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Day 3 Medicare Supplement Insurance (Medigap)


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Title: Day 3 Medicare Supplement Insurance (Medigap)

Day 3 Medicare Supplement Insurance (Medigap)
  • 4 parts of Medicare
  • Part A Hospital Insurance
  • Part B Medical Insurance
  • Part C Medicare Advantage Plans
  • Part D Prescription Drug Coverage
  • Part A B Original Medicare
  • Automatic enrollment if getting SS benefits, must
    enroll if not
  • Premiums always for Part B, only for A if not
    enough credits
  • Not comprehensive coverage, has coverage gaps
  • Out-of-pocket costs for A B change yearly- see

Medicare Part A (Hospital Insurance)
  • Part A Covers
  • Inpatient hospital care
  • Care in a skilled nursing facility (SNF)
  • Home health care
  • Hospice care
  • Blood

In-Patient Hospital Coverage
  • Covered days in a hospital
  • 90 renewable days
  • Medicare pays 100 for days 1-60 in a benefit
    period AFTER beneficiary pays Part A deductible
  • Daily co-payment for days 61-90 in a benefit
  • 60 non-renewable days
  • Daily co-payment for days 91-150 (lifetime
    reserve days)
  • A benefit period is a period of time that
    Medicare pays for a persons care in a hospital
    or SNF. It begins when a beneficiary goes into
    the hospital and ends when she/he has been out of
    the hospital or skilled nursing facility for 60
    consecutive days

Medicare Part B (Medical Insurance)
  • Physicians services
  • Out-patient hospital services
  • Durable medical equipment
  • Prosthetics, orthotics, and supplies
  • Ambulance
  • Home health care (if not Part A)
  • Blood (if not Part A)

Physician Services
  • Physicians services covered
  • Exams
  • DOES NOT include routine annual physicals
  • Welcome to Medicare Exam
  • 1x only exam within first 12 months of joining
    Part B
  • Annual Wellness Visit
  • Discussion with doctor to develop prevention plan
    to improve health, routine measurements height,
    weight, blood pressure
  • Medical and surgical procedures, anesthesia,
    diagnostic tests and procedures
  • Radiology and pathology services (in or out of
    the hospital)

Physician Services
  • Physicians services NOT covered
  • Most routine physical exams and tests related to
    such exams
  • Most routine foot care
  • Exams for the fitting of hearing aids
  • Exams for eyeglasses (except cataract related)
  • Most routine dental care or false teeth

Ambulance Coverage
  • Medicare covers ambulance service when transport
    in another vehicle would endanger health
  • Will pay for transport from home to hospital/SNF
    or from hospital/SNF to home
  • Medicare will NOT pay for ambulance used as
    routine transportation

Medicare Advantage
  • Type of Medicare health plan offered by a private
    company that contracts with Medicare to provide a
    beneficiary with their Part A B benefits
  • One way for a beneficiary to get additional
    Medicare coverage to cover the gaps in Original
  • The plan must offer Part D drug coverage
    members who want drug coverage may only take drug
    plan offered by the Medicare Advantage plan
  • If enroll in stand alone PDP, will be
    dis-enrolled from Part C and returned to Original

Medicare Advantage
  • Eligibility requirements
  • Have Medicare Part A Part B and must pay Part B
  • Cannot have ESRD (except if have coverage with a
    non-Medicare plan from the same company prior to
    being diagnosed)
  • Must live in the plans service area
  • Cannot be out of plans service area for more
    than 6 consecutive months
  • Automatic disenrollment when changing Medicare
    Advantage Plans
  • Dont need to call plan

Medicare Advantage
  • 4 Enrollment Periods
  • Initial Same as Part B (7 months around
  • Open Oct. 15th-Dec 7th (effective Jan 1st) can
    change from,
  • Original Medicare to Medicare Advantage Plan
  • Medicare Advantage plan to Original Medicare
  • Medicare Advantage plan to another Medicare
    Advantage Plan
  • Upgrade to include Medicare Prescription Plan
  • Downgrade to exclude Medicare Prescription Plan
  • Special Various qualifying events
  • MADP Jan 1st Feb 14th. Can leave plan and
    return to Original Medicare
  • Cannot move to another MA plan during this period

