U.S. panel urges nine new Medigap insurance policies Use of policies to pay costs beyond Medicare would simplify process, protect consumers.

April 09, 1991|By New York Times

WASHINGTON -- In a move to protect consumers and simplify choices for the elderly, the nation's insurance commissioners have chosen nine standardized health insurance policies to supplement coverage provided by the federal government through Medicare.

They will soon replace the bewildering jumble of supplemental policies now offered in the private market.

The nine policy alternatives would greatly simplify the choice for an elderly person seeking private "Medigap" insurance to pay the hospital charges, doctors' bills and other medical expenses that are not covered by Medicare.

They would offer a wide range of coverage. Every policy would pay for certain basic items not covered by Medicare, including payment for the patient's 20 percent share of doctors' bills and the patient's required contribution to the cost of a long hospital stay, which is $157 a day for the 61st through the 90th day.

Seven of the nine standard policies also would cover the deductible paid by Medicare beneficiaries for hospital care, now $628.

Officials say the premiums for these Medigap policies probably will be about the same as those for the current policies -- $40 to $120 a month, depending on the age of the policyholder and the scope of the benefits.

Under a new federal law, insurers will be forbidden to offer Medigap policies other than those designed and approved by the commissioners. Twenty-three million Americans, or more than two-thirds of all the elderly, buy such policies.

The existing Medigap market offers thousands of policies with almost meaningless distinctions, and as a result elderly people often pay for unnecessary, duplicative health insurance. Congressional investiga

tors found cases in which insurance agents, using high-pressure tactics, sold more than 15 policies to the same person in three years.

The new law, signed by President Bush in November, directed the National Association of Insurance Commissioners to design up to 10 standard policies, each containing "a core group of basic benefits."

The nine "packages of benefits" will soon replace the thousands of policies sold to elderly people in the private market. Anyone who sold an unapproved Medigap policy would be subject to a fine of up to $25,000.

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