Medigap (Medicare Supplement Insurance)

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Medigap (Medicare Supplement Insurance)

• Module 3

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Medigap Basics
Lesson 1 Medigap Basics Lesson 2 Medigap in
Detail

• Module 3Lesson 1

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs

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What Is Medigap?
Overview

• Health insurance policies
• Sold by private insurance companies
• Cover gaps in Original Medicare
• Follow Federal and state laws that protect you
• Must say Medicare Supplement Insurance

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What Is Medigap?(continued)
Overview

• Health insurance policies
• 12 standardized policies in most states
• Plans A L
• Non-standard policies
• Massachusetts
• Minnesota
• Wisconsin
• Costs may vary
• By plan
• By company
• Where you live

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How Medigap Works
Overview

• Only works with Original Medicare
• Don't need Medigap policy in
• Medicare Advantage Plan
• Other Medicare plans
• Can go to any doctor, hospital, or provider that
  accepts Medicare
• Unless you have Medigap SELECT policy

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Medigap Is Not
Overview

• Medicare Advantage Plans
• Medicare Part B
• Medicare Prescription Drug Plans
• Medicaid
• Employer or union plan
• TRICARE
• Veterans benefits

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Who Can Buy Medigap?
Overview

• Must have Medicare Parts A and B
• May not be able to buy Medigap under 65
• People with a disability
• People with End-Stage Renal Disease
• Guaranteed right to buy a Medigap policy
• In your Medigap open enrollment period
• Covered under a Medigap protection

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs

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Why Buy Medigap?
Medigap Benefits

• Original Medicare does not pay all costs
• Medigap policy may help you
• Lower your out-of-pocket costs
• Get more health insurance coverage

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Gaps in Original Medicare
Medigap Benefits
What you pay in 2008Part A

• Hospital Stays
• Skilled Nursing
• Blood

• 1,024 deductible for days 1 60
• 256 per day for days 61 90
• 512 per day for days 91 150
• 0 for first 20 days
• 128 per day for days 21 100
• 100 after day 100
• 100 for first 3 pints
• 20 for additional pints

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Gaps in Original Medicare
Medigap Benefits
What you pay in 2008Part A

• Home Health Care
• Hospice Care

• 0 for home health care services
• 20 for durable medical equipment
• Up to 5 copayments for outpatient prescription
  drugs
• 5 for inpatient respite care
• Room and board, in some cases

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Gaps in Original Medicare
Medigap Benefits
What you pay in 2008Part B

• Part B Deductible
• Part B Services

• 135 per year
• 20 coinsurance for most covered services
• 50 coinsurance for outpatient mental health
• Copayments for hospital outpatient services

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Medigap Coverage
Medigap Benefits

• Plans A J
• All cover basic benefits
• Part A coinsurance for inpatient hospital care
• Cost of 365 extra days of inpatient hospital
  care
• Part B coinsurance after deductible
• First 3 pints of blood each year
• Some plans cover more

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Other Medigap Benefits
Medigap Benefits

• Most plans have extra benefits
• Some Medigap policies cover
• Part A deductible
• Part B deductible
• At-home recovery
• Medicare Part B excess charges
• Subject to the limiting charge
• Other services

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Medigap Plans K L
Medigap Benefits

• Basic benefits
• Part A coinsurance for inpatient hospital care
• Cost of 365 extra days of inpatient hospital care
• Plan K pays 50 and Plan L pays 75 of
• Part A deductible
• Part B coinsurance after deductible
• Except 100 for covered preventive services
• First 3 pints of blood each year
• Hospice care

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Medigap Benefits Comparison
Medigap Benefits
Benefit Plans A - J Plan K Plan L
Part A Deductible Plans B - J 100 50 75
Part A Coinsurance Days 61 - 90 100 100 100
Part A Coinsurance Lifetime Reserve Days 91 - 150 100 100 100
365 Additional Hospital Days 100 100 100
Hospice Coinsurance 0 50 75
Skilled Nursing Facility Care Coinsurance Days 21 - 100 Plans C - J 100 50 75
Blood Deductible 100 50 75
Part B Deductible Plans C, F, J 100 0 0
Part B Coinsurance 100 50 75
Part B Excess Charges Plans F, I, J 100 Plan G 80 0 0
02-13-08
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Excess charges do not apply toward meeting the annual out-of-pocket maximum. Out-of-pocket maximum is 4,440 for Plan K and 2,220 for Plan L (in 2008).
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Items Not Covered
Medigap Benefits

