Does Obamacare Really Ban Medigap?

RumorThere is a rumor circulating that Obamacare will ban Medigap.  That is a politically motivated rumor designed to scare senior citizens on Medicare.

In this post I want to try to share the facts about Medigap for people who are not blinded with political hatred.


The Patient’s Protection and Affordable Care Act, a.k.a. Obamacare, made some pretty drastic changes to the Medicare Advantage plan.  However, it does not even mention Medigap.

Medigap and Advantage are two completely different programs.  Advantage allows you to replace Original Medicare.  Rather than allowing the federal government to manage your health insurance, Advantage allows you to use a private health insurance company.

Medigap, on the other hand, only supplements Original Medicare.  The federal government still manages your health insurance claims if you are on Medicare but you are paying a private health insurance company to handle some, or all, of the bills that Medicare does not pay.


Last spring a compromise was reached between the Democratic Senate and the Republican House of Representatives.  It gave permission for a temporary increase in the amount of money that the government could borrow for social programs.

That permission was conditional.  The condition was that if congress was unable to reach a permanent solution, an automatic decrease in federal spending would go into effect on January 1, 2013.  The term that has been used for those cuts is, “Sequestration.”

The “Fiscal Cliff” that has been the topic of so many news reports is a combination of two things happening at the same time.

  1. The tax cuts that President Bush authorized in 2002 will expire on January 1, 2013.  If congress and the president do not reach a “Grand Bargain” by December 31, the U.S. Tax Code will revert back to what it was in 2001.
  2. “Sequestration” will cause an automatic decrease in funding for all federal programs.  Medicare would get a 2% decrease in federal money.  It may not sound like much but that is several billions of dollars.

As part of the “Grand Bargain” congress is looking at changing how Medigap will operate in the future.  However, the rumor that Medigap will be banned is false.

Also, the part of the rumor that Medigap is banned by Obamacare that blames Obamacare is false.  People who are spreading that rumor do not understand how the U.S. government works.

Obama is not the only person who is to blame for Obamacare.  Before Obama signed it into law, the PPACA was approved by 60 senators and 218 representatives in the 111th congress.

The changes to Medicare and Medigap are being considered by the 113th congress.  They may, or may not, become the template upon which Medicare is built.  However, one thing is for certain.

If Medigap is changed, it will not be the result of Obamacare.  It will be because president Obama authorized a different legislation.

Question 4