Medicare Supplement Plans

What Are Medicare Supplement Plans?

Traditional Medicare (Part A and B) does not provide 100% coverage for medical expenses such as deductibles, co-payments, and co-insurance. Therefore Medicare Supplement Plans were designed to help pay the costs that Medicare does not cover. Medicare Supplement Plans are also referred to as Medigap.

Medicare Supplement Plans add additional health care insurance coverage provided by private insurance companies to cover the gaps in the traditional Medicare Plan. Medigap policies are regulated by Federal and State Laws in order to protect you as a consumer. Medigap policies have to be clearly labeled as Medicare Supplement Insurance, and the policies are standardized for each State.

Medicare pays the private insurance company a set amount of money for each person who enrolls in their plan. The insurance company then pays the medical bills for the enrollee. The enrollee is responsible for co-payments as described in each plan’s summary of benefits.

Medicare Supplement Plans (Medigap) A through L And The New Plans M And N

Medicare Supplement Plans A through J

Plans A through J have more benefits, higher premiums, and lower out-of-pocket expenses. Basic benefits include Medicare Part A and B co-payment or co-insurance, and three pints of blood. Extra benefits may include Skilled Nursing Facility co-insurance, Medicare Part A and B deductibles, Medicare Part B excess charges, foreign travel emergency services, at-home recovery, preventive care, and some may still cover prescription drugs.

Attention: The benefits in any Medicare Supplement Plan A through L are the same for any insurance company, but the rate insurance companies charge for their plans may vary. When selecting a Medicare Supplement Plan, carefully compare each plan and compare different insurer quotes.

Medicare Supplement Plans K through L

Medicare Supplement Plans K through L have lower premiums and higher out-of-pocket expenses. Basic benefits include Medicare Part A hospital benefits, Medical Part A and B co-insurance or co-pay, blood, and hospice care. Extra benefits include Skilled Nursing Facility co-insurance and Medicare Part A deductibles.

Attention: When selecting a Medigap plan, carefully compare each plan and compare different insurer quotes. Make sure you have adequate coverage that meets your needs, but you don’t want to pay more as the benefits of each plan are the same for every insurance company.

What Is New In 2010 For Medicare Supplement Plans?

Starting June 1, 2010, the types of Medigap Plans that you can buy will change:

There will be two new Medicare Supplemental Plans offered: Plans M and N. The Plans E, H, I, and J will no longer be available to buy.

If you already have bought Plan E, H, I, or J before June 1, 2010, you can keep that plan.

Contact your plan provider for more information.

If you shop for a new plan, be aware that insurance companies may charge different premiums for exactly the same Medicare Supplement plan coverage. Before you enroll in a Medigap policy, be sure to compare policies from different providers, e.g. compare Plan A from one company with Plan A from another company.

Can I switch to a different Medicare Supplement Plan (Medigap)?

In most cases, you won’t have a right under Federal law to switch Medicare Supplement plans, unless you are within your 6-month Medigap open enrollment period or are eligible under a specific circumstance for guaranteed issue rights.

But, if your state has more generous requirements, or the provider is willing to sell you a Medicare Supplement Plan, make sure you compare benefits and premiums before switching. If you bought your Medicare Supplement plan before 1992, it may offer coverage that isn’t available in a newer Medigap policy. On the other hand, older Medigap plans might not be guaranteed renewable and might have bigger premium increases than newer standardized Medicare Supplemental plans currently being sold.

If you decide to switch, don’t cancel your current plan until you have decided to keep the new one. On the application for the new plan, you will have to promise that you will cancel your first Medicare Supplement Plan. You have 30 days to decide if you want to keep the new plan. This is called your ‘free look’ period. The 30-day free look period starts when you get your new Medicare Supplement Plan. You will need to pay both premiums for a month.

Can I keep my current Medicare Supplemental Insurance or switch to a different Medigap policy if I move out-of-state?

You can keep your current Medicare Supplemental Insurance Plan (Medigap policy) regardless of where you live as long as you are still in Original Medicare.

How Do I Cancel My Medicare Supplement Plan (Medigap Policy)?

If you decide to drop your entire Medicare Supplement Plan policy, you need to be careful about the timing. For example, you may want a completely different Medigap policy (not just your old one without the prescription drug coverage), or you might decide to switch to a Medicare Advantage Plan (like an HMO or PPO) that offers prescription drugs.

You can join a Medicare Advantage Plan between November 15 through December 31 each year.

If you drop your entire Medicare Supplement Plan (Medigap policy) and the prescription drug coverage wasn’t creditable or you go more than 63 days before your new Medicare coverage begins, you will have to pay a late enrollment penalty.

What Is New For Medicare Advantage Plans, Supplemental Plans And Part B In 2010?

Due to the latest Health Care Reform there will be quite a few changes for Medicare Supplemental Plans and Medicare Advantage Plans in 2010.

The good news is that experts expect the new Medicare Supplement Plans N and Plan M to provide a real savings for consumers, and even with many private carriers withdrawing Advantage policies, Medicare beneficiaries will on average be able to choose from more than 30 Medicare Advantage plans in 2010.

