Medicare Supplement - Medicare Consumer - Medicare Consumer

Medicare Supplement

Medicare Supplement, or Medigap, coverage is only supplemental to what Medicare covers. If you have expenses not covered in the first place by Medicare (such as non-essential cosmetic surgery), your Medicare Supplement policy generally won’t pay for the coinsurance or deductible. Also, as a general rule, Medigap policies do not cover custodial care or long-term nursing home or home care.
* Note: The terms Medicare supplement and Medigap can be used interchangeably.
The law guarantees the availability of Medigap policies to all new Medicare enrollees without any medical examination if you enroll in Medicare Supplement within six months of your 65th birthday. At that time, you cannot be denied a Medicare Supplement policy or charged more for Medigap because of your health. Congress established federal standards for Medicare Supplement policies in 1990. As part of the Omnibus Budget Reconciliation Act, Congress required the National Association of Insurance Commissioners to address the subject of Medicare supplement insurance policies. Specifically, this group’s task was to develop a standardized model Medicare supplement insurance policy that would provide certain “core” benefits, plus as many as nine other policies. These model policies could then be adopted by the states as prototype policies for their insurers to offer as Medicare supplement insurance policies. The intent of this law regarding Medigap was to reduce the number of Medicare Supplement policies being offered for sale. It also was intended to help consumers understand and compare Medicare Supplement insurance policies, thereby helping them make informed buying decisions by:

  • Standardizing Medicare supplement insurance coverage and benefits from one policy to the next;
  • Simplifying the terms used in those Medicare supplement insurance policies;
  • Facilitating Medigap policy comparisons; and
  • Eliminating Medicare supplement insurance policy provisions that could be misleading or confusing.

Medicare supplement, or Medigap insurance is specifically designed to supplement Medicare’s benefits and is regulated by federal and state law. Medicare supplement insurance policies must be clearly identified as Medicare supplement insurance and must provide specific benefits that help fill the gaps in Medicare coverage – thus the name Medigap. Other kinds of insurance may help with out-of-pocket health care costs, but do not qualify as Medicare supplement, or Medigap, insurance plans. Unlike some types of health coverage that restrict where and from whom care can be received, Medigap policies generally pay the same supplemental benefits regardless of the health care provider selected. If Medicare pays for a service, wherever provided, the standard Medicare supplement, or Medigap, policy must pay its regular share of benefits. Although the benefits are identical for all Medicare supplement insurance plans of the same type, premiums can vary a great deal from one Medigap insurer to another and from area to area. For many years, there were 10 standardized Medicare supplement plans. These plans were named Medicare supplement policies A through J, with A being the most basic Medigap core benefits, and J being the most comprehensive plan. Recently, however, additional Medicare supplement plans have been added. These standard Medigap policies can help pay some of your costs in the Original Medicare Plan. If you are in a Medicare Advantage Plan, or Medicare Part C, you do not need a Medicare supplement policy. Prior to June 2010, each standard Medicare supplement plan, labeled A through N, offered a different set of benefits, filled different “gaps” in Medicare coverage, and varied in price. Some insurers offered a “high deductible option” on Medicare supplement plan F and J. For the most part, the basics regarding Medicare supplement policies have remained the same. However, with the June 2010 changes, some of the standard Medicare supplement plans have been eliminated, and new Medicare supplement plans have been introduced.

Medicare Supplement Insurance Plan Benefits:

Every Medicare supplement policy must cover certain basic benefits. These basic benefits are as follows:

For Medicare Part A coverage:

  • Coinsurance for hospital days (certain conditions apply)
  • Cost of 365 more hospital days in your lifetime, once you have used all Medicare hospital policy benefits.

For Medicare Part B coverage:

  • Generally, 20% of doctor bills and fifty percent of mental health services
  • The first three pints of blood

Until recently, the 12 individual Medicare supplement plans, labeled Medicare supplement plans A through L, offered basic benefits, along with various additions, depending on the Medigap plan. However, as of June 2010, additional Medigap policies with the letters M and N have been added. In addition, some of the previously available Medicare supplement insurance plans will no longer be available. Below is a brief summary of what Medicare supplement policies A through L cover. Medigap plans M and N will be discussed following the outline of these Medicare supplement coverages.