Medicare Advantage
  • Plan types
  • HMO (Health Maintenance Organization)
  • Lower premium managed care plan, must stay in
  • HMO-POS (HMO with Point-of-Service option)
  • HMO plan but can use out of network providers
  • PPO (Preferred Provider Organization)
  • Can use out of network providers for extra cost
  • SNP (Special Needs Plan)
  • Comprehensive program of medical care with
    membership limited to certain groups
  • PFFS (Private-Fee-For-Service)
  • Use providers who accept plan, pay extra for
    extra benefits

Quick Reference Pros of Medicare Advantage Plans
  • Medicare Advantage Plans tend to attract people
    who are not high utilizers of medical services.
    They also attract people who want a lower premium
  • Pros
  • Convenience of having only one plan (drug plan
    can be included
  • More choices available (HMOs, HMO-POSs, PPOs)
  • Lower premiums than Medigap plans
  • Potential for better coordination of care (HMOs
    provide this)
  • Additional benefits such as hearing, dental,
    vision and annual exams

Medicare Supplement Insurance (Medigap)
Examples of Gaps in Medicare
  • Part A gaps
  • In-patient hospital deductible
  • Daily co-payment for in-patient hospital days
  • Daily co-payment for in-patient hospital days
  • Daily co-payment for SNF days 21-100
  • Part B gaps
  • Annual deductible
  • Co-insurance (usually 20)
  • First three pints of blood
  • Coverage outside the United States

  • Medicare Supplement Insurance (referred to as
  • Special kind of health insurance coverage
    developed to provide extra coverage beyond
    Medicare by filling some of the gaps in Medicare
  • Offered by private insurance companies (not the
    federal govt)
  • A Medigap policy is different from a MA plan MA
    plans are ways to get Medicare benefits. A
    Medigap policy acts as a secondary policy to
    cover the costs of Original Medicare benefits
  • Not all products that help cover Medicare
    out-of-pocket costs are Medigap policies (i.e.
    Retiree Plans, MassHealth)
  • Prescription coverage NOT included if a
    beneficiary wants prescription drug coverage,
    must join a Medicare Prescription Drug Plan

Medigap Features
  • Medigap Features
  • No networks, can go to any doctor that accepts
  • Generally, Medigap policies pay only after
    Medicare pays first (exception foreign travel)
  • Coverage is standardized to make policies easier
    to compare

Consumer Protection
  • Consumer protections
  • Outline of coverage must be provided
  • Free Look Can return policy for full refund
    within 30 days if not used
  • Illegal to be sold more than one Medicare
    Supplement (upgrade if need more coverage)

Medigap Background
  • Legislation enacted under the Medigap Reform Law
    Act of 1990 (also known as OBRA 90) established
    uniform regulations for Medicare
    Supplement/Medigap Insurance in every state
  • Every state, except MA, WI and MN, was required
    to adopt the 10 standard benefit packages and
    label them plans A-J
  • All Medigap policies and text are standard for
    all insurers, basic benefits are the same but
    some plans may offer additional benefits and
    prices may differ
  • OBRA law did not affect policies already in
    force, i.e. they did not have to come into
    compliance to be one of the new types of policies
    (ex Supplement Two plan in MA)

Medigap in Massachusetts Special Features
  • Special features of Medigaps in MA
  • No waiting period for pre-existing conditions
    (federal law allows up to six months)
  • Guarantee issue (cannot deny coverage based on
    age, health, past claims)
  • Exception is ESRD for under 65
  • Policies guaranteed renewable (except in case of
    non-payment or misrepresentation)
  • Free look provision
  • 30 days to review plan and can cancel for full

