage. The other 477,230 Iowa Medicare beneficiaries had coverage under Original Medicare.

The popularity of Medicare Advantage enrollment varies from one state to another. In Minnesota and Hawaii, nearly half of the Medicare population is enrolled in Advantage plans, whereas only 1 percent of Alaska Medicare beneficiaries have Advantage plans (and those are via employer-sponsored coverage, as there are no Medicare Advantage plans available for individuals to purchase in Alaska).

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, or privately purchased plans) for things like prescription drugs and out-of-pocket costs (out-of-pocket costs are not capped under Original Medicare).

Original Medicare includes Part A (hospital coverage) and Part B (outpatient and physician services). Medicare Advantage plans include all of the coverage provided by Medicare Parts A and B — although out-of-pocket costs can vary significantly — and often include additional benefits, such as integrated Part D prescription drug coverage and coverage for things like dental and vision care, plus extras like gym memberships and nurse hotlines. But Medicare Advantage insurers establish their own provider networks, which are generally localized and more limited than the nationwide network for Original Medicare. Out-of-pocket costs for Medicare Advantage are often higher than they would be if a beneficiary had Original Medicare plus a Medigap plan. There are pros and cons to either option, and the right solution is different for each person.

Medicare’s annual election period (October 15 to December 7 each year) allows Medicare beneficiaries the chance to switch between Medicare Advantage enrollment and Original Medicare (and add, drop, or switch to a different Medicare Part D prescription plan). People who are already enrolled in Medicare Advantage also have the option to change 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 Iowa

Original Medicare does not limit out-of-pocket costs, so most enrollees maintain some form of supplemental coverage. Nationwide, 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, or MedSupp) will pay some or all of the out-of-pocket costs (deductibles and coinsurance) they would otherwise have to pay if they had only Original Medicare.

305,743 Iowa Medicare beneficiaries were enrolled in Medigap plans as of 2018, according to an AHIP analysis. That’s about half of the state’s Original Medicare enrollees (Medigap coverage cannot be used with Medicare Advantage plans).

Although Medigap plans are sold by private insurers, 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 A, Plan F, etc.) are the same regardless of which insurer sells the plan.

There are 60 insurers that offer Medigap plans in Iowa as of 2020; Avera and Sanford (both of which have local networks in Iowa) also offer Medicare Select plans as a Medigap option (the Iowa Medigap shopping guide shows premiums for 2020 at various ages, and this chart shows how premiums changed for 2020, including premiums for insurers that no longer offer Medigap plans for new enrollees in the state).

Medigap plans in the state are governed by Chapter 37 of Iowa insurance statute. In 2019, regulators proposed updates to Chapter 37, including adjustments to comply with federal rules for Medigap plans starting in 2020, when newly-eligible enrollees are no longer able to buy Medigap plans that cover the Part B deductible; the revised Iowa code is Rule 191-37.9. Medigap insurers in Iowa are required to spend at least 65 percent of premiums (75 percent for group plans) on benefits for enrollees, as opposed to administrative costs.

Medigap insurers in Iowa can use issue-age rating (premiums are based on the age you were when you bought the policy) or attained-age rating (premiums go up as you get older). Almost all of the insurers in the state — all but AARP/UnitedHealthcare, Everence Association, and Transamerica — use attained-age rating.

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 attain Medicare eligibility in Iowa if they’re disabled and have been receiving disability benefits for at least two years, and 13 percent of Iowa’s Medicare beneficiaries are under age 65. But federal rules do not guarantee access to Medigap plans for people who are under 65. The majority of the states have implemented rules to ensure that disabled Medicare beneficiaries have at least some access to Medigap plans, but Iowa is not among them. Medigap insurers in Iowa have the option to offer coverage to disabled enrollees who aren’t yet 65, but most do not. As of 2020, Wellmark offers Medigap Plan A on a guaranteed issue basis to people under 65, but the premium is fairly steep at $491/month (for comparison, Wellmark’s guaranteed-issue Plan A for people age 65 is $208/month). Wellmark has other plans available for these beneficiaries, but with medical underwriting to determine eligibility. United American Insurance also offers Medigap plans to people under 65 in Iowa, but with eligibility based on medical underwriting.

