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Medicare in New York

New York's Medigap regulations are among the strongest in the country, with community rating and year-round guaranteed-issue plans

Key takeaways

Medicare options

Medicare, a healthcare insurance program for older and disabled Americans, operates under the guidance of the Centers for Medicare and Medicaid (CMS). CMS is part of the federal Department of Health and Human Services (HHS).

Medicare beneficiaries can choose to receive their benefits directly from the federal government via Original Medicare — along with supplemental coverage for prescriptions and out-of-pocket costs — or enroll in private Medicare Advantage plans (as long as Advantage plans are available in their area, which is the case in most of the country, including all of New York).

Original Medicare includes Medicare Parts A and B. Medicare Part A (also called hospital insurance) helps pay for inpatient stays, like at a hospital, skilled nursing facility, or hospice center. Medicare Part B (also called medical insurance) helps pay for outpatient care like a doctor appointment or a preventive healthcare service, such as most vaccination).

Medicare Advantage includes all of the basic coverage of Medicare Parts A and B, and these plans generally include additional benefits — such as integrated Part D prescription drug coverage and extras like dental and vision — for a single monthly premium. But members of Medicare Advantage plans may be required to use a limited provider network for the Medicare plan they select, and total out-of-pocket costs (like deductibles, co-payments, or co-insurance) may be higher than they would be under Original Medicare plus a Medigap plan. There are pros and cons to either option, and no single solution that works for everyone.

Medicare enrollment in New York

As of July 2020, nearly 3.7 million people were covered by Medicare in New York, amounting to about 19 percent of the state’s population.

In most cases, Medicare enrollment goes along with turning 65 years old. But people who have been receiving disability benefits for at least 24 months are also eligible for Medicare (note that people with ALS or end-stage renal disease do not have to wait 24 months for their Medicare eligibility to take effect). In New York, 15 percent of Medicare beneficiaries are under 65 and eligible due to disability, which is the same as the nationwide average (it varies considerably from state to state: Only 9 percent of Hawaii’s Medicare beneficiaries are younger than 65, whereas 22 percent of Medicare beneficiaries in Alabama, Arkansas, Kentucky, and Mississippi are under 65).

Medicare Advantage in New York

As of 2018, 39 percent of the people with Medicare in New York had Medicare Advantage plans, compared with an average of 34 percent nationwide. The other 61 percent of residents covered by Medicare in New York were enrolled in Original Medicare. But Medicare Advantage enrollment has been growing in New York, as has been the case nationwide. As of mid-2020, private Medicare Advantage enrollment accounted for nearly 44 percent of New York’s Medicare population.

New York has a robust Medicare Advantage market, with 2020 plan availability ranging from 18 plans offered in Livingston County to 97 plans offered in Queens County.

During Medicare’s annual election period (October 15 to December 7 each year) beneficiaries have the opportunity to switch between Medicare Advantage and Original Medicare and/or add or drop a Medicare Part D prescription plan. And Medicare Advantage enrollees also have the option to switch to a different Medicare Advantage plan or change to Original Medicare during the Medicare Advantage open enrollment period, which runs from January 1 to March 31.

Medigap in New York

While Original Medicare does provide fairly comprehensive coverage, it does not cover everything (for example, prescription drugs are not covered) and it doesn’t have a cap on out-of-pocket costs. Under Medicare Part B, that amounts to an unlimited 20 percent coinsurance. To address the gaps in Original Medicare, most enrollees have some sort of supplemental coverage. More than half of Original Medicare beneficiaries get their supplement coverage through an employer-sponsored plan or Medicaid.

For those without access to either of those options, 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 (in order to have prescription coverage, it’s also necessary to buy a Medicare Part D plan, as Medigap plans sold since 2006 do not include prescription coverage).

Although Medigap plans are sold by private insurers, the plans are standardized under federal rules. There are ten different plan designs (differentiated by letters, A through N; not all insurers offer all plans for sale), and the benefits offered by a particular plan (Plan A, Plan G, etc.) are the same regardless of which insurer is selling the plan. So consumers can base their plan selection on premiums and less tangible things like customer service, since the benefits themselves are uniform.

