MEDICARE SUPPLEMENT (MEDIGAP) POLICIES Q&A

Q: What is a Medicare Supplement Insurance policy?
A:
A Medicare Supplement, or Medigap plan, is a Health insurance policy sold by private insurance companies to fill the “gaps” in the Original Medicare Plan coverage. Medicare Supplement policies must follow federal and state law.

The front of the policy must clearly identify it as “Medicare Supplement Insurance.” In all states, except Massachusetts, Minnesota, and Wisconsin, a Medicare Supplement policy must be one of 10 standardized policies (labeled A to J) so you can compare them easily. Each policy has a different set of benefits. Two of the standardized policies may have a high deductible option.

In addition, any standardized policy may be sold as a “Medicare SELECT” policy. Medicare SELECT policies usually cost less because you must use specific hospitals and, in some cases, specific doctors to get full insurance benefits from the policy. In an emergency, you may use any doctor or hospital.

Q: What is the Original Medicare Plan?
A:
The Original Medicare Plan is a “fee-for-service” plan. This means you are usually charged a fee for each health care service or supply you get. This plan, managed by the federal government, is available nationwide. Medicare has two parts. Part A provides some coverage for hospital stays, while Part B helps with doctor visits and outpatient care.

Most people don’t have to pay anything for Part A, and pay a monthly premium for Part B. If you are in the Original Medicare plan, you use your red, white, and blue Medicare card when you get health care. Medicare Supplement policies sold by private insurance companies are designed to bridge the “gaps” in coverage that the Original Medicare Plan does not cover.

Q: Do all insurance companies offer all the standardized plans?
A:
No. Insurance companies that sell Medicare Supplement policies can offer as few as four plans that are designed to pay some or all of the eligible expenses not paid for by Medicare Part A (hospital coverage) and Medicare Part B (medical coverage). But, all Medicare Supplement plans A through J must contain the core features that are included in the Medicare Supplement plan A. It’s important to note, that Medicare Part A and Medicare Supplement plan A are not the same thing.

Q: Can any one buy a Medicare Supplement policy?
A:
No. You must qualify for both Medicare Part A and B, have enrolled in the Original Medicare Plan, and not be covered by other Health insurance, before you can buy a Medicare Supplement policy. 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 Medicare Supplement policy until you turn 65.

Some states require certain plans to be available to those under 65 who are eligible for Medicare due to disability. Private insurance companies are licensed and regulated by each state’s Department of Insurance; therefore, rules for buying a Medicare Supplement policy can vary by state. However, the federal government has standardized Medicare Supplement benefits for easy comparison.

Q: Can I keep seeing the same doctor if I buy a Medicare Supplement policy?
A:
Yes, in most cases. If you are enrolled in Part A and Part B of Medicare and you have a Medicare Supplement policy, you can go to any doctor, hospital, or other health care provider that accepts Medicare payments. Further, if your doctor accepts “assignments,” that means they accept the Medicare-approved amount as full payment, which reduces your out-of-pocket expenses and permits you to purchase a less expensive Medicare Supplement policy.

However, if you have a Medicare SELECT policy, you must use specific hospitals and, in some cases, specific doctors to get your full insurance benefits. Medicare SELECT plans can result in further insurance premium savings.

Q: Do Medicare Supplements pay for Long Term Care (LTC)?
A:
No! Private insurance companies sell LTC insurance that usually covers medical and non-medical care to help you with your personal care needs, also known as "activities of daily living," such as bathing, dressing, eating, and using the bathroom. Generally, Medicare Supplements don’t pay for Long Term Care, and neither does Medicare.

Q: Do Medicare Supplements pay for Prescription Drugs?
A:
Yes. Currently only Medicare Supplement Plans H, I, and J pay for some prescription drug benefits. However, not all insurance companies offer these plans because of the high cost of drugs. Starting January 1, 2006, when Medicare prescription drug plans become available, you won’t be able to buy Medicare Supplement policies covering prescription drugs.

Plans H, I, or J may still be sold, but without a drug benefit. If you already have a Medicare Supplement policy that covers prescription drugs, you may be able to keep it under certain circumstances. In addition, new types of Medicare Supplements might be available.

Q: When is the best time to buy a Medicare Supplement policy?
A:
For most people, the best time to buy a Medicare Supplement policy is during a Medicare Supplement open enrollment period, which typically lasts for six months. It starts on the first day of the month in which you are both age 65 or older, and enrolled in Medicare Part B.

Once your six-month Medicare Supplement open enrollment period starts, it can’t be changed. Certain states have additional open enrollment periods, during which an insurance company cannot deny you insurance coverage, place conditions on a policy (like making you wait for coverage to start), or charge you more for a policy because of past or present health problems. They must also shorten the waiting period for pre-existing conditions based on your previous health coverage.

If you don’t buy a Medicare Supplement policy during your open enrollment period, you may not be able to buy the one you want later, or you may be charged more for the policy. In addition, if you drop your Medicare Supplement policy, you may not be able to get it back.

Q: How can I learn more about Medicare and Medicare Supplements?
A:
Medicare and Medicare Supplements can be very complex and challenging to understand. Most of the questions and answers listed above can be found in the official Government publication, Medicare & You 2005. Medicare calls private insurance policies Medigap plans, the insurance industry calls them Medicare Supplements, and in this outline we stayed with the insurance industry’s version.

You may have many more questions not addressed in this outline. Therefore, the following are some resources for obtaining additional information: Visit the official government Medicare Web site www.medicare.gov

Call 1-800-Medicare (1-800-633-4227) to request a free booklet or audiotape entitled 2005 Guide to Health Insurance For People With Medicare: Choosing a Medigap Policy.

Visit your state department of insurance Web site.