Substitute Insurance

Every American over the age of 65 is entitled to enroll in Medicare. The program consists of two parts. Part A provides coverage for hospital stays and the majority of seniors are automatically qualified to receive this coverage. Medicare Part B is an optional service that requires the payment of a minimum monthly premium and covers some of the additional costs associated with regular health care, including lab tests, x-rays, doctor visits, and other outpatient services. Almost all Medicare recipients choose to purchase Medicare Part B.

Even with Medicare Part A and B, you will still have medical expenses that are not covered. Like any other health insurance, Medicare has coinsurance and deductible requirements. An additional policy is required for paying for prescription medications. Many seniors choose to purchase supplemental insurance coverage in order to pay these remaining costs.

Medicare supplement insurance is frequently called Medigap coverage as these plans help cover costs that standard Medicare does not pay. Medicare supplemental coverage plans are standardized by the federal government but provided by private insurance companies.

Many private insurance companies sell Medicare supplement policies in every state in the country. With so many different companies selling policies, it’s easy to get confused but there are truly only 10 Medicare plans available.

Medicare Part A and B have already been discussed. There are ten plans that cover the gaps between what original Medicare pays and what doctors and hospitals actually charge, which are designated by letters A through N. Medicare prescription drug coverage plans are those that are called Part D, which is always in their title. Of the plans available that cover the gaps, Medicare F, G and N are the most frequently selected for coverage. This does not mean that you should not consider choosing other supplemental plans that will provide for your own specific health care needs.

All insurance companies that carry Medicare policies are required to offer the same benefits under federal law. Any private insurance company offering a particular Medicare supplemental policy must provide the same coverage as every other company that offers the same plan in a particular state. This administrative policy makes it easier for you to know that the insurance plan you select from any given company offers comparable coverage to all other plans available.

Once you understand the coverage of each of the 10 standard Medicare plans available, you’ll have a good base knowledge from which to work. Now you just need to determine which of the supplemental plans may be right for you according to your specific health needs. Your state Department of Insurance has information on the different Medicare plans. The Federal Centers for Medicare and Medicaid Services also provides you with a good overview of the Medicare plans available.

Keep in mind that not all insurance companies offer all 10 Medicare plans. Purchasing your coverage from the same insurance company as your spouse can actually result in a discount so it may be advisable to select your plans from the same provider. Sometimes it can be less expensive to obtain coverage from multiple providers though so you will want to compare the costs of enrolling in multiple plans with each insurance company before making your final selections.

Online insurance quotes are an easy way to determine the cost of coverage. Many websites now allow you to select the plans in which you’re interested and then give you a listing of companies in your state that provide those plans. This method works well for giving you pricing on insurance plans and also provides details of the coverage for each of the plans.

You should also take into consideration the reputation of the company and the customer service the company provides. Each company will have its strengths and weaknesses, and you want to ensure that you are not only getting the best price possible but the best overall relationships as well. You will invariably need to communicate with your insurance company on occasion which makes their customer service that much more important. Automatic claims processing is another aspect of customer service that you will want to ensure is offered by any company you may choose.

You will want to compare premium costs for each insurance plan. Any deductibles or coinsurance costs should also be considered. You want to ensure that your budget will allow you to pay the ongoing costs associated with the plan before committing to enroll. Less expensive advantage plans will be those that limit coverage according to a specific network of health care providers. Those plans that cover all health care providers carry higher monthly premiums.

You should also find out what the insurance provider’s billing cycle is. Some companies charge premiums on a quarterly cycle; others require monthly payments. The billing cycle should be something that can be worked into your budget and allow you to easily make payments on time.

Some insurance companies also offer value-added services at no additional charge. These services can vary greatly between companies, but you may want to take into consideration the additional benefits when making your final decision. Some benefits are minor, like providing plan participants with free health or wellness-related information. Other benefits can be significant, including discounts on vision or hearing services and products.

