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Blue Cross Blue Shield Medicare Plans

Medicare can be a great tool for accessing quality healthcare. This kind of medical care is an important part of healthy ageing. While Medicare, by itself, provides quality coverage, there are a number of expenses and benefits that it doesn’t cover. To address these shortcomings, private health insurance companies provide various products designed to help maximize your care and save the most money possible.


Among the insurance companies involved in Medicare few are as well-known or liked as Blue Cross Blue Shield. In this article, we’ll review the history of Blue Cross Blue Shield and also discuss their place in the Medicare and health insurance marketplace today.


A Brief History Of Medicare


Medicare Parts A and B went live in 1966. The program was designed in such a way that the people who used Medicare benefits (known as Beneficiaries) would have to pay for some of the costs for care. This model is known as Fee for Service (FFS). While the fees you typically pay are not large, they can add up. In some years, for certain medical treatments, you can accumulate ruinous medical bills. In response to these threats, private insurance companies have offered a number of coverages designed to help you save money.


History Of Blue Cross Blue Shield


It’s ironic that Blue Cross Blue Shield (BCBS) is so widely known for providing insurance benefits. The reality is that BCBS is not an insurance company at all. BCBS is actually an association, formally known as the Blue Cross Blue Shield Association (BCBSA). The Association licenses the Blue Cross Blue Shield name and logos to various insurance companies. While there are some multi-state BCBS-licensed insurance companies, Blue Cross Blue Shield insurance companies tend to be local to one state. In other words, there is no such thing as Blue Cross Blue Shield Insurance Company with a nationwide presence; most of the BCBS companies are totally independent of each other.


The Blue Cross Association began as a hospital insurance program in the Great Depression. Blue Shield was formed by a group of employers in the Pacific Northwest to provide health insurance to mining and forestry employees.They paid monthly fees to groups of doctors, who agreed to treat the covered employees. These plans were an early form of employer group coverage, something Blue Cross Blue Shield remains famous for today.


As of 2019, all the different Blue Cross Blue Shield insurance companies had a total of over 106 million health insurance members.


Before we dive into how Blue Cross Blue Shield helps people with their Medicare coverage, it’s important to consider why you would want any kind of coverage beyond your basic Part A and B benefits.


As mentioned earlier, Medicare doesn’t cover 100% of the costs you’ll encounter when you use your benefits. Instead, you’ll have to pay for part of the cost out of pocket. You can expect to pay these costs:


  • Part A deductible
  • Part A daily co-insurance for hospital or skilled nursing facility stays
  • Part A co-insurance for hospice care
  • Part B deductible
  • Part B co-insurance (20% of the cost of your Medicare-covered Part B services or procedures)
  • Part B excess charges (up to 15% of the cost of your Part B services and procedures)


In addition to these out of pocket costs, there are other gaps in your Medicare coverage. Original Medicare generally provides no coverage for these services:


  • Prescription drug coverage
  • Emergency coverage outside the United States
  • Dental, routine vision, and hearing


These out of pocket costs and gaps in coverage can leave you exposed to large bills, which can potentially put a strain on your budget and savings. It is because of these facts that the private Medicare options were created.


The three main kinds of private Medicare coverage are:


  • Medicare Supplement (Medigap) Insurance
  • Medicare Advantage Plans (Part C)
  • Prescription Drug Plans (Part D)


Blue Cross Blue Shield is a major player in each of these kinds of private coverage. Let’s review them one at a time.


Blue Cross Blue Shield Medicare Supplement Plans


Medicare Supplement Insurance is the oldest of the three private options. Medicare Supplement, or Medigap, has existed since the beginning of the Medicare program, which began in 1966.


Medigap plans are a coverage you can add-on to your Part A and B benefits.It works with your Original Medicare coverage by paying for some of the costs that you’d normally be expected to pay. There are 47 states where the Medigap plans are standardized; in each of these states, there are ten standard Medigap plans. Blue Cross Blue Shield offers many of the standardized Medigap plans in these states.


Blue Cross Blue Shield doesn’t offer all ten standardized plans in every state (no insurance company does). However, they do offer many of the standardized plans in all of the states. The most popular Medigap Plans tend to be Plans A, F, G, and N.


