At a glance: Medicare health insurance in Michigan
- More than 2 million Michigan residents are enrolled in Medicare.
- About 40 percent of Michigan Medicare beneficiaries are enrolled in Medicare Advantage plans
- Michigan has a robust Medicare Advantage market, with at least 12 plans available statewide, and more than 50 in some counties.
- In Michigan, 44 insurers offer Medigap plans.
- There are 29 stand-alone Part D prescription plans available in Michigan in 2019, with premiums that range from about $15 to $89 per month.
- Per-enrollee Original Medicare spending in Michigan is a little higher than the national average.
Medicare enrollment in Michigan
Medicare was providing coverage for 2,038,041 Michigan residents as of December 2018. That’s more than 20 percent of the state’s population, versus a little more than 18 percent of the total US population enrolled in Medicare.
Most Americans become eligible for Medicare when they turn 65. But Medicare eligibility is also triggered for younger people if they’re disabled and have been receiving disability benefits for 24 months, or if they have ALS or end-stage renal disease.
Nationwide, 16 percent of Medicare beneficiaries are under the age of 65, and 18 percent of Michigan Medicare beneficiaries are eligible due to disability rather than age. On the high and low ends of the spectrum, 23 percent of Medicare beneficiaries in Alabama, Kentucky, and Mississippi are disabled and under age 65, while just 9 percent of Hawaii Medicare beneficiaries are eligible due to disability.
Medicare Advantage in Michigan
Private Medicare Advantage plans are an alternative to Original Medicare. There are pros and cons to either alternative, and no single solution that works for everyone. Medicare Advantage plans are provided by private insurers, and plan availability varies considerably across the country. Michigan’s Medicare Advantage market is robust, with at least 12 plans available statewide, and residents of some counties able to select from among more than 50 plans.
Thirty-four percent of Michigan Medicare beneficiaries had Advantage plans as of 2017, which was very similar to the nationwide average of 33 percent. 816,689 Michigan Medicare beneficiaries had private plans (instead of Original Medicare; this does not count people with private plans to supplement their Original Medicare coverage), which amounted to about 40 percent of the state’s Medicare population. This mirrors the nationwide trend of increasing Medicare Advantage enrollment over the last several years.
Medicare’s annual election period (October 15 to December 7 each year) allows Medicare beneficiaries the chance to switch between Medicare Advantage and Original Medicare (and add, drop, or switch to a different Medicare Part D prescription plan). Starting in 2019, people who are already enrolled in Medicare Advantage 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 Michigan
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 they would otherwise have to pay if they had only Original Medicare.
Michigan operates a state-based Medigap subsidy program for Medicare beneficiaries with modest income (no more than 225 percent of the poverty level) who purchase Medigap plans from one of five participating Medigap insurers in the state. This subsidy program is expected to continue until 2021, or when funding is exhausted. The program was designed to help offset some of the rate increase that applied to Blue Cross Blue Shield Medigap plans in 2017, after a rate freeze on those plans was lifted (BCBS Medigap plans in Michigan were priced below market rates until 2017).
According to an AHIP analysis, there were 420,940 Michigan Medicare beneficiaries with Medigap coverage as of 2016. That’s about 36 percent of the state’s Original Medicare beneficiaries (Medigap plans cannot be used with Medicare Advantage plans).
Medigap plans are sold by private insurers, but the plans are standardized under federal rules. There are ten different plan designs (differentiated by letters, A through N), and the benefits offered by a particular plan (Plan A, Plan F, etc.) are the same regardless of which insurer sells the plan. Pricing, however, varies from one insurer to another.
There are 44 insurers that are actively selling Medigap plans in Michigan as of 2019. Michigan does not dictate how insurers adjust premiums based on enrollees’ ages, so insurers can use attained-age rating (the most common; premiums increase as the enrollee gets older), issue-age rating (premiums are based on the age the person was when they enrolled in the plan) or community-rating (premiums do not vary based on age). Community rating is fairly uncommon in states that don’t require it, but at least two insurers in Michigan — BCBS of Michigan and UnitedHealthcare/AARP — sell community-rated Medigap plans.
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 18 percent of Medicare beneficiaries in Michigan are under age 65. Federal rules do not guarantee access to Medigap plans for people who are under 65, but the majority of the states, including Michigan, have implemented rules to ensure that disabled Medicare beneficiaries have at least some access to Medigap plans.
For at least twenty years, Michigan has had rules in place to ensure access to at least some Medigap plans for people under age 65. Current rules in Michigan (see MCL 500.3831, updated as of March 20, 2019, to MCL 500.3831.amended) require Medigap insurers that also sell major medical health insurance to make Medigap Plans A and C continuously guaranteed-issue for Medicare beneficiaries under age 65, although they can charge these enrollees higher premiums. And if the applicant did not already have major medical coverage under a plan offered by that insurer, the insurer can impose a pre-existing condition waiting period of up to six months [see MCL 500.3831(2)]. As of 2019, there are nine insurers in Michigan that offer Medigap policies (at least A and C) to people under age 65. As of 2020, the reference to plan C is being changed to Plan D or Plan G, since Plan C will no longer be available for sale (nationwide) to newly-eligible enrollees after the end of 2019.
Disabled Medicare beneficiaries have access to the regular Medigap open enrollment period when they turn 65. At that point, they can select from among any of the available Medigap plans on the market, and get the lower premiums that apply to people who are aging into Medicare, rather than qualifying due to disability.
Disabled Medicare beneficiaries can choose instead to enroll in a Medicare Advantage plan, 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 as noted above, 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.
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. 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.
Medicare Part D in Michigan
Original Medicare does not provide coverage for outpatient prescription drugs. More than half of Original Medicare beneficiaries 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 to obtain Medicare Part D in order to have coverage for prescriptions. Part D can be purchased as a stand-alone plan, or as part of a Medicare Advantage plan with integrated Part D prescription drug coverage.
There are 29 stand-alone Part D plans for sale in Michigan in 2019, with premiums that range from about $15 to $89/month.
More than 1.6 million Medicare beneficiaries in Michigan — about 79 percent of the state’s total Medicare population — had Part D prescription coverage as of late 2018. The majority had coverage under stand-alone Part D plans, but about 488,000 people had Part D coverage as part of their Medicare Advantage plans.
Medicare spending in Michigan
Original Medicare’s average per-beneficiary spending in Arkansas was a little higher than the national average in 2017, at $10,107. That figure is 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 $9,761.
Medicare spending in Louisiana was the highest in the nation, at $11,542, which was 18 percent higher than the national average. At the other end of the spectrum, per-beneficiary Medicare spending was lowest in Hawaii, at just $6,690.
You can read more about Medicare in Michigan in our state Medicare guide. You can also contact MMAP, the Michigan Medicare/Medicaid Assistance Program, with questions related to Medicare coverage in Arkansas.
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.