First lets start off with the basics of what is Medicare and what does it cover Covers.
For specific information please visit Medicare's Official Website at www.medicare.gov
Medicare is the health insurance program for people over the age of 65. People under the age of 65 can qualify for the Medicare program with certain disabilities, and any age with End-Stage Renal Disease (ESRD -permanent kidney failure requiring dialysis or a kidney transplant).
The four parts of Medicare
- Part A (Hospital Insurance) - Helps cover inpatient care in hospitals, skilled nursing facilities, hospice care, and some limited home health care.
- In 2009 you have a one time deductible of $1068.
- Part B (Medical Insurance) - Helps cover medically necessary services such as your doctor's services, outpatient care, and other approved medical services not covered under Part A.
- In 2009 you have a one time deductible of $135
- Part C (Medicare Advantage Plans) - Medicare Advantage Plans are a replacement of your original Medicare Part A & Part B. Medicare pays private health insurance companies to "Manage" your health care. Many of the Advantage plans come in the form of a HMO or PPO. These programs are required to provide the same coverage that the original Medicare Part A & Part B provide. Some plans even have coverage for Part D which you will read about next. (check out our blog for the news about current legislation affecting the Advantage programs)
- Part D (Medicare prescription drug coverage) - Helps cover prescription drug costs. If you are in the original Medicare program you may purchase a Part D plan from private insurers to help reduce your cost further. If you are enrolled in Medicare Part C, depending on which type of plan you have, may or may not allow you to purchase Part D. Check with your agent or call Medicare to verify your options.
What is a Medicare supplement policy?
A Medicare supplement policy is a health insurance plan sold by a private insurance company to fill the gaps in coverage from the original Medicare Part A & Part B. Sometimes called a Medigap policy. These plans will help you pay your share of the costs (coinsurance, co-payments, or deductibles) associated with Medicare-covered services.
*You will need to qualify for Medicare Part A and Part B from above.
There are different Medicare supplement policies.
Insurance companies can sell you only a "standardized" Medicare supplement policy. These policies are identified by letters (Plans A through L). Plans F and J also come in a high-deductible version. By law each type of Medicare supplement policy offers the same basic benefits, no matter which insurance company sells it. For example Plan G with company 1 has the exact same coverage as Plan G with company 2. The only difference between Medigap policies sold by different insurance companies is the cost.
What doesn't a Medicare supplement policy cover?
They don't cover long-term care (like care in a nursing home), vision or dental care, hearing aids, eyeglasses, and private-duty nursing. Please see www.medicare.gov for information on approved services.
Any new Medicare supplement policy issued today is guaranteed renewable.
This means the insurance company can not cancel your policy as long as you pay the premium.
Prescription Drug Coverage
Although some Medicare supplement policies sold in the past covered prescription drugs, no new Medicare supplement policies are allowed to include prescription drug coverage as of 2005. If you want prescription drug coverage, you may want to join a Medicare Prescription Drug Plan (Part D) offered by private companies approved by Medicare.
When is the Best Time to buy a Medicare Supplement Policy?
Open Enrollment is the period that lasts for 6 months and begins on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B. During this period, an insurance company can't use medical underwriting. They can't refuse to sell you any Medicare supplement policy it sells. They generally can't make you wait for coverage to start. Finally, they can't charge you more for a Medicare supplement policy because of you health problems.
How do insurance companies set prices for Medicare supplement policies?
This is one of the most important factors that you need to know about if you plan on living with your Medicare Supplement plan for more than four or five years!
- ISSUE AGE - (Your Best Option, but Not offered by many companies) The company will not raise your premium just because you are getting older. Your premium will always be based on your age when you purchased the policy, but it will be adjusted for other factors. If you buy a plan at age 65, you will always pay the current premiums charged to 65-year-old customers. For example, if you buy the policy at age 65, when you turn 70, you would still pay the same current rate 65-year-olds are paying. Issue age policies can be more costly up front but also can save money in the long run.
- Attained age - (offered by most companies) The premium will increase as you get older. If you buy a plan at age 65, you will have a premium increase each year just because you got one year older along with increases for other factors such as inflation and medical costs. For example, if you buy at age 65, when you are 70, you will pay whatever the company charges 70-year-olds.
*Just because you purchase the a policy from the company with the lowest rate when you become eligible, does not mean it is the best option for the long run. An agent who cares about your needs will explain how this works and get you in a plan that will be good for you for the long term, not the plan that is good for his pockets right now. Find an agent who you can trust and is accredited by the Better Business Bureau.
- Community Age - The premium will be the same for all persons with that plan no matter what your age is. If you buy a plan at age 65, you will pay the same premium that a 85 year old will pay. It does not matter what your age is, everyone pays the same rate for the same plan.
*Can be good or bad, depending on your age and the age of the majority of the policy holders for that plan. For example, if you are 65 and that plan has a majority of customers who are 75 or older, then your rate will be higher.
Can the cost of my Medicare supplement policy vary?
Yes, the cost of your Medicare supplement policy may also depend on if the insurance company
- offers discounts (such as discounts for females, non-smokers, or people who are married, the zip code you live in; discounts for paying annually; or discounts for paying your premiums using electronic funds transfer).
- uses medical underwriting, or applies a different premium when you don't have a guaranteed issue right.
- sells Medicare SELECT policies. If you buy this type of Medicare supplement policy, your premium may be less.
- offers a "high-deductible option" on Medicare supplement plans F and J. If you buy a Medicare supplement Plan F or J high-deductible option, you must pay the deductible before the Medicare supplement policy pays anything. You must also pay a separate deductible for foreign travel emergency.
- You also have the potential for yearly increases to compensate for increases in medical expenses and inflation.
Do you still have questions?
This is not an exhaustive list of answers, but it does cover many of the questions I am often asked. You can always look-up the information at www.medicare.gov or contact your social security office.
Our website: www.medicaresupplementdirect.com includes a lot of tips and facts along with our current medicare news blog.
Our website: www.medicaresupplementdirect.com includes a lot of tips and facts along with our current medicare news blog.
Of course, if you live in Missouri, Kansas, or Iowa and need help, you can contact me here.
All the best to you,
Travis M. Gensler
Missouri, Kansas, & Iowa Medicare Supplement Specialist
Missouri, Kansas, & Iowa Medicare Supplement Specialist
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