Chris Brines is a representative of medicalsupplementshop.com. Our medicare supplemental insurance experts make the process of selecting a good Medicare supplement very easy by offering free advice about the Medicare Supplement plans offered in your area. We compare all Medicare Supplement Plans and prices to make sure you save as much money as possible while still receiving excellent coverage!

Since the Medicare Modernization Act (MMA) has been passed and implemented, and is the law of the land, it is important that you understand the lay of the land if you are on Medicare (or have a family member that is). The MMA created permanent, wide-ranging changes to the kinds of Medicare supplement plans insurance companies can provide after June 1, 2010. Much of it will sound like alphabet soup, but a dozen can be ignored almost completely in any coverage of changes, as four were simply eliminated (E, H, I and J) and eight are essentially unchanged (A, B, C, D, F, G, K and L). That leaves Plan F as the most comprehensive one now, and two new supplement plans (M and N) are lower-cost choices that require some cost sharing by the insured.

As determined by the Centers for Medicare and Medicaid Services (CMMS), the phased-out plans (E, H, I and J) will not even be available for purchase after June 1 of this year, although you can keep the coverage if you are already enrolled and wish to retain it. Alternatively, you can convert your particular supplement plan to another one offered by your insurance company, and many observers believe Plan F is the alternative of first choice (of the insurers, at least). Of course, your situation (or your eligible loved one’s) is unique, and all factors need to be weighed when making these sorts of coverage and feature determinations.

Use a little wisdom

There are several important considerations related to the conversion option and opportunity in the MMA. Whenever your phased-out plan, for instance Plan J, is no longer offered by your insurer, which means no new premiums are coming in from new policyholders. It is not much of a stretch to see how this might become an opportunity for the insurer to get rate hike approvals on renewals for those people who insist on remaining in a discontinued plan.

Another problem may arise when you try to get into a new plan after your conversion opportunity period has passed. In states with open enrollment laws, such as Missouri and California, it would not be a problem, but in other states you might be faced with the entire medical underwriting and examination process. At that time, you could conceivably be denied coverage because of poor health and/or serious pre-existing ailments.

New supplement plans

New Medicare Plans M and N will require increased out of pocket costs for the insured for claims. On the other hand, the monthly premiums will be reduced for these two plans compared to those offering more comprehensive coverage, like Plan F, for example. Plans M and N do not cover the Part B deductible or Part B excess costs in states where it is allowed (which is not all states, of course, as Ohio is one state that forbids it). As far as Part A deductible is concerned, Plan M covers 50% while Plan N covers 100% of it.

Both M and N pay 100% of Part B Coinsurance except for a co-pay of up to a $20 on office visits and $50 for the emergency room for Plan N. Plans K, L, M and N are the plans in the new lineup that most closely mirror the Medicare Advantage package. These plans require increased cost sharing, and cannot be packaged with the Part D prescription drug coverage. Like all Medicare supplements, Part D coverage has to be bought as a standalone option. Should some future health care reform ever limit Medicare Advantage coverage, then Plans K, L, M and N will be the ones most suitable as low-cost alternatives.

Benefit changes, too

Compared to the supplement plans available before June 1, three significant changes have been made to the offered benefits, depending on chosen coverage. With the removal of Plans E, H, I and J, preventative treatment that Medicare does not cover, and at-home recovery benefits, are not available any longer. These plans, and these particular benefits, were phased out because the benefits were limited, hard to administer and not widely selected by consumers. Instead, the CMMS added a Part A hospice co-insurance benefit as a core component in each new plan.

Insurers have not all been approved to sell the new supplemental plans in the states where they are doing business. One of the hoped-for advantages of the MMA is lower monthly cost for people choosing to convert, as well as people healthy enough to get underwritten for new coverage. Time, of course, will tell.

Chris Brines is a representative of medicalsupplementshop.com. Our medicare supplemental insurance experts make the process of selecting a good Medicare supplement very easy by offering free advice about the Medicare Supplement plans offered in your area. We compare all Medicare Supplement Plans and prices to make sure you save as much money as possible while still receiving excellent coverage!