Medigap and Medicare Advantage Critical Options for Low-Income Beneficiaries

WASHINGTON, May 12 /PRNewswire/ -- A significant number of low-income beneficiaries chose Medicare Advantage and Medigap insurance over Medicare fee-for-service alone, two new studies released today found.

The studies also show that Medigap is a particularly valuable option for low-income Medicare beneficiaries living in rural areas, and that Medicare Advantage is an important option for low-income and minority individuals.

Conducted by America's Health Insurance Plans (AHIP) Center for Policy and Research, the reports are the latest evidence of the value of private-sector options for Medicare beneficiaries.

Karen Ignagni, President and CEO of AHIP, said the reports demonstrate that Medicare Advantage and Medigap are both succeeding in improving low- income beneficiaries' access to affordable health care.

"Private-sector coverage options strengthen the safety net for low-income Medicare beneficiaries and help expand access to important health care services," said Ignagni. "These results demonstrate the enhanced value of vibrant public-private partnerships."

The new studies are being released at a time when numerous health insurance plans are committing to expanding access to affordable coverage for beneficiaries through their participation in the Medicare prescription drug program, Medigap and Medicare Advantage.

  Key findings in the Medicare Advantage study include:

  * A high percentage of Medicare Advantage enrollees had low incomes.
    Additionally, Medicare Advantage served a high percentage of minorities.

  * 71 percent of minority (non-white) Medicare Advantage enrollees had
    incomes below $20,000.

  * 50 percent of all Medicare Advantage enrollees in 2002 had incomes less
    than $20,000.

  * In some parts of the country (primarily high population density areas),
    over half of low-income Medicare beneficiaries not enrolled in Medicaid
    or employer-based coverage chose a Medicare Advantage plan.

  Key findings in the Medigap study include:

  * Medigap policyholders more often lived in rural areas; they also had
    lower-than-average incomes (among beneficiaries not eligible for
    Medicaid) when compared to all Medicare beneficiaries.

  * 32 percent of Medigap policyholders resided in a rural area (24 percent
    of all Medicare beneficiaries resided in a rural area).

  * 45 percent of all Medigap policyholders had incomes under $20,000.

  * 33 percent of all Medigap policyholders had incomes $10,000 to $20,000.

  * 53 percent of all rural Medigap policyholders had incomes under $20,000.

Both studies are based on data from the 2002 Medicare Current Beneficiary Survey conducted by the Centers for Medicare and Medicaid Services (CMS).

The studies are available at http://www.ahipresearch.org/, the website of AHIP's Center for Policy and Research or at http://www.ahip.org/.

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