Bill offers affordable coverage for disabled

Carriers must offer supplemental coverage for six months
January 29, 2014
A new law allows disabled Medicare recipients affordable supplemental insurance policies, but eligible residents have only six months to sign up. SOURCE FILE PHOTO

A bill that took effect Jan. 1 could significantly aid disabled Delaware residents - but many of them likely know nothing about it and must act by June to take advantage of the help.

When a person under age 65 becomes eligible for Medicare due to a disability, the federal program covers 80 percent of the person’s medical care.  Low-income residents qualify for government assistance to cover the remaining 20 percent.

Middle-income residents must pay the remaining 20 percent unless it is covered by a private insurance carrier.

Heather Block, a Lewes resident who championed the bill, suffers from metastasized breast cancer.  She receives Medicare, but the bills Medicare does not cover were more than she could afford, she said.

Block said until the bill was passed, insurance companies in Delaware could refuse to offer supplemental coverage or charge thousands of dollars a month.

“You never qualify for assistance, but your assets are just bled out by these bills,” she said.  “My choices became either to move or pass legislation.”

Senate Bill 42, signed into law July 15, allows disabled Medicare recipients affordable supplemental insurance policies.

Under the law, insurance carriers can set only one state-approved rate for supplemental insurance coverage.  The rate is the same whether the person suffers from cancer, multiple sclerosis or Parkinson’s, Block said.

“They can’t reject you; they can’t ask your medical diagnosis,” Block said.

The only exception is for kidney disease, which is extremely expensive to treat, Block said.

Many Delaware residents have likely applied for supplemental - or Medigap -coverage in the past, but were either rejected or did not buy it because the cost was too high, she said.  “They need to try again, and they don’t know that,” Block said.

The bill, which Block said took her nine months get passed, allows only a six-month window for eligible residents to purchase the coverage.  Residents who are already on Medicare have until June to purchase a Medigap policy.  Residents who sign up for Medicare after Jan. 1 have the same six-month window after they submit an application for Medicare.

Block said up to 17,000 Delawareans could be eligible for assistance.

After June, insurance companies can again reject disabled Medicare recipients under 65, charge extremely high rates for supplemental coverage and change rates depending on the applicant’s diagnosis.

Left out of the Affordable Care Act

The federal Affordable Care Act prohibited insurance companies from refusing coverage based on pre-existing conditions.  Only disabled Medicare recipients under 65 were excluded, Block said.

Individual states were tasked with deciding whether insurance carriers had to provide supplemental insurance for this group, she said.  Delaware opted to allow carriers to reject people like Block.

“This was a battle,” she said.  “We’re an expensive group.”

But, Block said, she is not looking for a handout.  “This law is to help people that want to buy their own insurance,” she said.