Devils Corner - Where I get to indulge a bit of devilish advocacy

Friday, November 4, 2011

Part 4: Medicare Supplement Plan Benefits


Unlike Medicare Advantage plans, Medicare Supplement (aka MedSupp or MediGap) plans don’t replace Original Medicare.   They do exactly what their name suggests:   they supplement the benefits provided by Original Medicare.   It’s been said often enough for the concept to stick that Medicare Supplement plans ‘fill in the gaps’ left by Original Medicare.   That’s why they’re so often called MediGap plans.   For myself, I like the term MedSupp better.

The first thing to understand about Medicare Supplement (MedSupp) plans is that they are PRIVATE insurance plans.  They are NOT part of, nor do they replace, Original Medicare.   You buy MedSupp plans strictly in addition to Original Medicare so you wind up with 3 premium payments:
1.      Medicare Part B (directly to the government, usually via your Soc Sec check)
2.      Medicare Part D (to the government via the insurance company)
3.      MedSupp Plan premium (to an insurance company only)

Another thing to understand about MedSupp plans is that they are NOT subject to the enrollment periods and restrictions that govern the Medicare Advantage plans we’ve been discussing.  This is a HUGE upside:  it means you can change your MedSupp plan at any time of the year that suits you.   You don’t have to wait until the next appropriate enrollment period rolls around.   The downside, of course, is that while you can change a MedSupp plan at any time, in most cases you will still have to pass medical underwriting in order to make the change successfully.   Fortunately, MedSupp underwriting is vastly simpler and easier than what the younger generations face. 

Also, unlike many Medicare Advantage plans, many MedSupp plans are ‘indemnity’ plans.   This means you don’t have to worry about choosing a PCP or even staying in the insurance company’s PPO network.   As long as your doctor and/or hospital accept Original Medicare, the plan covers their services.   Just be sure that Medicare approves the service you’re getting!

That brings us to the one aspect of MedSupp plans that it is absolutely essential to understand – and which none of the TV advertisements tell you:  the Federal Government sets the core benefits for all MedSupp plans.  

In its determination to ensure it gets the maximum possible utilization out of the English alphabet, the government has assigned a letter to each MedSupp plan starting with ‘A’ and currently – as of 2011 – running not-necessarily-in-sequence all the way out to ‘N’.   The benefits the plan offers increase as the letters move down the alphabet.  Thus, plan ‘A’ provides only the mandatory core benefits; plan ‘F’ provides the mandatory core benefits plus reasonably comprehensive additional coverage.

Most importantly, all MedSupp plans for any given letter offer exactly the same benefits.  So Plan A is Plan A is Plan A – it doesn’t matter what insurance company you choose.   The benefits are the same. 

This doesn’t mean that all insurance companies charge the same, of course.   How much any given insurance company charges for any given MedSupp plan depends on the contracts that company has with its doctors and hospitals, on the medical underwriting guidelines it uses (or not), as well as whether it uses age as a determining factor in setting premiums.   The difference can be hundreds of dollars a month.

The next page illustrates the plans currently offered in Southern California and the additional benefits each provides.   It’s worth noting that not every insurance company offers every MedSupp plan.


For a full comparison of all the Medicare Supplement plans available, go to   Be prepared – it’s a BIG booklet.  The chart you want is on page 11.  

The quick’n dirty version is:

Plan A –
pays only the minimum ‘basic benefits’ required by law (for this you’d pay money?)

Plan B –
·         pays Plan A benefits plus
·         Part A deductible

Plan C –
·         pays A & B benefits plus
·         shares costs on Skilled Nursing Care plus
·         Foreign Travel Emergency

Plan D  -
·         Pays same as Plan A & B BUT NOT PART B DEDUCTIBLE

Plan F(regular)
·         Pays Plan A & B benefits plus
·         Part B deductible plus
·         Part B allowable excess charges
·         Foreign Travel Emergency

Plan F(high deductible)
·         Same benefits as regular Plan F but only AFTER you pay a $2,000 deductible of its own

Plan G
·         Same benefits as Plan F EXCEPT it does NOT pay Part B deductible

Plan K
·         pays Plan A benefits plus
·         50% Part A deductible plus
·         50% Skilled Nursing Care plus
·         Limits your out of pocket expenses to $4,640 / year (for 2011)

Plan L
·         pays Plan A benefits plus
·         75% Part A deductible plus
·         75% Skilled Nursing Coinsurance plus
·         Limits your out of pocket expenses to $2,320 / year (for 2011)

Plan M
·         pays Plan A benefits plus
·         50% Part A deductible plus
·         100% Skilled Nursing Coinsurance plus
·         Foreign Travel Emergency

Plan N
·         pays Plan A benefits plus
·         100% Part A deductible plus
·         100% Skilled Nursing Coinsurance plus
·        Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in an inpatient admission.
·         Foreign Travel Emergency

I hope you’ve found all this helpful.   For more information, check out
Or, at the risk of sounding like an insurance agent… drop me a note with any questions at

Thursday, November 3, 2011



So let’s take a look at the terms you need to understand in order to figure out whether a Medicare Advantage plan is right for you.   Keep in mind that all the time frames in this section apply ONLY to Medicare Advantage plans.   NONE OF THESE RULES APPLY TO MEDICARE SUPPLEMENT PLANS.

