Medicare in Vermont

Nationwide, a third of all Medicare beneficiaries had Medicare Advantage plans as of 2017. But in Vermont, just 9% of the state’s Medicare beneficiaries were enrolled in Advantage plans at that point.

Enrollment in Medicare Advantage has been steadily growing. Nationwide, private Medicare coverage (not counting supplemental plans like Medigap and Part D) accounted for about 46% of all Medicare beneficiaries as of 2022. Private plan Medicare coverage in Vermont was still well below that level as of 2022, but it had increased significantly since 2017, growing to more than 27% of the state’s Medicare population (43,837 beneficiaries, out of a total of 159,383).

The remaining 73% of Vermont’s Medicare beneficiaries had opted instead for coverage under Original Medicare.

Medicare Advantage plans are provided by private insurers, so plan availability varies by area. Vermont has 14 counties, and the number of available Medicare Advantage plan options for 2023 varies from 16 to 25, depending on the county (up from just seven or nine per county in 2019).

Medicare Advantage plans provide all of the benefits of Medicare Part A (hospital coverage) and Part B (outpatient/medical coverage), and most plans also incorporate Part D coverage (prescription drugs) as well as extra benefits like dental and vision coverage, gym memberships, and a nurse hotline. But out-of-pocket costs (deductible, coinsurance, copays) vary under Advantage plans, and are not the same as a person would have under Medicare Part A and B plus a Medigap plan. There are pros and cons to each option, and no single solution that works for everyone.

Medicare beneficiaries can switch from Original Medicare to Medicare Advantage enrollment, and vice versa, during the annual election period each fall (October 15 through December 7), with coverage effective January 1. There is also a Medicare Advantage open enrollment period (January 1 to March 31) during which people who are already enrolled in Medicare Advantage plans can switch to a different Medicare Advantage plan or drop their Medicare Advantage plan and enroll in Original Medicare instead.

Read our comprehensive guide to Medicare’s fall open enrollment period.

Original Medicare does not have a cap on out-of-pocket costs (coinsurance and deductibles), so people with chronic conditions can incur substantial out-of-pocket medical costs. Employer-sponsored plans or Medicaid serve as supplemental coverage for more than half of all Medicare beneficiaries nationwide, but for those who don’t have access to those plans, Medigap plans (also known as Medicare supplements or MedSupp plans) are an important part of having full coverage. Medigap plans are designed to supplement Original Medicare, covering some or all of the out-of-pocket costs (for coinsurance and deductibles) that people would otherwise incur if they only had Original Medicare on its own. Medigap plans cannot be used in conjunction with Medicare Advantage plans.

There are 14 insurers that offer Medigap plans in Vermont. On the Vermont Department of Financial Regulation’s website, you’ll find an extensive guide that provides information about Medigap plans in the state.

According to an AHIP analysis, there were 53,247 Vermont Medicare beneficiaries with Medigap plans as of 2020.

Medigap plans are standardized under federal rules, so Plan A offers the same covered benefits regardless of which insurer offers it, as does Plan G, Plan K, etc. (premiums vary significantly from one insurer to another, as do things like customer service and additional benefits beyond the standardized benefits, such as a 24-hour nurse hotline). But Medigap standardization means that plan comparisons are easier than they are in other insurance markets.

In most states, Medigap plans can be priced using attained-age rating (rates increase as the enrollee gets older), issue-age rating (rates are based on the age the person was when they enrolled), or community rating (rates do not vary based on age). Vermont does not allow Medigap insurers to use attained-age rating (see Section 15(F) of the state statute), and instead requires community rating as long as the enrollee is at least 65 years old (very few states require this; Vermont’s consumer protection is strong in terms of rating rules). So in Vermont, rates for a given plan only vary based on whether the enrollee is under 65 or 65+ (Vermont is also one of only two states where insurers offering non-Medicare individual market coverage are also required to charge the same price regardless of how old an enrollee is).