Blue Cross Blue Shield has a reputation for being widely accepted by doctors and other providers. They also have a reputation of paying claims speedily. If you choose Blue Cross Blue Shield Medicare Supplement Insurance, you can have great confidence that it will be accepted at your providers. If for some reason a provider you use doesn’t take it, you can always submit a claim. As long as the expense is for a Medicare-covered service or procedure that Medicare has already paid the provider for, your plan will reimburse you for the expense.


Blue Cross Blue Shield Medicare Advantage Plans


Blue Cross Blue Shield offers Medicare Advantage Plans, which are also known as Part C plans, throughout the country. While Medicare Supplement Plans are standardized in most of the country, and operate on a national level, Medicare Advantage is a much more location specific type of coverage. Most Medicare Advantage plans are customized to the specific county or zip code in which they are offered. However, there are some state-wide or even regional (multi-state) Medicare Advantage Plans.


Medicare Advantage Plans come in a variety of formats, but the two that are the most popular are:


  • Health Maintenance Organizations (HMO)
  • Preferred Provider Organizations (PPO)


Both of these kinds of plans feature networks of doctors and providers. HMOs are very restrictive: you must only use providers who are in the network. If you see out of network providers, an HMO plan will not pay any benefits, except in emergency or urgently needed situations. While HMOs are more restrictive, they also generally feature lower costs in terms of premiums, co-payments, and deductibles.


PPO plans also have a network, but it’s much more flexible. If you see providers who are in the network (these are the preferred providers), you’ll pay smaller costs for your services. However, you are free to see non-network providers; you’ll pay more in this case, but the plan will still provide coverage. As a general rule, your costs will be slightly higher with a PPO than for an HMO when it comes to monthly premiums, deductibles, co-payments, and out of pocket maximums.


Blue Cross Blue Shield offers both types of plan.


Instead of directly paying part of the costs you’d normally be responsible for, like Medigap coverage, Medicare Advantage plans help you save money by negotiating prices for your care with providers. The plan pays the provider a negotiated amount for your care; you also pay for some of the cost through a co-payment or co-insurance.


Blue Cross Blue Shield Part D Drug Plans


The last type of private coverage is Part D, standalone Prescription Drug Plans. You will likely only have a standalone drug plan if either of these apply to you:


  • You use Original Medicare and add a Medigap plan
  • You use only Original Medicare


In almost all cases, you can’t get a standalone Part D plan if you also have Medicare Advantage coverage. Instead, you should choose a Medicare Advantage Plan that includes drug coverage.


Part D drug plans help you pay for the cost of prescription medications and certain vaccines. The key elements of a Blue Cross Blue Shield Prescription Drug Plan include:


  • Monthly premium
  • Deductible and cost-sharing
  • Drug formulary
  • Pharmacy network


You’ll pay a monthly premium for your standalone Drug Plan. When you use your benefits, you have to use a network pharmacy; if you use a non-network pharmacy, you’ll experience higher costs (you might even have to pay full cost in some cases).


The Drug Formulary is the most important part of any Part D Drug Plan. The formulary lists all the specific medications and vaccines the plan covers. It also specifies a Tier for each covered vaccine and drug. The higher the Tier, the more expensive the medication is.


Most drug plans have an annual deductible. Once you satisfy that, you’ll pay co-payments or co-insurance for each of the prescriptions you fill for the rest of the year. The amount will vary based on what Tier your medications are.


FAQ About Blue Cross Blue Shield


Is Blue Cross Blue Shield a non-profit?


The Blue Cross Blue Shield Association (BCBSA) is a 501(c) public welfare organization, with tax advantages. Some of the individual insurance companies are non-profits, but others are for-profit institutions like other insurance companies.


If I have Blue Cross Blue Shield for my pre-Medicare health insurance coverage, do I automatically get Blue Cross Blue Shield for Medicare?


No. You will have to enroll in the Medicare plan of your choice when you become eligible. You can choose to use Blue Cross Blue Shield if you want to, but it’s not automatic.

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