Summary: Owning multiple health insurance policies to supplement Medicare is both costly and unnecessary. GAO estimated that about 3 million elderly Medicare beneficiaries paid about $1.8 billion in 1991 for policies that probably involved duplicate coverage. Many of these people had supplemental coverage through employer-sponsored plans. About 500,000 other Medicare beneficiaries who were also eligible for Medicaid because of limited incomes spent about $190 million on unnecessary supplemental insurance. Although retirees with employer-sponsored coverage generally do not need to buy a Medigap policy, many employers with retiree health plans are increasing cost-sharing or tightening eligibility requirements. Such changes may make an employer-sponsored plan less attractive. In addition, the employer may terminate the plan. Federal Medigap requirements provide a one-time "open season" for people to buy Medigap insurance, regardless of health status, within six months of enrolling in Medicare part B. If a retiree's employee-sponsored plan is changed or cancelled after the open season, the retiree has lost the guaranteed access to a Medigap plan. To alleviate this potential problem, Congress would have to revise the law.