Medigap in Massachusetts Eligibility
  • Must be enrolled in Medicare Parts A and B
  • Under age 65 Medicare beneficiaries with
    disabilities can enroll at any time during the
    year during continuous open enrollment (see next
  • Beneficiaries with End Stage Renal Disease
  • 65 Can apply anytime
  • Under 65 Massachusetts Medigap companies NOT
    REQUIRED to sell to beneficiaries under age 65
    with ESRD
  • Insurers may decide to provide coverage to
    persons under 65 with ESRD, but are not required
    to do so

Medigap in Massachusetts Open Enrollment
  • Continuous Open Enrollment
  • Massachusetts Medigap companies currently offer
    continuous open enrollment allowing beneficiaries
    to join or change companies or coverage at any
  • Medicare beneficiaries in other states can
    purchase a Medigap policy during one of the
    federally-regulated Medigap enrollment periods

Changing Medigap plans
  • Beneficiaries must call their existing Medigap
    plan to dis-enroll when changing Medigap plans
  • No automatic disenrollment like with Medicare
    Advantage Plans
  • Must call new Medigap plan to enroll

Medigap in Massachusetts Policies
  • Medigap policies in Massachusetts
  • All Medigap policies sold in MA must include
    certain Basic Benefits (minimum package of
    benefits allowed by law)
  • All private Medigap companies must offer the 2
    standardized plans available in Massachusetts
  • 2 standardized Massachusetts plans
  • Core Basic Benefits package
  • Supplement One (Medex Bronze) Basic Benefits
    with additional benefits
  • Supplement Two (Medex Gold) No longer being
    sold but can still be held by beneficiaries

  • Massachusetts Core policy
  • Core offers the following Basic Benefits
  • Part A daily co-payment fro hospital days 61-90
  • Part A daily co-payment for hospital care days
  • 100 Part A eligible expenses beyond 150 days to
    a maximum of 365 additional lifetime days
  • Part B co-payment (usually 20)
  • First 3 pints of blood
  • Additional 60 days per year in a licensed mental
    health hospital

Supplement One
  • Massachusetts Supplement One policy
  • In addition to the Basic Benefits coverage
    offered by Core, Supplement One offers the
    following additional coverage
  • Part A deductible
  • Skilled Nursing Facility co-payment days 21-100
  • Part B deductible
  • Foreign travel (some CORE plans also offer this)

Core Supplement One Benefits
Basic benefits Yes Yes
Part A inpatient hospital deductible No Yes
Part A skilled nursing facility coinsurance No Yes
Part B deductible No Yes
Foreign travel emergency No Yes
Inpatient days in mental health hospitals 60 days per calendar year 120 days per benefit year
State-mandated benefits (yearly Pap tests and mammograms. Check plan for other state-mandated benefits.) No Yes
Supplement Two Plan
  • Policy no longer sold in Massachusetts
  • As of 2006, policy no longer being sold but
    beneficiaries are allowed to keep policy if
    bought prior to this date
  • Premium very high due to decreased beneficiary
  • Offers prescription coverage which IS considered
  • If beneficiary drops policy, cannot enroll again
  • If beneficiary drops policy and wants Part D
    coverage, must enroll in Part D during Open
    Enrollment Period (no SEP)

  • All policies have monthly premium
  • Premium varies by policy and company
  • Premium usually increases slightly annually - MA
    requires premiums to be approved by the Division
    of Insurance, loss ratio determines if increase
    is approved and hearing required for increases
  • MA requires premiums to be the same for all
    consumers, regardless of age (not in other

Counseling Beneficiaries Is A Medigap Needed?
  • Does every Medicare beneficiary need a Medicare
  • Questions to ask beneficiary
  • Does she/he understand the gaps in Medicare
  • Does she/he have other coverage to help pay for
    out-of-pocket costs associated with Medicare?
    (Medicare Advantage Plan, Retiree Coverage,
  • Can she/he afford to purchase supplemental
    coverage? (screen for Public Benefit programs)

Counseling Beneficiaries Choosing a Policy
  • What beneficiaries should consider when choosing
    a policy
  • Benefits Choose a plan type (Core vs. Supp 1)
  • Premiums Benefits are almost identical from
    company to company
  • Reputation, reliability, financial status, and
    customer service of companies

