Ohio Department of Insurance Can Answer Medicare Supplemental Insurance Questions
Original Medicare provides many important health insurance benefits for its beneficiaries. However, Medicare does not cover everything. Medicare Supplemental Insurance policies (also called MedSup or Medigap) are viable options to provide beneficiaries the additional coverage they may need.
First, it is important to understand the two parts of Original Medicare. Part A pays part of a beneficiary's hospital expenses, some skilled nursing costs, hospice care and certain home health care charges. Part B pays part of a beneficiary's doctor bills, outpatient hospital care, preventive care and other medical expenses. The remaining uncovered costs can be the responsibility of the beneficiary, making it important for a beneficiary to consider a MedSup policy, sold by private insures, to supplement coverage gaps.
MedSup policies are available to those 65 years of age and older and also for people on Medicare due to a disability. They only help pay health care costs if you have Original Medicare. You do not need to buy a MedSup policy if you are in a Medicare Advantage Plan (formally Medicare+Choice). Also, individuals and families at certain low-income levels do not need a MedSup policy because Medicaid will pay all medical costs.
The best time to buy a MedSup policy is during your MedSup open enrollment period. The MedSup enrollment period lasts six months, beginning on the first day of the month in which you are age 65 and enrolled in Medicare Part B. During that period, an insurer cannot deny you coverage because of your health, place conditions on a policy, or charge you more because of pre-existing health problems. If you apply for a policy after your open enrollment period, the MedSup insurer is allowed to review your health history and evaluate your current health status to decide whether to accept your application.
There are 10 standardized MedSup benefit plans called "A" through "J". This means that the benefits of each plan are the same regardless of which insurer offers them. The only difference between the companies is the cost of each plan, the customer service, and possibly the company's financial stability. Standardization does not affect a policy that was purchased before 1992. These older policies may have additional benefits not found in the standardized plans. Policyholders do not have to replace these older plans with standardized plans.
Plan A covers only the basic benefits, which are included in all the plans. Each plan adds additional benefits with Plan J offering the most benefits. Premiums vary depending on the number of benefits and the age of the purchaser. On average, a Plan A premium can cost approximately $50 to $95 a month and a Plan J premium can cost $170 to $450 a month. The plans can help pay for basic benefits and deductibles, skilled nursing copays, foreign travel emergencies, at home recovery, prescription drugs and preventative care. The MedSup premium is in addition to the Medicare Part B premium, which generally is deducted from your monthly Social Security check.
Starting January 1, 2006 Medicare will offer prescription drug coverage, which will cost approximately $35 a month. At that time, people enrolled in a MedSup plan with drug coverage (Plans H, I, J) will be able to either keep their current MedSup plan with drug benefits or enroll in a new Medicare-approved prescription drug plan. After January 1, 2006, new MedSup Plans H, I, and J will no longer be sold with a drug benefit.
When shopping for MedSup policies, remember that the lowest price is not always the best deal and be sure to shop around. Calculate your health care costs and decide which plan has the benefits you need. Determine if purchasing a MedSup policy would be a wise financial decision compared to paying out of pocket. Finally, after you purchase a policy, a "free look" period can be used in which you have 30 days to cancel or get a full refund on your policy.