In 1966, Congress passed, and President Lyndon B. Johnson signed Medicare. Medicare provided health insurance for those over 65 and for those who received a social welfare disability for at least two years. Medicare paid about 70% of the costs of treating the doctor and the hospital of its policyholders. Because only 70% of expenses are reimbursed for expenses, a need arose for an insurance policy to fill this gap: the Medicare supplement, also known as Medigap.
In 1971, Bankers Life introduced the first additional Medicare policy. Bankers Life initially contracted thousands of insurance agents to sell this latest insurance innovation. Politicians were somewhat difficult to understand, and Bankers Life quickly earned a 47% stake in this new insurance sales market.
Other insurers, such as United American, Mutual of Omaha and Colonial Life, received smaller pieces in the market. This lower level of insurers was with independent insurance agents who were paid a percentage of the premium for a period that was usually charged for six years. Bankers Life sells and continues to sell its policy through independent agents and modern customer service, located in Newark, NJ.
The National Association of Insurance Commissioners (NAIC) standardized the policy allowed for sale to consumers in 1981. Plans A to J were created. Plan A is the most basic coverage, and the insurance company must offer this coverage to every customer. Plan J is the most comprehensive coverage that pays all deductibles and co-insurance, even paying up to $ 3,000 a year for pharmaceutical products.
The overwhelming majority of Medicare customers have accepted Plan F, which pays Medicare revenues combined with original Medicare, but does not cover drugs. In fact, Plan F was an astounding 56% of all new sales by the big four additional insurers, Bankers Life, United American, Colonial Life and Mutual of Omaha, in 2005.
In 2004, the United States federal government introduced a drug benefit to Medicare recipients. This billion-dollar government program had two hundred billion dollars plus a price per year. Many observers have commented that this new program was the result of a razor close to the victory of George W. Bush over Al Gore in the 2000 presidential election.
Florida was the state where George W. became the next president, and Florida is home to millions of Medicare beneficiaries. Giving these voters free prescription drugs to President George W. Bush seemed like a good idea to ensure his re-election. President Bush will be re-elected, and the federal budget deficit will begin to rise.
