At a glance: Medicare health insurance in Illinois
More than 2.2 million residents are enrolled in Medicare in Illinois.
About 30% of Illinois Medicare beneficiaries are enrolled in private plans — most Medicare Advantage plans but also some Medicare Cost plans.
Since the 1980s, Illinois has required Medigap insurers to sell plans to disabled Medicare beneficiaries under age 65. Illinois also has a year-round guaranteed-issue Medigap plan from BCBSIL for people over the age of 65.
Illinois residents can select from among 28 stand-alone Part D prescription plans in 2020, with premiums ranging from about $13 to $136 per month.
Original Medicare spending in Illinois is about 4 percent higher than the national average.
Medicare enrollment in Illinois
Most beneficiaries are eligible for Medicare coverage enrollment because they’re at least 65 years old. But Medicare eligibility is also triggered when a person has been receiving disability benefits for two years, or has ALS or end-stage renal disease. Nationwide, 15 percent of people filing for Medicare benefits are under 65; in Illinois, it’s 13 percent. But that still amounts to about 300,000 people under 65 who are enrolled in Medicare in Illinois.
Medicare Advantage in Illinois
Although Medicare is funded and run by the federal government, enrollees can choose whether they want to receive their benefits directly from the federal government via Original Medicare or enroll in a Medicare Advantage plan offered by a private insurer, if such plans are available in their area. There are pros and cons to Medicare Advantage and Original Medicare, and no single solution that works for everyone.
There are Medicare Advantage plans for sale throughout Illinois, with plan availability ranging from 3 plans to 62 plans, depending on the county.
22 percent of Medicare beneficiaries in Illinois were enrolled in Medicare Advantage plans as of 2018, compared with an average Medicare Advantage enrollment of 34 percent nationwide. But by July 2020, about 30 percent of the people with Medicare in Illinois — 683,567 people — had private coverage (as opposed to Original Medicare; that figure does not include people who had private plans to supplement Original Medicare). The vast majority of those people are enrolled in Medicare Advantage plans, but there are also some Medicare beneficiaries with Medicare Cost plans in Illinois, accounting for some of the private plan enrollees. Nationwide, the percentage of private plan Medicare coverage enrollment had increased to 40 percent by mid-2020, so the increase in Illinois is in keeping with the national trend.
Medicare’s annual election period (October 15 to December 7 each year) allows Medicare beneficiaries the opportunity to switch between Medicare Advantage plans and Original Medicare and/or add or drop a Medicare Part D prescription plan. Medicare Advantage enrollees also have the option to switch to a different Advantage plan or to Original Medicare during the Medicare Advantage open enrollment period, which runs from January 1 to March 31.
Medigap in Illinois
Original Medicare does not limit out-of-pocket costs, so most enrollees maintain some form of supplemental coverage. More than half of Original Medicare beneficiaries nationwide receive their supplemental coverage through an employer-sponsored plan or Medicaid. But for those who don’t, Medigap plans (also known as Medicare supplement plans) are designed to pay some or all of the out-of-pocket costs (deductibles and coinsurance) that Medicare beneficiaries would otherwise have to pay themselves.
Medigap plans are sold by private insurers, but the plans are standardized under federal rules, with ten different plan designs (differentiated by letters, A through N). The benefits offered by a particular plan (Plan C, Plan G, etc.) are the same regardless of which insurer is selling the plan. So plan comparisons are much easier for Medigap policies than for other types of health insurance; consumers can base their decision on premiums and less tangible things like customer service, since the benefits themselves are uniform.
As of 2020, there are 52 insurers that offer Medigap plans in Illinois. According to an AHIP analysis, there were 788,500 Illinois Medigap enrollees in 2018, so nearly half of the state’s Original Medicare population had Medigap coverage. This is higher than the rate in most states; nationwide, about a quarter of Original Medicare beneficiaries have Medigap coverage.
Unlike other private Medicare coverage (Medicare Advantage plans and Medicare Part D plans), there is no annual open enrollment window for Medigap plans. Instead, federal rules provide a one-time six-month window when Medigap coverage is guaranteed-issue. This window starts when a person is at least 65 and enrolled in Medicare Part B (you must be enrolled in both Part A and Part B to buy a Medigap plan). But as we’ll discuss in a moment, Illinois has stronger consumer protections in this area than most other states.
People who aren’t yet 65 can enroll in Medicare if they’re disabled and have been receiving disability benefits for at least two years, and 13 percent of Medicare beneficiaries in Illinois — about 300,000 people — are under 65 years old. Federal rules do not guarantee access to Medigap plans for people who are under 65, but the majority of the states, including Illinois, have enacted laws to ensure at least some access to private Medigap plans for disabled enrollees under the age of 65.
