Medicare Supplement Insurance Can Protect You From Out-Of-Pocket Costs With Medicare

In Washington, there is an ongoing debate regarding Medicare. Millions of seniors and younger people who depend on Medicare due to disability are caught in the middle. In such uncertain times, it’s important to avoid more out-of-pocket expenses and retain your savings to be prepared for changes in Medicare benefits.

That requires understanding what the government’s Medicare now covers. Medicare is divided into four categories of benefits: Part A, Part B, Part C and Part D. Part A covers hospital stays, home health care and hospice care. Part B handles doctor’s services and laboratory tests. Part C refers to Medicare Advantage Plans that can replace the government provided Original Medicare by including the benefits of Part A and B along with coverage for prescriptions. If you don’t have this Part C prescription coverage, you may be interested in Part D, which only covers prescription drugs.

Basically when you get one of the Medicare Advantage Plans, you are substituting private insurance for Original Medicare. These private plans must comply with Medicare’s rules, though, so they provide all the coverage available through Medicare and then some. They usually provide drug coverage (but not all plans cover all medicines), and often add dental and vision services. However such plans are not universally available. If one of these plans is available where you live, it may offer the best rates and these plans accept applications regardless of any pre-existing condition except for ESRD (End Stage Renal Disease).

In addition to all four Medicare options, there’s an alternative known as Medicare Supplemental Insurance that fills in gaps in Original Medicare. These Medigap Plans cover services that Medicare doesn’t. For example, a Medigap Plan can pay for the 20 percent of every doctor bill that Medicare beneficiaries must cover. With 10 different types of Medigap Insurance, you can hand pick the benefits you’re most likely to need.

Medigap Plans are distinguished by letters, such as Plan A, Plan B, etc. Medigap Plan F offers the most comprehensive coverage, but as with other kinds of insurance, expanded coverage comes at a price. Plan F has been the most popular, but Plan G may be a more cost effective solution this year.

That’s because preventive services are now fully covered through Original Medicare. You’ll no longer need to pay for 20 percent of a doctor’s fee for an annual check-up, flu shots and certain screening procedures that can detect common forms of cancer, diabetes, high blood pressure, heart disease, etc. Medigap Plan G has all of the benefits of Plan F with one exception. It doesn’t reimburse you for Medicare’s Part B deductible on doctor services.

Now that you no longer need to meet that Part B deductible before preventive services are covered, it may not be cost effective to pay higher premiums to get that reimbursement. It depends on your medical history. If you habitually need to see a doctor for something that wouldn’t be covered as a preventive service, Medigap Plan F may still save you money. If all you usually need falls under the category of 100-percent covered preventive care, paying higher premiums wouldn’t make sense because you wouldn’t have to meet the Part B deductible. In that case, you couldn’t collect on the benefit and be reimbursed for having to meet that deductible.

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Medicare and Medicare Advantage Update 2010

Q. What are the changes to Medicare in 2010?

A. Medicare is made up of three parts: Hospital Insurance (Part A), Medical Insurance (Part B), and Drug (RX) Insurance (Part D). Part A Deductible for 2010 is $1,100 for a hospital stay of 1 – 60 days, $275 per day for 61-90 days, and $550 day for 91-150 days of a hospital stay (lifetime reserve days). After 150 days, you pay all costs for the hospital. Part A also includes Skilled nursing facility and some home health care but not long term care. Skilled nursing facilities is subject to a $137.50 per day co-insurance for days 21-100. Part B covers Medicare eligible physician services, outpatient hospital services and certain home health services and durable medical equipment. You pay 20% of the Medicare-approved amount after you meet the $155 deductible.

Part D coverage is for both short and long-term prescription needs not given in the hospital, coverage for both brand name and generic drugs and can differ dramatically from one company to the other. Part D is not deducted from your Social Security check.

Q. Can you explain the difference between a Deductible, co-pay(ment) and out of pocket.

A. The deductible is the amount you must pay for health care before Medicare begins to pay. These amounts can change every year. A co-payment is a partial cost you will spend to see the doctor. These can be zero or more. These are out of pocket which are costs that you must pay on your own because they are not covered by Medicare.