Medicare Supplement Insurance Plans:

  • Basic Benefits (described above)
  • Basic Benefits
  • Medicare Part A Hospital Deductible for each benefit period for hospital policy services
  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Home Costs: Your cost ($137.50 in 2010) for days 21-100 in a skilled nursing home
  • Medicare Part B Deductible: Yearly deductible for doctor services ($155.00 in 2010)
  • Foreign Travel Emergency: 1) 80% of the cost of emergency care outside the U.S.; 2) Up to $50,000 during your lifetime; 3). A yearly deductible applies.
  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Home Costs
  • Foreign Travel Emergency
  • At Home Recovery: 1) Help for activities of daily living, such as bathing and dressing, if you are already receiving skilled home care covered by Medicare; 2) Help for up to eight weeks after you no longer need skilled care; 3) will pay a co-payment per visit.
  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Costs
  • Foreign Travel Emergency
  • Preventive Care: For preventive services ordered by your doctor
  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Home Costs
  • Medicare Part B Deductible
  • Medicare Part B Excess Charges: Pays 100% of the difference between your doctor’s charge and the Medicare approved amount, if your doctor does not accept assignment
  • Foreign Travel Emergency

* High Deductible Plan F: Plan F also has an option called High Deductible Plan F. This high deductible plan offers the same benefits as the regular Plan F, but the benefits do not start until after you pay a calendar year deductible. Some of the expenses you will have to pay to satisfy this high deductible include the Medicare deductibles for Parts A and B, but does not include the Plan F Foreign Travel Emergency deductible.

  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Home Costs
  • Medicare Part B Excess Charges: Pays 80% of the difference between your doctor’s charge and the Medicare approved amount, if your doctor does not accept assignment.
  • Foreign Travel Emergency
  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Home Costs
  • Foreign Travel Emergency
  • Prescription Drugs (limits apply)
  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Home Costs
  • Medicare Part B Excess Charges: Pays 100% of the difference between your doctor’s charge and the Medicare approved amount, if your doctor does not accept policy assignment.
  • Foreign Travel Emergency
  • At Home Recovery
  • Prescription Drugs (limits apply)
  • Basic Benefits
  • Medicare Part A Hospital Deductible
  • Skilled Nursing Home Cost
  • Medicare Part B Deductible
  • Medicare Part B Excess Charges: Pays 100% of the difference between your doctor’s charge and the Medicare approved amount, if your doctor does not accept assignment
  • Foreign Travel Emergency
  • At Home Recovery
  • Preventive Care
  • Prescription Drugs (limits apply)

Medicare Supplement Plans K and L:

Medicare supplement plans K and L offer most of the same benefits as the other Medigap insurance plans. However, these Medigap plans provide you with a lower monthly premium. In exchange for a lower premium, these Medigap plans cover less of the co-insurance and co-payments than the other Medicare supplement insurance plans.

Medicare Supplement Plan K:

  • Basic Benefits
  • 50% Hospice out-of-pocket cost sharing
  • 50% of Medicare-eligible expenses for the first three pints of blood
  • 50% Part B co-insurance, except for preventive care services, which are covered 100%
  • 50% coverage for skilled nursing facility co-insurance
  • 50% coverage for your Medicare Part A deductibles
  • $4,620 out-of-pocket annual limit (in 2010)

Medicare Supplement Plan L:

  • Basic Benefits
  • 75% Hospice out-of-pocket cost sharing
  • 75% of Medicare-eligible expenses for the first three pints of blood
  • 75% Part B co-insurance, except for preventive care services, which are covered 100%
  • 75% coverage for Skilled Nursing Facility co-insurance
  • 75% coverage for your Medicare Part A deductibles
  • $2,310 out-of-pocket annual limit

Changes to Medicare Supplement Insurance Starting June 2010

Starting June 1, 2010, the types of Medigap insurance policies available have changed. These changes to Medicare supplement insurance plans include the following:

  • There will be two new Medigap plans offered. These are Medigap plans M and N.
  • Medicare supplement plans E, H, I, and J will no longer be available to buy. If you already have Medigap plans E, H, I, or J or you purchased one of these Medigap plans just before June 1, 2010, you will be able to keep that plan.

Other important changes to Medicare Supplement insurance effective June 1, 2010 include:

  • Basic Benefits. Starting with Medicare supplement policies on or after June 1, 2010, the Medigap Hospice Part A coinsurance will be covered. Medigap Plan K will cover 50% of the costs, and Medigap Plan L will cover 75% of these costs.
  • Part B Coinsurance. Medicare supplement Plans K, L, and N will require that you pay a portion of Medicare Part B coinsurance and copayments, which could result in lower premiums for these Medigap plans. All other Medigap policies pay them at 100%.
  • Medigap Plans D and G. Medigap Plans D and G, effective on or after June 1, 2010, have different benefits than Medigap Plans D and G Plans purchased prior to June 1, 2010.

Insurance companies that offer Medicare supplement insurance are required to make Medigap Plan A available. If they offer any other Medigap plans, they must also offer either Medigap Plan C or Medigap Plan F. However, not all Medigap plans may be available in all states. It is important to determine whether Medicare supplement insurance will really help in various situations. Remember that these Medicare Supplement policies only fill the gaps of those services that Medicare designates to be paid.

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