Disabled Medicare beneficiaries under age 65 in Iowa also have the option to enroll in HIPIOWA, the state’s high-risk health insurance pool. HIPIOWA has a plan that provides coverage to supplement Medicare, with premiums that vary based on age. Iowa is one of several states where state-run high-risk pools are still operational, with supplemental coverage available to Medicare beneficiaries who are unable to obtain private Medigap plans. The others are AlaskaNebraskaNew MexicoNorth DakotaSouth Carolina, Washington, and Wyoming.

Disabled Medicare beneficiaries have access to the normal Medigap open enrollment period when they turn 65. At that point, they can select from among any of the available Medigap plans, with standard premiums that apply to non-disabled people who are enrolling when they turn 65.

Disabled Medicare beneficiaries have the option to enroll in a Medicare Advantage plan instead of Original Medicare, and as of 2021 this includes people with kidney failure (ESRD), who were not allowed to join most Medicare Advantage plans prior to 2021. Medicare Advantage premiums are not higher for those under 65. But as noted above, Advantage plans have more limited provider networks than Original Medicare, and total out-of-pocket costs can be as high as $7,550 per year (as of 2021) 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 (although many of them choose not to do so). 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.

Iowa Medicare Part D

Original Medicare does not provide coverage for outpatient prescription drugs. More than half of Original Medicare beneficiaries nationwide 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 Medicare Part D in order to have coverage for prescriptions. Medicare Part D was created under the Medicare Modernization Act of 2003. Part D coverage can be purchased as a stand-alone plan, or obtained as part of a Medicare Advantage with built-in  Medicare Part D enrollment  benefits.

There are 28 stand-alone Medicare Part D plans for sale in Iowa for 2021, with premiums that range from about $7 to $105/month.

More than 377,000 Iowa residents had stand-alone Medicare Part D plans as of September 2020 — about 59 percent of the state’s total Medicare population). Another 130,421 beneficiaries of Medicare in Iowa had Part D prescription coverage as part of their Medicare Advantage plans.

Medicare Part D enrollment is available during the same annual open enrollment period that applies to Medicare Advantage plans, running from October 15 to December 7 each fall. Plan changes made during this window take effect on January 1 of the coming year.

Medicare spending in Iowa

Average per-beneficiary spending for Medicare in Iowa was 13 percent lower than the national average in 2018, at $8,807; only 12 states had lower average per-beneficiary Original Medicare spending. The spending amounts are 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.

Per-beneficiary Medicare spending was highest in Louisiana, at $11,932, and lowest in Hawaii, at just $6,971.

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

Many Medicare beneficiaries receive financial assistance through Medicaid with the cost of Medicare premiums, prescription drug expenses, and services Medicare doesn’t cover – such as long-term care.

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

Medicare in Iowa: Resources for Medicare beneficiaries and their caregivers

Need help with Medicare enrollment in Iowa, or have questions about Medicare eligibility or benefits? You can contact SHIIP, Iowa’s Senior Health Insurance Information Program, with questions related to Medicare enrollment and coverage in Iowa.

The Iowa Insurance Division can answer questions and address consumer complaints about health insurance companies that offer Medicare plans, as well as the agents and brokers who sell those plans. The Division also has a Senior Medicare Patrol, devoted to Medicare education and fraud prevention.

The Medicare Rights Center is a nationwide service, with a website and call center, that provides information and assistance related to Medicare enrollment, eligibility, and benefits.

This resource about how Iowa Medicaid assists Medicare beneficiaries with limited financial means is a useful guide for beneficiaries and their caregivers.

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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