ElderWeb

Consumer Reports has issued a rating of MediGap and HMO plans in 30 major cities around the country, including comparative premiums for each of the 559 Medicare-supplement policies and 273 Medicare HMOs they reviewed. The report also explains terminology to help consumers understand the difference between terms like "Attained Age," "Issue Age," and "Community Rating." (MediGap policies with "Attained Age" provisions charge different premiums to people as they grow older. "Issue Age" provisions lock in premiums based on the age of the beneficiary at the time the policy is taken out, and "Community Rating" provisions ignore the age of the beneficiary and charge premiums based on the health of the whole group of beneficiaries in that community.)

The Medicare Rights Center of New York City found that leading Medigap insurers provided inaccurate information to prospective customers about their rights to Medigap coverage. For example, half the representatives they contacted incorrectly answered that their company could not provide MediGap coverage to a 75 year old with cancer who had been dropped by her Medicare plan. Actually, federal law states that beneficiaries who are dropped by their managed care plan cannot be refused a Medigap policy on the basis of their health.

This inaccurate information could have impacted thousands of people. Last year about 300,000 participants in Medicare HMOs had to find a new plan when their managed care plan withdrew from the Medicare program, and they had to either join another Medicare HMO or return to the standard Medicare program. In some cases, they had no choice, since there was no other Medicare HMO available in their area. If they returned to the standard Medicare program, most would have attempted to buy a MediGap policy from a private insurance company to cover co-insurance and deductibles, or to get coverage for prescription drugs. Without a Medigap policy, beneficiaries would have had to cover these expenses out of pocket.