Illinois was one of the first to do so (see Illinois Insurance Code, Section 363). Since 1989, Illinois has required all Medigap insurers to sell policies to disabled Medicare beneficiaries. Medigap insurers must sell any of their available plans to beneficiaries under age 65, with a six-month guaranteed-issue window that starts when the person is enrolled in Medicare Part B (or when they are determined eligible for retroactive Medicare Part B coverage).
And while Medigap insurers in Illinois can charge an under-65 beneficiary higher premiums than they would charge a 65-year-old, beneficiaries under age 65 cannot be charged more than the insurer’s highest on-file rate for people over age 65. So a Medigap insurer could, for example, charge a 45-year-old the same premium they would charge an 85-year-old, but they cannot have an entirely separate set of under-65 rates that are higher than any of the age-based premiums for people over 65.
Illinois also goes a step beyond what many other states provide in terms of Medigap access for people under the age of 65: A disabled Medicare beneficiary who did not purchase a Medigap plan during their initial six-month enrollment window can buy a plan from Blue Cross Blue Shield of Illinois between October 15 and December 7 (although this is the same window during which Medicare beneficiaries have open access to Medicare Part D plans and Medicare Advantage plans, this is not a general open enrollment period for Medigap plans).
Blue Cross Blue Shield of Illinois also offers year-round guaranteed-issue coverage, regardless of medical history and at standard premiums, for people who are over the age of 65 and who are no longer in their initial enrollment period for Medigap. This is a fairly rare provision; most states do not have a year-round guaranteed-issue option for Medigap plans after a person’s initial enrollment period has closed.
As of 1999, a decade after Illinois began requiring Medigap insurers to offer plans to disabled beneficiaries under age 65, there were only 14 states with laws requiring Medigap insurers to offer even a single plan to people under age 65. Today, there are at least 33, although there are still several states that have made no provisions to ensure access to Medigap plans for disabled Medicare beneficiaries.
Although the Affordable Care Act eliminated pre-existing condition exclusions in most of the private health insurance market, those regulations don’t apply to Medigap plans. Medigap insurers can impose a pre-existing condition waiting period of up to six months, if you didn’t have at least six months of continuous coverage prior to your enrollment. And if you apply for a Medigap plan after your initial enrollment window closes (assuming you aren’t eligible for one of the limited guaranteed-issue rights), the insurer can look back at your medical history in determining whether to accept your application, and at what premium.
Illinois Medicare Part D
Original Medicare does not cover outpatient prescription drugs. More than half of Original Medicare beneficiaries have supplemental coverage via an employer-sponsored plan or Medicaid, and these plans often include prescription coverage. But Medicare enrollees without creditable drug coverage need to obtain Medicare Part D prescription coverage. Medicare Part D plans can be purchased as a stand-alone plan, or as part of a Medicare Advantage plan that includes Part D prescription drug coverage.
Insurers in Illinois are offering 28 stand-alone Medicare Part D plans for sale in 2020, with premiums that range from about $13 to $136/month.
As of mid-2020, more than 1.7 million beneficiaries of Medicare in Illinois had Medicare Part D coverage. About 64 percent of them had stand-alone Medicare Part D plans, while the other 36 percent had Medicare Advantage plans that included Part D coverage.
Medicare Part D enrollment follows the same basic schedule as Medicare Advantage enrollment: Beneficiaries can pick a Part D plan when they’re first eligible for Medicare (or when they lose creditable drug coverage they had under another plan), or during the annual open enrollment period in the fall, from October 15 to December 7.
Medicare spending in Illinois
In 2017, Original Medicare in Illinois was spending an average of $10,525 per-beneficiary , based on data standardized to eliminate regional differences in payment rates (the data did not include costs for Medicare Advantage plans). Nationwide, average per beneficiary Original Medicare spending was $10,096 per enrollee, so Medicare spending in Illinois was about 4 percent higher than the national average.
Medicare in Illinois: Resources for Medicare beneficiaries and their caregivers
Need help with your Medicare application in Illinois, or Medicare eligibility in Illinois? You can contact the Illinois Senior Health Insurance Program with questions related to Medicare coverage in Illinois.
The Illinois Department on Aging has an excellent resource for Illinois residents who are shopping for Medigap plans.
Illinois has a helpful handbook for state employees who are transitioning to Medicare.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.