Summary: Although the Medicare program covers a substantial share of its beneficiaries' health expenses, it does require deductibles and coinsurance that can amount to thousands of dollars a year. Most beneficiaries obtain private insurance to supplement Medicare when they become eligible for the program at age 65. On occasion, beneficiaries decide to change Medigap policies and may then become subject to medical underwriting--that is, the insurer can take into account a person's health status or medical history in deciding whether to sell a policy. GAO found that few beneficiaries decide later to change their policies, and those that do have at least one alternative for changing without being subject to medical underwriting. These alternatives, however, are not guaranteed by federal law, and it is possible that circumstances could change in the future. Federal Medigap law could be amended to furnish such a guarantee to beneficiaries who have been continuously covered by Medigap. Such a change should not have any major effect because it would not alter beneficiary incentives for Medigap coverage.