Under federal rules, people are granted a six-month window during which they can enroll in a Medigap plan regardless of their medical history. This window starts when they’re at least 65 and enrolled in Medicare Part B. Federal rules do not, however, guarantee access to a Medigap plan if you’re under 65 and eligible for Medicare as a result of a disability.

To address this, the majority of the states have implemented rules ensuring at least some access to Medigap plans for people who are under age 65, and Vermont is among them. Vermont requires Medigap insurers to make all of their plans available to Medicare beneficiaries, regardless of age, during the first six months after the person is enrolled in Medicare Part B.

It’s important to note, however, that Vermont’s guaranteed-issue provision does not apply to people under 65 who are eligible for Medicare due to end-stage renal disease. But Vermont’s legislature is considering a bill in 2023 that would eliminate the exception for people with ESRD. If enacted, it would ensure that these beneficiaries have access to Medigap plans during the six-month window when they first enroll in Medicare.

Although Medigap plans are guaranteed-issue for people under 65 during their six-month enrollment window, insurers can charge higher premiums for people under 65. As an example, rates for Medigap Plan A for a person who is 65+ range from $108/month to $198/month in 2023. But for an applicant who is under age 65, premiums for Medigap Plan A in Vermont range from $148 to $461 per month. (H.366, the legislation under consideration that would ensure guaranteed-issue access to Medigap for people with ESRD, would allow for higher premiums for that population as well.)

Disabled Medicare beneficiaries have access to the normal Medigap open enrollment period when they turn 65. At that point, they have access to any of the available Medigap plans, at the standard age-65+ rates.

Disabled Medicare beneficiaries, including those with ESRD, have the option to enroll in a Medicare Advantage plan instead of Original Medicare. Medicare Advantage premiums are not higher for those under 65. But Advantage plans have more limited provider networks than Original Medicare, and total out-of-pocket costs can be as high as $8,300 per year for in-network care in 2023, plus the out-of-pocket cost of prescription drugs.

Original Medicare does not cover outpatient prescription drugs. Many Medicare beneficiaries have supplemental drug coverage from an employer or Medicaid, but for those who don’t, Medicare Part D enrollment is an important part of having full coverage. Medicare Part D was created under the Medicare Modernization Act of 2003, and can be purchased on a stand-alone basis or as part of a Medicare Advantage plan with integrated Medicare Part D enrollment coverage.

As of November 2022, 81,615 Vermont Medicare beneficiaries had stand-alone Medicare Part D prescription drug plans, and another 41,148 had Part D coverage integrated with their Medicare Advantage coverage. In total, about 77% of Vermont’s Medicare beneficiaries had Part D coverage, either as a stand-alone plan or as part of an Advantage plan.

For 2023 coverage, there are 24 stand-alone Medicare Part D plans available in Vermont, with premiums ranging from about $7 to $127 per month.

Many Medicare beneficiaries receive financial assistance through Medicaid with the cost of Medicare premiums and services Medicare doesn’t cover – such as long-term care.

Our guide to financial assistance for Medicare enrollees in Vermont includes overviews of these benefits, including Medicare Savings Programs, long-term care coverage, and eligibility guidelines for assistance.

Questions about Medicare in Vermont? You can also contact the Vermont State Health Insurance Program, which serves as a resource for Medicare beneficiaries in the state. They can help with questions related to Medicare enrollment, eligibility, or coverage in Vermont.

The Vermont Department of Financial Regulation, Insurance Division, oversees and licenses health insurance companies (including those that offer private Medicare plans in Vermont), brokers, and agents in Vermont. They can answer questions, provide information, and address consumer complaints about entities licensed under their authority.

The Medicare Right Center is a nationwide service, offering a website and call center, where Medicare beneficiaries and their caregivers can get information, assistance, and answers to questions.

Medicare beneficiaries with fairly low income and assets can get assistance through Vermont’s Medicaid program. This overview of the available programs is a good resource.