Medicare Supplement

Medicare is a health insurance program for:
· People age 65 or older.
· People under age 65 with certain disabilities.
· People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or kidney transplant).

Medicare doesn’t pay for everything. Should you face a serious illness or a hospital stay, those unpaid expenses come out of your pocket. And, we all know how the cost of medical care is rising every day.

Fortunately, there’s a solution. Medicare Supplement Insurance plans help pay the bills that Medicare doesn’t. When you are insured by a Medigap plan you’ll enjoy the comfort and peace of mind that comes from knowing you’ve taken steps to help protect your savings.

A Medigap policy is a health insurance policy sold by private insurance companies to fill the “gaps” in your Medicare plan. If you have Medicare and have a Medigap policy, then Medicare will pay its share and your Medigap policy will pay its share of your health care costs.

Currently, there are ten standardized Medigap plans called “A” through “J”. Medigap policies must follow Federal and State Laws. Each plan, A through J, has a different set of benefits. Plan A covers on the basic (core) benefits, and are included in al the Medicare plans (A through J). Medigap Plans B through J offer extra benefits with Plan J offering the most benefits.

Insurance companies can only sell you one of the ten standardized Medigap policies. Medigap policies are standardized so you can compare them easily. Two of the standardized policies may have a high deductible option. No matter where you live (except for Massachusetts, Minnesota, and Wisconsin) Medigap policies must offer the same benefits within Medigap plans (A through J).

It is important to compare Medigap policies because even though the benefits are the same costs can vary. Also, insurance companies that sell Medigap policies don’t have to offer each Medigap plan (A through J). Each company decides which Medigap policies they want to sell. Make sure the insurance company offers the Medigap policy that you want.

Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium of $66.60 (in 2004) to Medicare. In addition, you will have to pay a premium to the Medigap insurance company. As long as you pay the premium, your Medigap policy is guaranteed renewable. This means it is automatically renewed each year. Your coverage will continue year after year as long as you pay your premiums.
You and your spouse must buy separate Medigap policies. Your Medigap policy won’t cover any health care costs for your spouse.

Important. In some States, insurance companies may refuse to renew a Medigap policy bought before 1990. At the same time these Medigap policies were sold, State law might not have required that Medigap policies be guaranteed renewable.

Medigap policies only help pay health care cost if yo have the Original Medicare Plan. You don’t need to buy a Medigap policy if you are in a Medicare Advantage Plan (like a Medicare Managed Care Plan). In fact, it is illegal for anyone to sell you a Medigap policy if they know you are in one of these plans.

It is also illegal for an insurance company to sell you a Medigap policy if you have health insurance coverage through your State Medicaid program. (There are certain exceptions).

To buy a Medigap policy, you generally must have Medicare Part A and Part B. If you are under age 65 and you are disabled or have End-Stage Renal Disease (ESRD), you might not be able to buy a Medigap policy until you turn 65,

In most cases, if you are in the Original Medicare Plan and you have a Medigap policy, you can go to any doctor, hospital, or other health care provider who accepts Medicare. However, if you have the type of Medigap policy called Medicare SELECT, you must use specific hospitals and, in come cases, specific doctors to get your full insurance benefits.

Medicare SELECT is a type of Medigap policy sold in some States. If you buy a Medicare SELECT policy, you are buying one of the ten standardized Medigap Plans A through J. with a Medicare SELECT policy, you must use specific hospitals and, in some cases, specific doctors to get full insurance benefits (except in an emergency). For this reason, Medicare SELECT policies generally cost less than other Medigap policies.

What isn’t covered by Medigap policies?
· Long Term Care,
· Vision or dental care,
· Hearing aids,
· Private-duty nursing, or
· “Unlimited” outpatient prescription drugs

Note: Medigap Plans H, I, and J currently cover some outpatient prescription drugs (see chart below). This will change in 2005.

The cost of Medigap policies can vary widely. There can be big differences in the premiums that insurance companies charge for exactly the same coverage. As you shop for a Medigap policy, be sure you are comparing the same Medigap policy.

To learn more about your Medicare Supplement options and premiums click below.