By Raymond C. Richard, the President and Chief Executive Officer of The Pinnacle Benefits Group, a national distributor of health and life insurance products.
Medigap policies, commonly referred to as Medicare Supplement Insurance, is private insurance designed to help fill the gaps in Medicare Part A (Hospital Coverage, Skilled Nursing Facility, Hospice and Home Health Care), and Part B (Doctors Services, Outpatient Care and some Preventive Services).
In July of 2009, Congress passed the Medicare Improvements for Patients and Providers Act of 2008. Provisions in the bill included some changes to Medicare Supplement plans. The new Medicare Supplement plans effective June 1, 2010, are commonly referred to as “modernized” plans. Those plans issued before June 1, 2010, are called “standardized” plans. The good news is that if you are happy with your “standardized” plan coverage and premium you can keep it.
Some of the important changes that are part of the new “modernized” plans are:
• Plans No Longer Offered
Plans E, H, I and J are no longer available after June 1, 2010; however, if you already have one of those plans, then you can keep the plan and the benefits do not change. These plans were eliminated from future selection as they were redundant of some of the plans that were kept.
• Plans That Have Changed
Plans D and G bought after June 1, 2010, have different benefits from those purchased prior to June 1, 2010. Plan D adds Hospice coverage, but the At-Home Recovery benefit is eliminated. Plan G covers 100% of Excess Physician and adds Hospice coverage but removes the At-Home Recovery benefit.
• New Plans Offered
Plans M and N are new-plan choices. Each typically offers a lower premium rate in exchange for a higher cost-sharing. Plan M only covers 50% of the Part A deductible. Plan N requires copayments of $20 per doctor office visit and $50 for each trip to the emergency room but covers 100% of Part B coinsurance afterward.
• Part B Coinsurance
All Medicare Supplement plans cover 100% of the Part B coinsurance with the exception of Plans K, L and N which require you to pay a portion of Part B coinsurance and copayments.
• Hospice Care
Now included with all modernized plans is coverage for Hospice Part A coinsurance (outpatient prescription drug and inpatient respite-care coinsurance). Plan K will cover care at 50% and Plan L will cover at 75%. All other plans cover 100%.
• At-home Recovery
This coverage was eliminated from all modernized plans.
If you don’t have a Medicare Supplement plan, there are situations whereby you are guaranteed coverage. If you already have a Medicare Supplement and wish to switch to another plan, your acceptance is not always guaranteed. You should never drop existing coverage prior to being accepted by another plan.
A state-licensed insurance agent can assist you in finding the right coverage at an affordable premium. In North Carolina, unlike most other states, agents who market Medicare Supplement plans are required to have a specific Medicare Supplement license.
Medicare Supplement Insurance can provide you with financial security and peace of mind when an unexpected illness or accident occurs. It’s always a sound practice to review your health insurance coverage at least once every several years to make sure your coverage is appropriate and you are up-to-date on the latest coverage available.