There are 12 insurers licensed to offer Medigap plans in New York. 481,178 people had Medigap plans in New York as of 2018, according to an AHIP analysis.

New York has among the strongest Medigap consumer protections in the nation. As long as a person in New York is enrolled in Medicare Parts A and B, they can enroll in a Medigap plan at any time, year-round, and premiums do not vary based on the applicant’s age or health status. This is also true for enrollees who are under 65 and eligible for Medicare due to a disability. Premiums do vary from one insurer to another, and from one area to another (2020 premiums are available here; an insurer can only vary the price of a particular Medigap plan based on where enrollees reside).

New York’s rules go far beyond the federal rules, and beyond the rules that most states have imposed on Medigap insurers. (Connecticut is the only other state where Medigap is available year-round, without medical underwriting; a handful of other states offer windows each year when some or all plans are guaranteed-issue). Federal rules do not require an annual open enrollment window for Medigap plans. Instead, federal rules provide only a one-time six-month window when Medigap coverage is guaranteed-issue, starting when the person is at least 65 and enrolled in Medicare Part B. And federal rules don’t guarantee access to Medigap plans at all for people who are under 65 and enrolled in Medicare due to a disability. New York’s rules are much more robust.

Because of the year-round availability, community rating, and lack of medical underwriting, premiums for Medigap enrollees in New York are generally higher than they are in most other states when enrollees are 65. But this Medigap premium chart from Alaska is a good example of how high Medigap premiums can be for older enrollees in states that allow Medigap insurers to increase premiums over time, as an enrollee ages (referred to as attained-age rating, as opposed to New York’s community rating). Although the rates are higher for newly eligible enrollees, older enrollees pay the same amount as younger enrollees.

New York also has fewer Medigap insurers than most high-population states with fewer Medigap regulations. For example, Arizona, which defaults to the federal rules for Medigap plans, has 69 insurers offering policies in 2020.

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, and New York allows Medigap insurers to conform to federal Medigap regulations for pre-existing conditions. Medigap insurers can impose a pre-existing condition waiting period of up to six months, if an applicant didn’t have at least six months of continuous coverage prior to enrolling. But beyond that, consumers are protected in New York. In most other states, people enrolling after their initial six-month open enrollment window can be denied coverage or charged higher premiums due to pre-existing conditions, and that’s not the case in New York.

New York Medicare Part D

Original Medicare doesn’t provide coverage for outpatient prescription drugs. More than half of Original Medicare enrollees have supplemental coverage obtained through an employer-sponsored plan (from a current or former employer or spouse’s employer) or Medicaid, and these plans often include prescription coverage. Medicare enrollees without access to those options can enroll in Medicare Part D prescription coverage. Part D coverage is available through stand-alone policies called prescription drug plans (PDPs) or as part of a Medicare Advantage policy with integrated Part D prescription drug coverage.

In 2020, insurers in New York are offering 27 stand-alone Medicare Part D plans for sale, with premiums ranging from about $13 to $91 per month.

As of mid-2020, 1,434,962 New Yorkers had stand-alone Medicare Part D plans, while another 1,478,877 had Medicare Part D coverage integrated with their Medicare Advantage plans.

Medicare Part D enrollment is available during Medicare’s annual open enrollment period each fall (October 15 to December 7), as well as during a person’s initial enrollment period when they’re first eligible for Medicare.

Medicare spending in New York

Based on Original Medicare spending data that were standardized to eliminate regional differences in payment rates, average per-beneficiary costs for Medicare in New York stood at $10,464 in 2018 (the analysis did not include costs for Medicare Advantage).

Nationwide, average per beneficiary Original Medicare spending was $10,096 per enrollee, so Medicare spending in New York was about 4 percent higher than the national average. Per-beneficiary Original 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 New York

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

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

Helpful resources for New York Medicare beneficiaries and their caregivers

Need help with your Medicare application in New York, or have questions about Medicare eligibility in New York? These resources provide free assistance and information.

  • Contact HIICAP, New York’s Health Insurance Information Counseling and Assistance program.
  • Visit the Medicare Rights Center. This website provides helpful information geared to Medicare beneficiaries, caregivers, and professionals.
  • Access the New York State Department of Financial Services for helpful information about Medicare.

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.

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