The best way to understand the significance of having Medicare Supplement Insurance is to learn why it was created in the first place. You may have thought you were finished with school, but get out your number 2 pencils because it is time for a Medigap history lesson.
It all began in 1966 when Lyndon B. Johnson took office. LBJ signed the Medicare Act into office, which provided government funded care to people 65 and older who were receiving Social Security Disability for at least two years. The problem was that at this time Medicare only paid for 70% of medical expenses. (Today it still only pays for 80%). Out of a problem comes a solution, hence the creation of Medigap insurance.
The first Medicare Supplement Insurance policy was sold by Banker’s Life in 1971.
Banker’s Life dominated the industry with just under half of the market share of new insurance sales. Soon many other private insurance companies followed suit and sold policies.
In 1981 the government standardized Medigap insurance by designating each plan with the letters A-J. Medigap Plan A would be the most minimal coverage while Plan J would offer the most extensive benefits.
In June of 2010, Medigap Plan M and Medigap Plan N were added to the Medigap family and E, H, I, and J were eliminated.
Medicare Supplemental policies fulfilled a void left by Medicare and continue to do so today. When Obama took office in 2008, he made significant changes to the health care system and plans for Medicare are still evolving. We’ll keep you updated on the MedicareMall blog as this historical movement unfolds.
To get more information about Medicare Supplement Insurance plans, talk to one of our Medigap plan representatives today or use our instant quote below.