At a glance: Medicare health insurance in North Carolina
- Nearly 2 million North Carolina residents are enrolled in Medicare; 18 percent are under age 65 and eligible due to a disability.
- Nearly 35 percent of North Carolina Medicare beneficiaries are enrolled in Medicare Advantage plans.
- All counties in North Carolina have Medicare Advantage plans available, with plan availability ranging from four plans to 29 plans, depending on the county.
- In North Carolina, 63 insurers offer Medigap plans and nearly 470,000 Medicare beneficiaries in the state have Medigap coverage.
- North Carolina requires Medigap insurers to sell Plan A (and Plans C and F, if the insurer offers them) to Medicare beneficiaries who are under age 65.
- There are 28 stand-alone Part D prescription plans available in North Carolina in 2019, with premiums ranging from about $15 to $97 per month.
- Per-enrollee Original Medicare spending in North Carolina is about 8 percent lower than the national average.
Medicare enrollment in North Carolina
As of December 2018, there were 1,943,860 North Carolina residents with Medicare coverage. That’s about 18.5 percent of the state’s population, which is similar to the share of the total US population enrolled in Medicare.
Most Americans become eligible for Medicare when they turn 65. But nationwide, there are nearly 10 million people under the age of 65 who are covered by Medicare, accounting for about 16 percent of all Medicare beneficiaries. This is because Medicare eligibility is also triggered once a person has been receiving disability benefits for 24 months, or has kidney failure or ALS. In North Carolina, 18 percent of Medicare beneficiaries — more than 340,000 people — were under age 65 as of 2016.
In Alabama, Kentucky, and Mississippi, 23 percent of Medicare beneficiaries are disabled and under age 65. At the other end of the spectrum, just 9 percent of Hawaii’s Medicare beneficiaries are eligible due to disability.
Medicare Advantage in North Carolina
Medicare beneficiaries can choose to get their coverage through private Medicare Advantage plans, or directly from the federal government via Original Medicare. There are pros and cons to either option, and the right solution depends on each enrollee’s circumstances and preferences.
Since Medicare Advantage plans are offered by private insurers, plan availability varies from one area to another. There are Medicare Advantage plans for sale in all 100 counties in North Carolina in 2019, but plan availability ranges from just four plan options in Craven and Onslow counties, to 29 plan options in Rowan County.
As of 2017, about a third of all Medicare beneficiaries nationwide were enrolled in Medicare Advantage plans, and North Carolina’s enrollment was very much in line with the national average, with 32 percent of the state’s Medicare beneficiaries covered by Advantage plans. As of December 2018, total private Medicare enrollment in North Carolina (not counting people with private supplemental coverage like Part D and Medigap) had grown to nearly 35 percent of the state’s Medicare population, with 678,331 people enrolled in private plans. At that point, the other 1,265,529 Medicare beneficiaries had Original Medicare coverage.
The popularity of Medicare Advantage varies from one state to another. In Minnesota, 56 percent of the state’s 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).
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 North Carolina
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 Original Medicare on its own.
As of 2016, according to an AHIP analysis, there were 468,487 North Carolina Medicare beneficiaries with Medigap coverage. That’s about 40 percent of the state’s Original Medicare beneficiaries (Medigap coverage cannot be used with Medicare Advantage plans).
Medigap plans are sold by private insurers, but they’re standardized under federal rules and regulated by state laws and insurance commissioners. There are 63 insurers that offer Medigap plans in North Carolina as of 2019. The state’s plan comparison tool displays the plans based on how much they cost, to make it easy to compare the various options. Since the plan benefits are standardized (ie, Plan F has the same benefits regardless of which insurer sells it), consumers can make their plan selection based on premiums and less tangible factors like customer service. North Carolina’s Medigap shopping guide is a useful resource for consumers.
North Carolina allows Medigap insurers to pick their own rating approach, so nearly all of the plans for sale in the state use attained-age rating, which means that an enrollee’s premiums will increase as they get older, regardless of how old they were when they first enrolled. The other two approaches to Medigap premiums are issue-age rating, in which premiums are based on the age the person was when they enrolled, and community rating (sometimes called “no age” rating), which means premiums don’t vary base on age; some states require one of these approaches, but North Carolina does not. Only three Medigap insurers in North Carolina are using issue-age rating, and just one — UnitedHealthcare-AARP — is using community rating.
Federal rules require Medigap insurers to offer plans on a guaranteed-issue basis during an enrollee’s open enrollment period, which begins when the person is at least 65 years old and enrolled in Medicare Part B (and Part A; you have to be enrolled in both to obtain Medigap). But federal rules do not guarantee access to Medigap plans for people under age 65. But North Carolina is among the majority of the states that have enacted rules to ensure access to Medigap plans for disabled enrollees under age 65.
North Carolina law (see North Carolina statute § 58-54-45) requires all Medigap insurers in the state to offer at least Plan A to people under age 65 who are enrolled in Medicare due to a disability. And if the insurer also offers either Plan C or Plan F, they must also make that plan available to beneficiaries under age 65. North Carolina Medicare beneficiaries under age 65 are granted a one-time six-month open enrollment period that begins when they’re enrolled in Medicare Part B (or when they find out they’ve been retroactively enrolled in Part B). So they essentially have the same enrollment period as people who are turning 65, but it applies regardless of age, and it only guarantees access to Plan A and, in some cases, Plan C and Plan F.
But while state law in North Carolina guarantees access to Medigap plans for disabled beneficiaries under age 65, the insurers charge significantly higher premiums for these enrollees. Medigap Plan A rates in 2019 for a person age 55 range from $223 per month to $859 per month. In comparison, the same Plan A for a person age 65 ranges in price from $91 per month to $245 per month. And for Plan F, premiums for a 55-year-old range from $401 per month to $903 per month, whereas a 65-year-old would pay between $130 and $296 per month for the same plans.
Disabled Medicare beneficiaries have access to the Medigap open enrollment period when they turn 65. At that point, they have access to any of the available Medigap plans, at the standard age-65 rates.
Disabled Medicare beneficiaries have the option to enroll in a Medicare Advantage plan instead of Original Medicare, 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 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.
Medicare Part D in North Carolina
Original Medicare does not provide coverage for outpatient prescription drugs. More than half of Original Medicare beneficiaries nationwide have supplemental coverage either through 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 Part D, created under the Medicare Modernization Act of 2003, provides drug coverage for Medicare beneficiaries who do not have another source of coverage for prescription costs. Medicare beneficiaries can buy Part D plans on a stand-alone basis, or obtain Part D coverage integrated with a Medicare Advantage plan (not all Advantage plans include Part D benefits, but most do). Both options are available for purchase (or plan changes) during the annual election period that runs from October 15 to December 7 each year, with the new coverage effective January 1 of the coming year.
There are 28 stand-alone Part D plans for sale in North Carolina in 2019, with premiums that range from about $15 to $97/month.
823,608 North Carolina Medicare beneficiaries had stand-alone Part D plans as of December 2018, and another 631,353 had Medicare Advantage plans that included integrated Part D coverage. All together, that’s nearly three-quarters of the state’s Medicare beneficiaries with Part D coverage.
Medicare spending in North Carolina
Original Medicare’s average per-beneficiary spending in North Carolina was about 5 percent lower than the national average in 2016, at $8,304 (nationwide, the average was $9,533). 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.
You can read more about Medicare in North Carolina in our state Medicare guide. You can also contact SHIIP, North Carolina’s Seniors’ Health Insurance Information Program, with questions related to Medicare coverage in North Carolina.
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.