Q. What are the differences in HMO, PPO, PFFS, SNP and MSA plans?

A. Health Maintenance Organizations (HMO)- Just like the private sector, HMO is a group of doctors, hospitals and other care providers that agree to give health care to Medicare beneficiaries for a set amount of money from Medicare every month. You get your care from the provider in the plan.

Preferred Provider Organization (PPO)- Doctors, hospitals and providers that belong to the network and with most PPO plans, you can use doctors, hospitals and providers outside the network for an additional cost.

Private Fee for Service (PFFS)- These are sometimes referred to as regional PFFS since the doctor or hospital accepts payments from the insurance plan rather than Medicare. The Insurance plan decides how much it will pay and what you pay for the services you get. You may pay more or less for Medicare covered benefits.

Special Needs Plan (SNP) – A type of plan for people with chronic illnesses or conditions with special needs.

Medical Savings Plans (MSA) – A type of savings plan for those people who do not go to the doctor often but need a savings plan to pay some of the costs of the deductibles and co-payments.

Q. My Doctor takes Blue Cross but he does not take Medicare Advantage Blue Cross. What does that mean?

A. Medicare Advantage plans are a hybrid of coverage offered from an insurance company. When you are eligible for Medicare at age 65, you select Part C–Medical Insurance offered by a company. You still pay your premiums out of your social security check for Part B but the government pays the insurance company to administrate the benefits. These Medicare Advantage Plans appear to have many benefits and include Drug coverage (Part D). Medicare Advantage plans are the best of both worlds but they have some drawbacks. If your doctor is not a Medicare Advantage plan doctor, you will pay additional costs to see him/her but with most plans you can see another doctor (usually not available with HMO plan). You will be subject to separate deductibles and separate co-payments and often need a referral for approval before you can get care from the specialist. If you do not get a referral, the plan may not pay for your care.

Q. Since Medicare Advantage provides all Medicare health care through that plan, what if I don’t like it? I have heard Doctors payments will be cut and the company I sign up with may stop insuring them. What protection do I have?

A. Since Medicare is a government provided plan for those 65 and older, you have many options for coverage. Every November 15 through December 31 you can switch from one Medicare Option to another–you can enroll in any Medicare Advantage or Part D at this time. This is called the Annual Enrollment Period. (AEP) Your new coverage would begin on January 1. From January 1 to March 31 Medicare members can make ONE plan change to a like kind. For example, you can change to another MA plan. The member CANNOT change Part D coverage during this time unless they have it with the plan they are leaving. This is called Open Enrollment Period (OEP). During Special Enrollment Period (SEP), members must enroll within 63 days of a special event. This is if you move outside the service area, move into or out of a long term care facility, loose credible prescription drug coverage, return to the US from another country or get assistance from the state in which you live, loose coverage under an employer or union either voluntarily or involuntarily.

Q. What other benefits do I get with a Medicare Advantage Plan?

A. You may get extra benefits by selecting a Medicare Advantage Plan. These may include vision, hearing, dental and/or health and wellness program including membership to a specific gym. Because you do not need to buy a Medigap or Medicare Supplement policy, the premium are supplemented by the government and are less expensive than a traditional supplemental plan.

Q. I hear there are many gaps in the Part D (Drug) coverage and I take 5 prescriptions a day. How do I get most of my drugs covered?

A. Every insurance company that offers Part D coverage has a written list of drugs. These include generic and brand name drugs. (Check the web sites or ask your agent for a printed formulary drug book.) Your plan may have several tiers and your co-payment amount depends on which “TIER” your drug is listed. Not all brand names will be covered and these can be very expensive if you have a high copayment or it is not listed. Always ask your doctor whether the drugs prescribed are available as generic. Be sure to ask your doctor whether you can split a high-dose version of the prescribed drugs as

they are often the same price as low-dose version or go to to compare drug plans in California.

Q. I like what I see–a policy issued by a leading insurance company that does not cost me the same as a Medigap or Medicare Supplement. Why should I buy a Medicare Supplement instead of a Medicare Advantage Policy?

A. That is a good question. If you can afford the individual premiums for a Medicare Supplement with a separate part D, you should do that. You can choose you own doctor as long as that doctor takes Medicare patients. Today many plans are a hybrid and some cost ZERO monthly premium and include a RX plans are also a PPO so people have the freedom of a PPO. As Seniors age, options and benefits become very important and we are here to help you decide which plan is best for you. Be confident in your Medicare Choices.

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