Proponents of providing medigap coverage for those under 65 with disabilities will try again

All but 14 states allow those under retirement age to purchase such Medicare supplemental policies

By: - December 21, 2023 5:45 am

For those under 65 with disabilities, the costs of drugs and other things not covered by Medicare can cause crippling financial stress. Allowing such people to purchase supplemental medicap is being sought in Nebraska. (iStock/Getty Images Plus)

LINCOLN— Seven years ago, Shawna Thompson, a registered nurse, was a passenger in an ambulance that veered off an Interstate highway when the driver fell asleep.

 Thompson, who lives in North Platte, suffered a traumatic brain injury in the crash.

 Since then, the 58-year-old has gone from taking four pills a day to 20 to deal with her foggy brain and inability, at times, to verbalize what she wants to say.

Can’t add without using fingers

“I still cannot add two and two together without using my fingers,” Thompson said. “I look completely normal. But when I walk, I get really nervous. I have a real problem talking.”

Shawna Thompson
Shawna Thompson and her husband, Dennis, just prior to an accident seven years ago that left her with a traumatic brain injury. (Courtesy of Shawna Thompson)

But what has happened since infuriates Thompson.

Because she is younger than 65, she cannot obtain the “supplemental” insurance offered to Medicare patients, so-called medigap insurance that is commonly purchased by those of retirement age or older.

Because a workers compensation settlement fell far short of paying her expenses for doctors’ visits in Denver and the deluge of pills she must take, and because she cannot buy medigap coverage, Thompson and her husband are on the hook for $13,000 in additional medical expenses each year.

It’s forced her husband, Dennis, the fire chief in North Platte, to put off his retirement in order the pay the bills.

All but 14 states allow medigap coverage

It’s also prompted Thompson to join another North Platte couple in asking the Nebraska Legislature to change state law, to allow those under 65 who have disabilities to buy medigap policies to cover expenses not covered by regular Medicare.

All but 14 states currently allow some form of medigap coverage to be purchased by those under 65 on disability.

 “If we could get medigap coverage to cover my meds, we wouldn’t have had pay $13,000,” she said.

Thompson said sarcastically that when she inquired with insurance agents about purchasing supplemental insurance to cover drug costs, “they just laughed at me.”

‘You’re on your own’

“You’re under 65. You’re on your own to pay for that,” she said she was told.

This is the second time there’s been an attempt to require insurance companies in Nebraska to provide medigap insurance to those under 65.

In 2022, a bill introduced at the urging of another North Platte couple, Steve and Jean Kay, failed to advance due to opposition by the insurance industry, which argues that adding such high-cost disabled people to the insurance rolls would increase costs for others.

“When you put more unhealthy or costly people into the Medicare population, the premiums have to go up,” said Robert Bell, executive director of the Nebraska Insurance Federation.

That, he said, adds to the cost of Medicare supplements, which are passed on as higher rates for seniors. 

“We don’t feel they should have to subsidize the costs of the under 65 population,” Bell said.

Costs would be shifted to others

He cited one disability as particularly expensive: end-stage renal disease, or ESRD, when a person has permanent kidney failure, requiring regular dialysis or a kidney transplant.

The costs for such patients is six times higher than other seniors, Bell said, citing a study by the MedPAC, a nonpartisan independent advisor to the government on the Medicare program.

Medigap plans allowed in other states for those under 65 vary widely, he said. Some exclude medigap coverage for ESRD, because it is so costly, while others allow coverage but at higher rates that are capped, providing some savings.

State Sen. Mike Jacobson of North Platte. (Zach Wendling/Nebraska Examiner)

State Sen. Mike Jacobson of North Platte, who introduced a bill to allow medigap policies for people under 65, said he continues to meet with the insurance lobby to see if some middle ground can be found on his legislation.

“It’s a delicate balance,” Jacobson said.

The senator said he wants to get something passed during the 2024 session, “if we can get over that hurdle (of cost).”

Steve Kay, who had to take a job in North Dakota to provide health affordable care coverage for his wife, Jean, who has multiple sclerosis, has looked into how many people such a medigap bill might help.

Using Medicare enrollment figures for those under 65 and discounting those low-income persons who get Medicaid coverage, Kay projected that a medigap law would help 17,377 Nebraskans obtain insurance coverage, less that 5% of that population. Only 496 Nebraskans with ESRD are among that group.

Time to ‘close the gap’

Kay, a retired lawyer, said the medigap problem has gone away for his family because his wife has reached age 65 and can purchase supplemental insurance. But, he said, it’s time to “close the gap” for others.

 “It’s bad enough to face the disability, but to also have the financial stress, it can be too much,” Steve Kay said.

For now, the insurance industry in Nebraska, Bell said, recommends that disabled persons under 65 who need insurance should look into a Medicare “Advantage” plan, a type of managed care offered through private insurance.

But Kay and Thompson said that in central Nebraska and rural areas, it’s hard to find providers who handle Advantage cases.

 Thompson said she would never have had to go onto Social Security disability or be on Medicare “or worry about the gap” if medicap plans were permitted for those under 65 in Nebraska.

 “I’m lucky my spouse still works,” she said. “Our plan was he would retire at 60 and we would travel. But he will have to work another 10 years.”


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Paul Hammel
Paul Hammel

Senior Reporter Paul Hammel has covered the Nebraska state government and the state for decades. Previously with the Omaha World-Herald, Lincoln Journal Star and Omaha Sun, he is a member of the Omaha Press Club's Hall of Fame. He grows hops, brews homemade beer, plays bass guitar and basically loves traveling and writing about the state. A native of Ralston, Nebraska, he is vice president of the John G. Neihardt Foundation.

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