This item confuses so many people so often that it bears repetition:  


Service Areas
Regardless what type of Medicare Advantage plan you like, you MUST live in an area the plan service area in order to sign up.  If you move out of the area, or if the plan closes service in your area, you will have a new enrollment period to change your Advantage plan.   You must also use only doctors and hospitals that are in your Medicare Advantage plan network.  

As of right now (2011 – 2012) the times you can change either your Medicare Advantage or Part D plans are:

There are actually 5 different triggers for the Initial Enrollment Period, but the most common is the easy one:  under normal ‘turning age 65 circumstances’ it’s the 7-month period beginning 3  months before your 65th birthday includes the month of your 65th birthday, and extends through the 3 months FOLLOWING your 65th birthday.  

During your Initial Enrollment Period, the Medicare world is your oyster.   You can enroll in any kind of Medicare and / or Part D plan you desire regardless of your health as long as you don’t have end stage renal disease. (There’s a special government program for that condition.) 

ANNUAL OPEN ENROLLMENT PERIOD:  October 15 to December 7
During this time you can
×      join a Medicare Advantage plan even if you’d passed on it before
×      Join a Medicare Part D plan
o        WATCH!   Late penalties apply if you didn’t enroll when you were first eligible
×      DROP either an Advantage or Part D drug plan and go back to Original Medicare
×      CHANGE from one Advantage plan to another

ANNUAL DISENROLLMENT PERIOD:   January 1 to February 14
Yep, you guessed right.   During this period you can
×      DISenroll from a Medicare Advantage plan & return to Original Medicare
×      If you disenroll from an Advantage plan, you CAN still sign up for a Part D drug plan
o        but you canNOT switch from Original Medicare to an Advantage plan

Special Enrollment Periods are triggered by events rather than predetermined dates.  While there are a goodly number of triggers, the two most common are:
×      You move out of your Medicare Advantage Service Area
×      Your Medicare Advantage plan closes down in your area

These situations trigger a 2-month period (3 months, if you move & notify the insurance company in advance) during which you can either join a Medicare Advantage plan or switch to a new one offered in your new area. 

Keep in mind that this is only an overview of the most common situations affecting Medicare Advantage plans.   For detailed information, go to Medicare’s own site:

MEDICARE Part 2: Advantage Plan Basics


And so we come at last to the plans that are currently generating enough paper advertisements to kill three trees for every American over the age of 55.   So what are they?

Fundamentally, there are two types of Medicare plans:

×      Medicare Advantage, or Part C plans and
×      True Medicare Supplement, or MediGap plans

As you’ve already guessed from the ‘Part C’, Medicare Advantage plans are indeed actually Medicare.    That means that all Medicare Advantage plans MUST include all the benefits in both parts A & B.   They can offer more, but they MUST cover at least as much as Original Medicare. 

The key thing to understand about Medicare Part C – the Advantage plans - is that they are offered by private insurance companies.   These plans are offered by EVERY private insurance company – Anthem, Blue Shield, Cigna, Health Net, Humana, Kaiser, United Health Care…it’s one very long list.   When you sign up for a Medicare Advantage plan you sign away your actual Medicare benefits to the insurance company you’ve chosen.   Medicare then pays the insurance company to manage your health insurance benefits.  In return the insurance company pays your claims instead of Medicare.   You still pay your Medicare Part B premiums but you may not have to pay an insurance company premium.   Some Medicare Advantage plans still have a zero premium.   In addition, many Medicare Advantage plans include EXTRA benefits not found in Original Medicare, e.g., dental, vision, or even chiropractic services.   These extra benefits vary from plan to plan so be sure to check on the benefits the plan you’re interested in offers.

While there are a number of variations on the theme, Medicare Advantage plans typically fall into two categories:
×      HMO and
×      PPO

Like any HMO, Medicare Advantage HMO plans require you to sign up for a Primary Care Physician (PCP).   Your PCP is the gatekeeper for all your plan benefits.   If you need to see a specialist or need any kind of test, you must first obtain a referral from your PCP.    The up side, however, is that Medicare Advantage HMOs offer the greatest range of benefits for the lowest price.  Medicare HMO plans are the ones least likely to charge a monthly premium.

