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Senior Citizen's Guide to Indianapolis

What is Medicare Supplement insurance?

Medicare does not pay for everything. Medicare beneficiaries also pay a portion of their medical expenses, which includes deductibles, copayments, services not covered by Medicare, and excess charges when doctors do not accept assignment.

Medicare Supplement Insurance (Medigap)

Medicare Supplement insurance is also called Medigap insurance because it covers the "gaps" in Medicare benefits, such as deductibles and copayments.

Medicare Supplement insurance is a private health insurance policy purchased by a Medicare beneficiary. Federal and state law regulates Medicare Supplement policies.

Only a Medicare Supplement policy, or a Medigap policy, will help fill gaps in Medicare benefits. Other kinds of insurance may help you pay out-of-pocket health care costs, but they do not qualify as true Medicare Supplement insurance.

For example, an employer retirement health plan may pay for prescriptions, vision and dental services, but it may not pay for Medicare deductibles and copayments.

Therefore, it is not a true Medicare Supplement policy because it does not coordinate benefits with Medicare.

Do I Need a Medicare Supplement Policy?

The answer to this question depends on one factor. Do you know you will always have adequate income and assets to cover all medical costs NOT covered by Medicare, such as deductibles, copayments, or non-covered services?

If you are not sure the answer is yes, or if you do not want to risk it, you should explore your options for supplementing Medicare.

Standard Medicare Supplement Coverage

To make it easier for you to compare one Medicare Supplement policy to another, Indiana allows ten standard plans to be sold.

The plans are labeled with a letter, A through J. Plan A is the basic benefit package and Plan J is the most comprehensive.

These ten plans are standardized, which means that benefits will be the same no matter which company sells the policy to you. Plan D from one company is the same as Plan D from another company. Since Medicare Supplement policies are standardized, you are free to shop for the company with the best price and customer service.

Generally, Medicare Supplement policies pay most, if not all, Medicare copayment amounts, and policies may pay Medicare deductible amounts. Also, some of the ten standard plans pay for services not covered by Medicare, such as prescriptions.

Although the benefits are the same for each standard plan, the premiums may vary greatly. Before purchasing a supplement policy, determine how the company calculates its premiums.

An insurance company can calculate premiums one of three ways.

The Indiana Department of Insurance must approve premium rates for all Medicare Supplement policies.

Medicare SELECT Insurance Policies

Medicare SELECT policies are a type of Medicare Supplement insurance sold by a few private insurance companies. A Medicare SELECT policy is one of the ten standardized supplement policies.

It differs from Medicare Supplement insurance because you are expected to use a network of hospitals associated with the insurance company.

In return, you will usually pay lower premiums. Also, in order to enroll in a Medicare SELECT plan, you must live within the service area of a network facility.

What does Medicare Supplement insurance cover?

Medicare Supplement insurance is sold in 12 standard plans. As of January 1, 2006, Plans H, I, J are no longer sold.

Every company must sell Plan A, which is the basic plan, or the "core benefit" plan. The standard plans are labeled A through L.

Remember, the plans are standardized. So, Plan F from one company will be the same as Plan F from another company.

Select the supplement policy which fits your needs, and then purchase that plan from the company which offers the lowest premiums and best customer service.

Core Benefits:

You will have to pay part of the cost-sharing of some covered services until you meet the annual out-of-pocket limit. Plan K has a $4,000 out-of-pocket limit. Plan L has a $2,000 out-of-pocket limit. Once you meet the annual limit, the plan pays 100% of the Medicare copayments, coinsurance, and deductibles for the rest of the calendar year. These amounts can change each year.

Part A Deductible

The initial amount Medicare does not pay for an inpatient hospital stay per benefit period ($1,068 in 2009).

Skilled Nursing Copayment

The amount Medicare does not pay for days 21-100 in a skilled nursing facility ($135/day in 2009).

Part B Deductible

The initial amount Medicare will not pay for covered physical or other outpatient services each calendar year ($135 in 2009).

Foreign Travel Emergency

(Medicare does not pay for care received in a foreign country.) This benefit covers, after a $250 deductible per year, 80% of health expenses for emergency care received in the first 60 days of a trip to a foreign country, up to a lifetime maximum of $50,000.

At Home Recovery

(Medicare only pays for skilled nursing home health care.) This benefit covers home health visits for assistance with activities of daily living, when either Medicare home health coverage is currently being received or within eight weeks from the last Medicare home health visit, up to $1,600 per year.

Preventive Care

This benefit covers an annual preventive exam and other preventive services (not covered by Medicare) up to a maximum of $120 per year.

Part B Excess

(Medicare does not pay excess charges above its approved amount.) This benefit covers the difference between the Medicare approved amount and the limiting charge (which is no more than 15% above the Medicare approved amount). This benefit pays either 80% or 100% of the Part B excess charges.

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