• Long-term care
• Vision and dental care
• Including eyeglasses
• Hearing aids
• Private-duty nursing
• Outpatient prescription drugs

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs

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Special Types of Medigap Plans
Medigap Plans

• Medigap plans with drug coverage
• High deductible plans
• Plans F, J
• Medigap plans with hospice care
• Plans K, L
• Massachusetts, Minnesota, and Wisconsin
• Medicare SELECT

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Drug Coverage and Medigap
Medigap Plans

• Medigap policies covering prescription drugs
• May not be sold after January 1, 2006
• Same policies may be sold without drug coverage
• If your Medigap policy covers drugs
• Should have received information from company
• Explains how drug coverage affects your policy

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Medigap Plans With Drug Coverage
Medigap Plans

• Standardized plans H, I, J
• Sold before January 1, 2006
• Some policies
• Massachusetts
• Minnesota
• Wisconsin
• Some pre-standardized plans
• Others

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F and J High Deductible Option
Medigap Plans

• 1,900 deductible for 2008
• Amount can go up each year
• Often have lower premium
• Out-of-pocket costs may be higher
• May not be able to change plans
• Additional deductibles
• Prescription drugs
• Foreign travel

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Plans K and L
Medigap Plans

• Pay only partial costs after Medicare pays
• Have annual out-of-pocket maximum
• Plan K
• 50 for most services
• 4,440 out-of-pocket limit in 2008
• Plan L
• 75 for most services
• 2,220 out-of-pocket limit in 2008

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs

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How Much Does Medigap Cost?
Medigap Costs

• Depends on
• Your age (in some states)
• Where you live
• Company selling the policy
• Can be big differences in premiums
• For exactly the same coverage
• Compare the same Medigap policies

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Pricing Based on Age
No-age-rated (community-rated) Everyone pays same Generally least expensive over lifetime
Issue-age-rated Based on age when purchased Does not go up automatically as you get older
Attained-age-rated Goes up automatically as you get older Costs less when you are 65 Costs more at age 70 or 75
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What is Underwriting?
Medigap Costs

• Review
• Health status
• Medical history
• Insurance company determines
• Whether to accept your application
• How much to charge you
• Whether to make you wait for some benefits
• Application
• Usually includes medical questions
• Fill out carefully

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Buying a Medigap Policy
Medigap Costs

• May be able to buy a policy any time
• Best time is during open enrollment period
• Lasts for 6 months
• Starts on first day of the month you are
• Age 65 or older AND
• Enrolled in Medicare Part B
• Once 6-month Medigap open enrollment period
  starts, it can't be changed

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Open Enrollment Period
Medigap Costs

• Insurance company cant
• Deny you coverage
• Make you wait for coverage to start
• But may make you wait for coverage of
  pre-existing conditions
• Unless you have creditable coverage
• Charge you more for a policy
• Because of your health problems

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Lets look at a case study
Medigap Costs

• It is October 1, 2008, and Sam (who is 65) wants
  to buy a Medigap policy. He needs to know if he
  is in his open enrollment period. He looks at his
  Medicare card. His Medicare Part B coverage
  started August 1, 2008.
• Is Sam in his Medigap open enrollment period?
• Can the company deny him coverage?

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Medigap in Detail
Lesson 1 Medigap Basics Lesson 2 Medigap in
Detail

• Module 3Lesson 2

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Session Topics

• Prior creditable coverage
• Under age 65
• Medigap and Medicaid
• Guaranteed issue
• More information

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Session Topics

• Prior creditable coverage
• Under age 65
• Medigap and Medicaid
• Guaranteed issue
• More information

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Pre-Existing Condition
Medigap Coverage

• Health problem before new policy starts
• Medigap company can refuse to cover that
  condition
• If diagnosed or treated during the 6 months
  before the policy starts
• For up to 6 months in some cases
• Called pre-existing condition waiting period

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Creditable Coverage
Medigap Coverage

• Coverage you had before applying for Medigap
• Can avoid or shorten waiting period for a
  pre-existing condition
• Medigap company cannot refuse to cover
  pre-existing conditions
• If at least 6 months creditable coverage
• With no break in coverage of more than 63 days

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Examples of Creditable Coverage
Medigap Coverage

• Union/employer group health plan
• Some health insurance policies
• Medicare Part A or B
• Medicaid
• IHS or tribal organization
• A state health benefits risk pool

• TRICARE
• FEHBP
• Public health plan
• Health plan under the Peace Corps Act
• COBRA
• SCHIP

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Not Creditable Coverage
Medigap Coverage

• Hospital indemnity insurance
• Specified disease insurance
• For example, cancer insurance
• Vision or dental policies
• Long-term care policies

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Lets look at a case study
Medigap Coverage

• Harry is 65 and was diagnosed with heart disease
  early in 2007. His Medicare Part A and Part B
  started November 1, 2007. Before that date, he
  had no health insurance coverage. Harry buys a
  Medigap policy with coverage starting March 1,
  2008.
• Can the Medigap insurance company refuse to cover
  Harrys heart condition for 6 months?
• Does Harry have prior creditable coverage?
• What if Harrys heart condition hadnt been
  diagnosed?

