AARP Minnesota Stands Against New Medigap Penalties and Enrollment Restrictions

AARP Minnesota is raising concerns over a recent decision by the Legislature’s Commerce working group that could significantly impact Medicare choices for older Minnesotans.

The new proposal would allow insurance companies to deny Medigap plans to Minnesotans aged 70 and older with pre-existing conditions. Additionally, it introduces a lifetime penalty for those aged 65 to 70 who enroll in a Medigap plan during the annual open enrollment period. This penalty, which will increase to 35% by 2029, will substantially raise healthcare costs for older adults. If this proposal is enacted, Minnesota will be the only state to impose a government-mandated penalty on Medigap plans.

Traditional Medicare, while providing comprehensive health coverage, requires substantial cost-sharing with no cap on out-of-pocket costs. This can lead to extremely high costs for those with serious health issues. To mitigate this risk, many individuals supplement their Medicare benefits with a Medigap plan, which covers some of these out-of-pocket costs. Without the ability to purchase a Medigap plan, many Minnesotans will be left without the choice to switch from a Medicare Advantage plan to Traditional Medicare, limiting their options to best meet their healthcare needs.