Medigap (Medicare Supplement Insurance)

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Medigap (Medicare Supplement Insurance)
Module 3
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Lesson 1 Medigap Basics
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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs
• More information

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs
• More information

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What Is Medigap?

• Health insurance policy
• 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)

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

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How Medigap Works

• 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 Medicare SELECT policy networks

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Medigap Is Not

• 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?

• 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 (guaranteed
  issue)

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Exercise
A. A Medigap policy works with

1. A Medicare Advantage Plan
2. Medicaid
3. Original Medicare
4. Medicare Prescription Drug Plan

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Exercise
B. The front of a Medigap policy must
clearly identify it as

1. Medicare Supplement Insurance
2. Medicare Supplemental Insurance
3. Medigap Supplement Insurance
4. Medigap Supplemental Insurance

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Exercise
C. Costs for a Medigap plan may vary by

1. Plan
2. Company
3. Where you live
4. All of the above

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs
• More information

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Why Buy Medigap?

• 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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What to Consider

• Do you have other health insurance?
• How often do you need health care?
• What type of health care do you need?
• Does your doctor accept assignment?

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Gaps in Original Medicare Coverage
What you pay in 2009Part A

• Hospital Stays
• Skilled Nursing
• Blood

• 1,068 deductible for days 1 60
• 267 per day for days 61 90
• 534 per day for days 91 150
• 0 for first 20 days
• Up to 133.50 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 Coverage
What you pay in 2009Part A

• Home Health Care
• Hospice Care

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

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Gaps in Original Medicare Coverage
What you pay in 2009Part 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
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Medigap Coverage Plans A - J
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Medigap Coverage Plans K L
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Items Not Covered

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

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MIPPA Changes(Effective June 1, 2010)

• Adds hospice coverage
• Basic benefit to all plans
• Deletes preventive services at-home recovery
• Creates new Plans D G
• Eliminates E, H, I, and J Plans
• Creates a new Plans M N

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2010 MIPPA Medigap Changes( denotes new plans
and benefits)
Basic Benefits Deleted Coverage Deleted Plans Plan D Plan G Plan M Plan N
Add Hospice Coverage- Part A coinsurance (Part A coinsurance 365 days Part B coinsurance or copayments for outpatient blood, first 3 pints per year) Preventive Services No In-Home Recovery E, H, I, J Basic, including 100 Part B Coinsurance Skilled Nursing Facility coinsurance Part A Deductible Foreign Travel Emergency (In-Home recovery deleted) Basic, including 100 Part B Coinsurance Skilled Nursing Facility Coinsurance Part A Deductible 100 Part B Excess Foreign Travel Emergency (In-Home Recovery deleted) Basic, including 100 Part B Coinsurance Skilled Nursing Facility Coinsurance 50 Part A Deductible Foreign Travel Emergency Basic, including 100 Part B Coinsurance (except up to 20 office visit copayment up to 50/ER) Skilled Nursing Facility coinsurance Part A Deductible Foreign Travel Emergency
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2010 Carryover Medigap Plans
Plan A Plan B Plan C Plan D Plan F Plan G
Basic, including 100 Part B coinsurance (Basic Part A coinsurance 365 days Part B coinsurance or copayments for outpatient blood, first 3 pints per year hospice Part A coinsurance) Basic, including 100 Part B coinsurance Part A Deductible Basic, including 100 Part B coinsurance Part A Deductible Skilled Nursing Facility (SNF) coinsurance Part B Deductible Foreign Travel Emergency Basic, including 100 Part B coinsurance Part A Deductible Skilled Nursing Facility (SNF) coinsurance Foreign Travel Emergency Basic, including 100 Part B coinsurance Part A Deductible Skilled Nursing Facility (SNF) coinsurance Part B Deductible 100 Part B Excess Foreign Travel Emergency Also a high deductible option of 2,000 Basic, including 100 Part B coinsurance Part A Deductible Skilled Nursing Facility (SNF) coinsurance 100 Part B Excess Foreign Travel Emergency
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Lets look at a case study

• Jonathan is 65 years old and is enrolled in
  Original Medicare, Parts A and B. He has a
  Medigap policy and thinks the first 3 pints of
  blood each year are covered by his Medigap
  policy.
• Is he correct?
• What are some basic Medigap benefits?