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Session Topics

• Prior creditable coverage
• Under age 65
• Medigap and Medicaid
• Guaranteed issue
• More information

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Medigap for People Under 65
Under Age 65

• Federal law does not require coverage
• May not be able to buy a Medigap policy
• Some state laws are different
• At age 65
• Can choose and buy any Medigap policy
• Companies cannot refuse to sell Medigap
• 6-month open enrollment period
• Already have Medigap
• May reapply to get a better rate

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Medigap for People Under 65
Under Age 65

• Some companies sell to people under 65
• Policies may cost more
• Some states require Medigap be offered
• See Guide to Health Insurance for People with
  Medicare
• Another open enrollment period at 65

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Right to Suspend Medigap
Under Age 65

• Under 65 and entitled due to a disability
• Right to suspend your Medigap policy
• While enrolled in employer group health plan
• Without penalty
• Get your Medigap policy back at any time
• Must notify Medigap insurer within 90 days of
  losing employer group coverage

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Session Topics

• Prior creditable coverage
• Under age 65
• Medigap and Medicaid
• Guaranteed issue
• More information

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Medigap and Medicaid
Medigap and Medicaid

• If you have both Medicare and Medicaid
• Most health care costs are covered
• Can suspend Medigap policy for up to 2 years
• An insurance company can sell you a Medigap
  policy only in certain situations
• For information, call state Medicaid office

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Suspending Medigap
Medigap and Medicaid

• Right to suspend Medigap
• Within 90 days of getting Medicaid
• Do not pay premiums
• Policy will not pay benefits
• Can suspend policy for up to 2 years
• Can start it up again
• No new medical underwriting
• No pre-existing condition waiting periods
• Call state Medicaid office

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Session Topics

• Prior creditable coverage
• Under age 65
• Medigap and Medicaid
• Guaranteed issue rights
• More information

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Medigap Rights and Protections
Guaranteed Issue Rights

• Also called guaranteed issue rights
• Special rights to buy Medigap
• Keep
• Letters
• Claim denials
• Postmarked envelopes
• Protections are in Federal law
• Many states provide more Medigap protections
• Call your SHIP or state insurance department

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Summary of Medigap Protections
Guaranteed Issue Rights

• Guaranteed issue rights in some situations
• Right to buy a Medigap policy
• Apply within 63 days from other coverage ending
• In these situations, an insurance company
• Must sell you a Medigap policy
• Must cover all pre-existing conditions
• Cant charge more because of past or present
  health problems

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Guaranteed Issue Rights
Guaranteed Issue Rights

• Rights to purchase plans A, B, C, F, K, or L, if
• Medicare Advantage or PACE coverage ends
• Employer group health plan coverage that pays
  secondary to Medicare ends
• You move out of the plan's service area
• You joined a Medicare Advantage or PACE plan
• First eligible for Medicare at age 65 and leave
  within 12 months

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Guaranteed Issue Rights(continued)
Guaranteed Issue Rights

• You dropped a Medigap policy and enrolled in
  Medicare Advantage Plan for first time
• Stayed in the plan less than a year and
• Want to switch back
• Medigap coverage ends through no fault of your
  own
• Plan or insurance company committed fraud

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Lets look at a case study
Guaranteed Issue Rights

• Jennie is 69 and joined a Medicare Advantage Plan
  when she first was eligible for Medicare at age
  65. She decides she would like to drop her
  Medicare Advantage Plan and go to Original
  Medicare.
• Does Jennie have a guaranteed issue right to a
  Medigap policy?

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Session Topics

• Prior creditable coverage
• Under age 65
• Medigap and Medicaid
• Guaranteed issue
• More information

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Information Sources for Medigap

• 2008 Choosing a Medigap Policy A Guide to Health
  Insurance for People With Medicare
• Available on www.medicare.gov
• SHIP
• State insurance department
• 1-800-MEDICARE
• 1-800-633-4227
• 1-877-486-2048 for TTY users

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