Quick Reference Pros of Medigap Policies
  • Medigap policies tend to be bought by people
    with a high utilization of medical services such
    as doctors and hospital services. These policies
    are also popular amongst individuals who travel
    in foreign countries and who like to be able to
    choose which doctor they see without a referral
  • Pros
  • Can see any provider that accepts Medicare (no
  • No referrals or PCP is needed
  • Continuous open enrollment periods
  • Low to no co-pays or deductibles
  • Many policies offer travel coverage
  • All policies standard only 2 types of policies
    so choosing policy is easier
  • ESRD 65 can join a Medigap policy

Medigap vs. Medicare Advantage
Original Medicare Medigap Supplement 1 Medicare Advantage Plan
Higher premiums but no co-pays Generally lower premiums but has co-pays
Freedom to choose doctors May be restricted to network
No referrals necessary May need referrals for specialists
Some routine services not covered (vision, hearing) May include extra benefits (vision, hearing, fitness)
Covered anywhere in US Emergency services ONLY outside service area
Two Options For Supplementing Medicare
Step 1 Decide how you want to get your coverage
PART B Medical Insurance
PART A Hospital Insurance
PART C Combines Part A, Part B and usually Part D

Step 2 Decide if you need a Prescription Drug
PART D Stand Alone PDP
PART D Included in Part C
Step 3 Decide if you need to add supplemental
medical coverage
END If you join a Medicare Advantage Plan with
drug coverage (MAPD), you cannot join another
drug plan and you dont need and cannot be sold a
Medigap policy
MEDIGAP Supplement Core or Supplement 1 plan
Medigap Review
  • Review
  • What is a Medigap policy?
  • Who can buy a Medigap policy?
  • When can someone buy a Medigap policy?
  • Can a Medicare beneficiary under age 65 buy a
    Medigap policy?
  • Can a Medicare beneficiary with ESRD buy a
    Medigap policy?
  • Does a Medigap policy pay everything Medicare
    does not pay?

Medigap Review
  • Review
  • What Medigap policies are sold in Massachusetts?
  • What companies sell Medigap policies in
  • What Medigap policies are sold in other states?
  • Does every Medicare beneficiary need a Medigap
  • Do Medigap and Medicare Advantage pay for the
    same things?
  • Is Medicare Advantage (Medicare HMO or PPO)
    better than original Medicare plus Medigap?

Medigap Quiz
  • What Medigap plans are currently sold in
    Massachusetts and what do they cover?
  • When Clarence retired in 2004, he purchased a
    Medigap Supplement 1 Plan. He didnt join a
    Medicare Part D plan during the initial open
    enrollment because he was not taking any
    medication. He recently had a check up with his
    physician and was given a medication which will
    cost 300 per month. Clarences friend told him
    that he was smart not to have joined a Medicare
    drug plan as he can get his drugs from Canada.
    His friend said he would have had to pay a
    monthly premium for the Medicare drug plan and it
    would have wound up costing more than getting his
    drug from Canada.
  • What information would you give him?

Medigap Quiz, cont.
  • Mr. Black has a Supplement 2 Plan. His premium
    will be increasing on June 1. He says he cannot
    afford to pay the premium. He explains that he
    has dipped into his savings over the years to
    help pay his health care costs. He wants to know
    what other options are available to him. He tells
    you that he takes 5 different medications and
    needs prescription coverage.
  • What questions would you ask and how would you
    assist him?
  • What time of year can a Medicare beneficiaries
    purchase a Medigap plan?
  • What benefits do the two Medigap plans have in

Case Study 1 Gail Storm
  • Gail meets with you at the SHINE office on April
    1st. Gail purchased a Medicare Supplement 2 Plan
    when she first became eligible for Medicare. She
    tells you that the premium has increased. It is
    now almost 700 per month and she cannot afford
    it. She explains that she takes several
    medications for which she needs coverage. She
    also wants health insurance coverage that will
    allow her to stay with her current doctors.
  • What information would you give her?