You can read all about the most important changes to Medicare in 2010 on the following pages:

Changes To Medicare Advantage Plans In 2010

Changes To Medicare Supplement Plans In 2010

Medicare Part B Rates For 2010

How Will The Health Care Reform 2010 Affect Medicare Advantage Plans 2010 and Medicare Supplemental Insurance?

When the final health care bill will be passed, there will be changes to Medicare that affect seniors and Medicare beneficiaries in 2010. Both the Senate and House bills include provisions to help people who fall into the so-called ‘donut hole’ in their Part D Prescription drug coverage. The Part D initial coverage limit would be raised by $500 for 2010 thus allowing seniors to stay out of the donut hole longer. The initial coverage limit would be raised each year until 2019.

The bills also require that drug companies discount their drugs by 50% for those Medicare beneficiaries who are in the donut hole. If a company doesn’t agree to this discount, they would not be allowed to sell their drugs through Part D prescription plans.

It currently looks like all involved parties to the reform are agreeing upon this issue, so most likely this will go into effect in the final health reform bill.

Other planed Medicare-related changes in House and Senate bills:

• Eliminate The Open Enrollment Period from January 1st to March 31st from 2011 on.If this is approved, Medicare beneficiaries will have only get one opportunity to change their Medicare coverage during the Annual Election Period from November 1 to December 15 of each year.
• Payment cuts to Medicare Advantage carriers in 2011

Around 5% in cuts compared to 2010 are expected and will most likely be passed on to those enrolled in the plans. So it is to be expected that there will be no or very few ‘zero premium’ Advantage plans found in 2011.

Even when the premiums go up like most other costs of living, those enrolled in either a Medicare Supplemental Insurance or a Medicare Advantage Plan will always benefit from better health care coverage than those that only rely on Traditional Medicare alone.

What Is New For Medicare Suplemental Insurance Plans In 2010?

While Medicare Supplement plans have been standardized since 1992 and have seen few monumental changes since then, there will be significant changes for Medicare Supplemental Insurance Plans in 2010.

In June 2010 two new additional plans, Plan M and Plan N will be put into effect, and four currently existing plans, Plan E, H, I and J will be eliminated. Medicare Supplement plans M and N will have similar benefits to Medicare Supplemental Insurance plan D. The purpose of these changes is to reduce the cost of premiums and other associated expenses with an enrollment in Medigap policies.

In addition, all Medicare Supplement plans will be stripped of their Preventative Care benefit and At-Home-Recovery benefits. Medicare has deemed these two benefits unnecessary in the current Medicare structure. In addition to these changes, a Hospice Care benefit co-insurance coverage will be added to all new Medicare Supplemental Insurance policies.

Current Supplement policy holders are allowed to keep their existing Supplemental Insurance (Medigap) policies, however as of June 2010, enrollment will cease into all current plans. Existing Medigap policy holders will be partitioned into one group, and all plans purchased after June 2010 will be segregated into new policy groups.

All plans purchased after June 1st 2010 will be in the new plan policy design. Many Medicare Supplement providers will offer the new plans N and M.

If your plan is being eliminated, you really have no other option than to review and compare the new rules of different coverage options.

So no matter what Medigap policy you currently have, you are advised to review your plan carefully and decide whether to keep your it or switch to a new Supplemental Insurance Plan.

Rates For Medicare Part B In 2010

How Much Is Medicare Part B for 2010?

Most Medicare beneficiaries will continue to pay the same $96.40 Part B premium amount in 2010. Beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint tax filers) will not have an increase in their Part B premium for 2010.

For all others, the standard Medicare Part B monthly premium will be $110.50 in 2010. The Medicare Part B premium is increasing in 2010 due to possible increases in Part B costs. If your income is above $85,000 (single) or $170,000 (married couple), then your Medicare Part B premium may be higher than $110.50 per month.

If you choose to have Part B, the premium is usually taken out of your monthly Social Security, Railroad Retirement, or Civil Service Retirement payment. If you don’t get any of the above payments, Medicare sends you a bill for your Part B premium every 3 months.

Did you know that some Medicare Advantage plans have no additional premium over what you pay for Medicare Part B, but will give you more benefits?

Is There a Medicare Special Enrollment for the Working Aged?

Medicare has multiple special enrollment times for different people and different situations and you have to be aware when your time has come. If you or your spouse was working AND had group health coverage through a current employer or union or you are disabled and working, or you have coverage from a family member there are special enrollment rules. There are a few situations where the special enrollment period applies.

If you are still covered by an employer or union group health plan or through your spouse’s employer you can enroll in the special enrollment period. Or, if you are in the 8 months following the month when the employer or union group health plan coverage ended or when the employment ends. This may be confusing, but a Medicare specialist at your state insurance office should be able to provide guidance.

Talk to your benefits office to help you decide when to enroll in your Part B coverage if you are working and plan to keep your employer’s group health coverage. There are some other things, such as your Medigap coverage, that could be affected if you have made this decision. As with any decision involving your Medicare enrollment you should consult an expert before making any final decisions.

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Is There a Medicare Special Enrollment for the Working Aged?