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Fund offers Medigap health subsidies for poor seniors

Karen Bouffard
The Detroit News

Subsidies are available starting Oct. 1 to help low-income seniors purchase Medigap health insurance policies, the Michigan Health Endowment Fund announced Wednesday.

The endowment fund estimates as many as 79,000 Michigan residents could benefit from the subsidies, which will go to seniors with an annual income of $17,820 or less for an individual, or $24,030 or less for a couple. The deadline to apply is Dec. 15.

Medigap plans help pay for some health expenses not covered by Medicare, the federal health insurance program for senior citizens. The subsidy amounts were developed with the help of experts including nonprofits who support seniors, insurance companies and the state of Michigan, and depends on age and disability.

The subsidies will range from $40 per month for Michiganians ages 65 to 75, to $65 per month for seniors 76 and older. Disabled residents 65 and younger can qualify for subsidies of $125 per month.

The Medigap subsidies were included in 2014 legislation that created the Health Endowment Fund as part of a deal to convert Blue Cross Blue Shield of Michigan from a nonprofit to a mutual liability insurance company. The Blues agreed to finance the endowment with $1.5 billion over 18 years and has donated $210 million so far.

Under the legislation, the endowment has up to five years to spend $120 million on Medigap subsidies. But the endowment decided to grant all of the subsidies in four years, said Terry Gardner, chief operating officer of the Health Endowment Fund.

“We are voluntarily shortening the time period in order to make it more impactful and more substantive for (seniors),” Gardner said Wednesday. “If our projections are right, we’re planning on paying $44 million on Medigap subsidies in 2017.”

Medigap rates will increase in 2017 after having been frozen for several years. The subsidies are meant to ease the transition to higher rates, Gardner said. Medigap rates vary depending on the benefits included in each policy.

The subsidies will be paid directly to insurance carriers, reducing the amount of seniors’ monthly bills. As of this week, Medigap policies are available through Blue Cross Blue Shield of Michigan and its Blue Care Network, Priority Health and United Health Care/AARP.

Health Endowment Fund CEO Paul Hillegonds said the subsidies are “part of our commitment to help low-income seniors and Michigan residents with disabilities afford the health care coverage they need. We encourage all eligible applicants to apply.”

For more information and to apply, visit michiganmedigapsubsidy.com. Individuals can also call toll-free to 866-824-9772, Monday through Friday from 8 a.m. to 6 p.m.

KBouffard@detroitnews.com