Case Study 2 Ms. Penny Wise
  • Ms. Wise meets with you at the SHINE office. She
    is retiring from her job at the Pound Bank. She
    has been to Social Security and signed up for
    Medicare A B. She now wants to know about
    Medigap insurance. She says that her company will
    be giving her health insurance after her
    retirement, but she tells you that one can never
    have too much insurance.
  • How would you assist her?

Case Study 3 Mr. Hale N. Hardy
  • While in Florida on vacation, Mr. Hardy, who has
    Medicare A B and a Blue Cross/Blue Shield
    Medicare Supplement 1 Plan, broke his arm and was
    taken to the hospital. Dr. Grim, who does not
    accept Medicare assignment, set Mr. Hardys arm.
    Mr. Hardy returned to Dr. Grims office for
    follow-up treatment. After Mr. Hardy returned
    home, he received a bill from the doctor. Mr.
    Hardy came to see you because he doesnt
    understand why he received the bill and tells you
    he has never had to pay additional money before.
  • Why is Mr. Hardy being charged an additional
    amount of money?
  • How would you assist him?

Case Study 4 Sol Emm Vow
  • Sol and his wife Emm have both been on Medicare A
    B since they turned 65 in 2006. He is currently
    working for a company hes been with for the past
    19 years, but expects to be let go in the next
    month. His company has been buying Blue
    Cross/Blue Shield Medex Gold plans for both of
    them since they became eligible for Medicare. Sol
    says he will not be able to afford the monthly
    premiums for Gold once the employer stops
    covering. He wants to know what affordable plans
    are available.
  • Sol takes several expensive medications which
    would cost over 1,000/month if he had to
    purchase them. Emm takes two generics. Their
    current combined monthly income is 4,200/month.

Case Study 5 Mr. Wayne Scoat
  • Mr. Wayne Scoat meets with you at the SHINE
    office. Mr. Scoat tells you he enrolled in Blue
    Cross/Blue Shields Medicare Supplement 2 (Medex
    Gold) in June of 2005 when he became eligible for
    Medicare because he had high prescription costs.
    He is now taking only one inexpensive medication
    and is paying for a benefit he is not using. A
    friend told him he will have to wait for the
    annual open enrollment before he can make a
  • The friend also told him he will pay a penalty if
    he enrolls in a Medicare Prescription Drug Plan
    (Part D). He wants to know if he has any other
  • How would you help him?

Case Study 6 Mr. Peter Pan
  • Mr. Pan meets with you at the SHINE office. He
    has been on Medicare A B for the past 6 years
    with a supplemental retiree plan that includes
    prescription coverage through his former
    employer. He has been notified that his employer
    retiree insurance will be ending next month. He
    wants to know what insurance is available to him.
    He is concerned that he will not be able to get
    insurance because he was recently diagnosed with
    high blood pressure. A friend told him he will
    have to pay a penalty for not joining a Part D
    plan during the initial open enrollment period.
  • How would you assist him?

Case Study 7 Paul E. Anna
  • Paul calls with a question and concerns about his
    insurance. He became eligible for Medicare about
    6 months ago when he turned 65, and he joined a
    Medicare Advantage HMO Plan. He is not happy with
    the plan and wants to get into original Medicare
    and pick up a Medigap plan. His HMO told him he
    can only make a change during the annual open
    enrollment period which is several months away.
  • How would you help him?

Case Study 8 Buck Ille
  • Buck is 76 years old and just moved here from
    Texas. He tells you he had great coverage with an
    HMO in Texas but now needs to get something
    comparable in Massachusetts. He explains that he
    met a woman from Massachusetts, Maud, who was in
    Texas on vacation. They hit it off and he moved
    here because she wants to stay close to her
    children and grandchildren. They are getting
    married and she will soon become Maud Ille. Now
    that he has a companion they plan to do a lot of
    traveling. He wants to make sure he gets a health
    plan that will provide good coverage when he
  • How would you help him?