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Exercise
A. All Plans A J cover

1. Part A coinsurance for inpatient hospital care
2. Dental care
3. Prescription drugs
4. All of the above

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Exercise
B. Medigap Plans K and L

1. Have different cost-sharing than Plans A - J
2. Cover Hospice Care coinsurance or copayment
3. Cover at different percentages
4. All of the above

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Exercise
C. Which statement is true about Plans K and L

1. They pay only partial costs after Medicare pays
   its share
2. They do not have an annual out-of-pocket maximum
3. The out-of-pocket annual limits do not increase
   each year because of inflation
4. These plans usually cost more

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs
• More information

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Special Types of 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 (waiver
  states)
• Medicare SELECT (network plans)

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Drug Coverage and Medigap

• Medigap policies covering prescription drugs
• Only sold before 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

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

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F and J High-Deductible Option

• 2,000 deductible for 2009
• 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

• Pay only partial costs after Medicare pays
• Have annual out-of-pocket maximum
• Plan K covers
• 50 for most services
• 4,620 out-of-pocket limit in 2009
• Plan L covers
• 75 for most services
• 2,310 out-of-pocket limit in 2009

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Minnesota, Massachusetts, Wisconsin(waiver
states)

• A different kind of standardized plan
• NOT labeled Plans A L
• Offer comparable benefits to standardized plans
• Basic benefits
• Optional benefits
• For information
• Call State Insurance Department

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Medicare SELECT

• A type of Medigap policy (Plans A L) with
  networks
• To get full benefits (except in emergency)
• Must use specific hospitals
• In some cases must see specific doctors
• Generally cost less than non-network plans
• Can switch to another Medigap plan
• Same or lower value
• May not be offered in your state

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs
• More information

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How Much Does Medigap Cost?

• 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?

• 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

• 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

• 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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Waiting to Enroll in Part B

• Medigap open enrollment period starts
• Age 65 and enrolled in Part B
• Consider waiting to enroll in Part B
• If you or your spouse still working and
• You have group health coverage

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Buying a Medigap Policy

• Important decisionshop carefully
• Four steps
• Decide which plans meet your needs
• Learn which companies sell Medigap in your state
• Call the companies and compare costs
• Buy the Medigap policy

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Lets look at a case study

• 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 Medigap 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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Exercise
A. Companies may not sell new Medigap policies
covering prescription drugs after January 1, 2006?

1. True
2. False

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Exercise
B. Your Medigap Open Enrollment Period

1. Is an opportunity for the company to charge you
   more for past health problems
2. Can begin even if you dont have Part B
3. Lasts for six months, begins when you are at
   least 65 and enrolled in Part B
4. None of the above

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Exercise
C. Once the 6-month Medigap open enrollment
period starts, it can't be changed

1. True
2. False

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Session Topics

• Overview
• Medigap benefits
• Medigap plans
• Medigap costs
• More information

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Getting Information

• State Health Insurance Assistance Program
• (SHIP)
• Ask for a rate guide or shoppers guide
• Your State Insurance Department
• www.medicare.gov
• 1-800-MEDICARE (1-800-633-4227)

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Lesson 2 Medigap in Detail
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Session Topics

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

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Session Topics

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

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Pre-Existing Condition

• Health problem before new policy starts
• Medigap issuer 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

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

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Examples of Creditable 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
• CHIP

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Not Creditable 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

• Harry is 65. He was diagnosed with heart disease
  early in 2008. He had no health insurance
  coverage until his Medicare Part A and Part B
  started November 1, 2008. Harry buys a Medigap
  policy with coverage starting March 1, 2009.
• 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
• Other supplemental insurance
• More information

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Medigap for People Under 65

• Federal law does not require coverage
• May not be able to buy a Medigap policy
• Some state laws give Medigap rights to people
  under 65
• 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

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

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Right to Suspend Medigap

• 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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Lets look at a case study

• Martin just enrolled in Original Medicare. He is
  concerned about his ability to pay the
  coinsurance and deductible if he is ever admitted
  to the hospital for a lengthy stay.
• Would a Medigap policy cover Martins coinsurance
  for an inpatient hospital stay?

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Session Topics

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

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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

• 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
• Other supplemental insurance
• More information

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Medigap Rights and Protections

• Also called guaranteed issue rights
• Special rights to buy Medigap based on occurrence
  of certain events
• 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 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

• Rights to purchase in most cases 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
• Health coverage ends because 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)

• 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

• 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
• Other supplemental insurance
• More information

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Other Supplemental Insurance(non-Medigap)

• Group health coverage
• Employer
• Union
• Organization or association
• TRICARE for Life
• COBRA
• Understand your benefits and costs

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Session Topics

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

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Local Information
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Information Sources for Medigap

• 2009 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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Medigap Benefits Comparison
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
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 2009).
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