At a glance: Medicare health insurance in Oregon
- Nearly 20 percent of Oregon residents are enrolled in Medicare. Of the 835,000 Medicare beneficiaries in the state, about 14 percent are under age 65.
- Oregon has significant consumer protections related to Medigap plans, with an annual opportunity to switch plans and guaranteed-issue coverage (without higher premiums) for disabled beneficiaries under age 65.
- About 45 percent of Oregon Medicare beneficiaries opt for Medicare Advantage plans.
- Oregon has 26 stand-alone Part D drug plans in 2019, ranging from $15 to $117 per month.
- Average Medicare spending per Oregon enrollee was the third-lowest in the nation in 2017.
Oregon Medicare enrollment
As of September 2018, enrollment in Medicare in Oregon stood at 835,111 people. That’s nearly 20 percent of the state’s total population, compared with about 18 percent of the United States population enrolled in Medicare.
Most people gain eligibility for Medicare when they turn 65. But Medicare eligibility is also triggered when a person has been receiving disability benefits for 24 months, or has ALS or end-stage renal disease. Nationwide, 16 percent of all Medicare beneficiaries were under the age of 65 as of 2016; in Oregon, it was 14 percent.
Medigap plans are subject to various federal rules, but states also have a lot of say in how the plans operate. Oregon has a rule to ensure that Medigap enrollees aren’t stuck with their plan forever, regardless of their health status. And the state also guarantees access to Medigap plans for Medicare beneficiaries under age 65.
Medigap plans are standardized at the federal level, and federal law guarantees access to Medigap plans when people turn 65 and enroll in Medicare Part B (you have to also be enrolled in Medicare Part A in order to have Medigap, but the six-month open enrollment period for Medigap plans starts when you are at least 65 and enrolled in Part B).
But unlike Medicare Advantage and Part D, there’s no federal annual open enrollment period for Medigap plans; once that initial six-month window ends, it’s gone forever (except for the limited circumstances that trigger a guaranteed-issue right for Medigap). People who want to switch to a different Medigap plan are generally subject to medical underwriting, so healthy people can switch plans, but those with pre-existing medical conditions may not be able to do so. And people under age 65 (who are eligible for Medicare due to a disability or having end-stage renal disease or ALS) are not guaranteed access to Medigap under federal rules
To address this, Oregon implemented a “birthday rule” in 2013 that allows Medigap enrollees an annual opportunity to switch to a plan with equal or lesser benefits during the 30 days following their birthday. The new plan is guaranteed issue during that window.
Oregon also allows Medicare beneficiaries under age 65 a six-month window (after enrolling in Medicare Part B) during which they have a guaranteed-issue right to a Medigap plan. Eligible enrollees can select a Medigap plan with no medical underwriting during a six-month window after they enroll in Medicare Part B, and the premium cannot exceed the premiums that are charged to enrollees who are 65.
There are three approaches to premiums that Medigap insurers can use: Attained-age rating, issue-age rating, and community rating. Oregon does not mandate one or the other, so most insurers in the state use attained-age rating. That means premiums increase as the enrollee gets older. There are a few Medigap insurers that use issue-age rating (premiums are based on the age the person was when they enrolled) or community rating (premiums don’t vary with age).
According to an AHIP analysis, 143,359 Medicare beneficiaries in Oregon had Medigap coverage as of 2016.
Medicare Advantage plans allow beneficiaries to obtain their coverage via private plans instead of through Original — or traditional — Medicare (the federal government’s fee-for-service program). These plans are one option for consumers who desire additional benefits beyond what Original Medicare offers, but the plans are run by private insurers that have more limited provider networks than Original Medicare. And although Medicare Advantage plans do have caps on out-of-pocket costs (unlike Original Medicare on its own), the out-of-pocket exposure is generally more than a person would have if they purchased a Medigap plan and Part D plan to supplement Original Medicare. There are pros and cons with both options.
381,492 of Oregon’s Medicare beneficiaries had Medicare Advantage plans as of December 2018. That’s nearly 46 percent of the state’s total Medicare population, as opposed to about 36 percent of Medicare beneficiaries nationwide selecting Medicare Advantage coverage.
There are Medicare Advantage plans available in all 36 counties in Oregon in 2019. But the number of plans for sale varies from as few as five to as many as 37, depending on the county.
Original Medicare does not cover prescription drugs, so enrollees need supplemental coverage for drug costs. Many enrollees have supplemental coverage via an employer-sponsored plan or Medicaid, but Medicare Part D plans are available for those who need to obtain their own prescription coverage (prior to 2006, there were some Medigap plans that included prescription coverage; those are no longer for sale, but people who still have them are allowed to keep them).
Medicare Part D was created under the Medicare Modernization Act of 2003. Part D coverage can be purchased on a stand-alone basis or integrated with a Medicare Advantage plan (nine out of ten Medicare Advantage plans include Part D prescription coverage in 2019).
As of December 2018, there were 268,780 Oregon Medicare beneficiaries enrolled in stand-alone Part D prescription drug plans. Another 361,523 beneficiaries had Part D coverage integrated with their Medicare Advantage plans. Nationwide, more people have Medicare Part D via stand-alone plans, but Medicare Advantage enrollment in Oregon is higher than average.
In 2017, Medicare spent an average of $7,510 per Original Medicare beneficiary in Oregon (this analysis did not include costs for Medicare Advantage enrollees). The national average that year was $9,761 per enrollee, so costs are significantly lower in Oregon; Alaska and Hawaii are the only states where average per-beneficiary spending was lower (the cost analysis standardizes the data to eliminate geographic differences in payment rates).
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.