If you’d rather go to your own doctor and not have to bother with the referral treadmill, then you can look into a Medicare Advantage PPO plan.   As with the “regular” PPO plans you’ve known and…not completely hated… there are no gatekeepers or referrals to worry about.   As long as your doctor accepts Medicare and is in the insurance company Medicare Advantage PPO network, you have nothing else to worry about.  However,  as with ‘regular’ PPO plans, you should expect to pay a higher percentage of your medical bills out of your own pocket than you would with an HMO.

Miscellaneous plans:  There are some less common types of Medicare Advantage plans including (but not limited to):

            Fee for Service
Key point:   you MUST get your doctor’s agreement to accept Medicare EACH & EVERY TIME you see him.  Doctors can decide at any time not to accept the plan.

            Special Needs Plans
                        These are Medicare Advantage plans designed exclusively for people with                                     chronic medical conditions, e.g., diabetes,  congestive heart failure, HIV among

Medicare Advantage plans typically have low or even no premiums.   They also typically provide genuinely comprehensive coverage with some plans even covering gym membership and other extras.  That’s the upside: you get a lot of coverage for a very little money.

The downside is that the reason Medicare Advantage plans are cheap is because the government’s subsidizing them.  So, since the government’s footing the bill, Uncle Sam gets to decide the hoops you have to jump through.   That’s why all those ads are filling the airwaves and your mail box NOW – because this is the ONLY time of year the government permits you to make changes to a Medicare Advantage program.   Miss the deadline that applies to you now, and you’re stuck with what you’ve got until next October. 

Part 1: Medicare Basics


Part 1:   Original Medicare

Medicare!   Part A!   Part B!   Advantage!   MediGap!  Supplements!  (Like it’s a pill, now?)

It’s that time of year again – Medicare Madness hits the Mailbox!    Even if you’re not (yet!) of an age to be affected you know someone who is drowning in a paper sea of Medicare offerings. SO what’s it all mean on THIS planet?   To help ease some of the confusion, here’s a quick overview of Medicare and all those maddening Medicare terms. 

This is the government’s social health insurance we’ve all gotten used to taking for granted since LBJ signed it into law back in 1965.    Medicare is what your “FICA” payroll deduction pays for:  that “FICA” stands for ‘Federal Insurance Contributions Act. (Bet you never knew what that stood for, did you?)   Even the tax comes in two parts:   the total FICA tab is 2.9% of your wages / salary / what-have-you.   If you’re lucky enough to still have a job for somebody else, then you pay half (or 1.45%) of the total.   Your employer pays the other half.   Of course, if you’re working for yourself, then you get to pay the full amount.   The self-employed can take a deduction for their “employer half” – but that’s a whole other article.

What Medicare is NOT
What Medicare is NOT is Medicaid – or MediCAL as it’s called here in California.    The names are similar enough to cause confusion, but the two programs are pretty much opposite sides of the social insurance coin.   YOU pay for your Medicare benefits over a minimum of 10 years of paying FICA taxes; the government is not gifting you Medicare benefits.   Medicaid is a program for individuals and families with limited incomes and resources.   Unlike Medicare  - where your FICA taxes pre-pay your benefits - Medi-CAL is funded jointly by Federal and State governments.  Where Medicare is managed by various Federal agencies, each individual state government manages its own Medicaid program. 

Medicare is also NOT Social Security.   Since the Social Security Administration is responsible for determining Medicare eligibility and processing your Medicare premium payments, there’s always a temptation to confuse the two.  


Barring disabilities and other such niceties, as long as you’ve paid at least 10 years of FICA taxes,  you are automatically eligible for Medicare Part A when you turn 65.    You may not be eligible for full Social Security retirement benefits, however, until you’re 66 or – for the youngsters in the crowd – even age 67.   Social Security is the program that, as of this writing at least, pays you a monthly income based on your reported income during your working life.   Medicare just pays the medical bills.   Most of ‘em…

So what’s with all the moving parts, then?   


Back in LBJ’s day, the entitlement mentality had not yet taken hold of Washington.   The idea at the time was that the government should help seniors pay for catastrophic medical expenses, but that individuals would and should remain largely responsible for their own routine medical bills.   That’s why Medicare was designed in parts, so seniors would not be forced to rely on the government for services they could pay for themselves. 

Bureaucrats being bureaucrats, the bill’s authors simply labeled each part with a letter rather than investing in something so … creative… as names.   (Former members of the military will recognize this tendency with something akin to fondness.)   And so we have:

Part A – this is the part that pays the BIG bills, hospitalization, skilled nursing care, etc.   
              That’s why this is the only part that’s both PREMIUM FREE & automatic.
Part B -  you have to actively enroll in Part B and pay for it.   This is the part that covers
              the day-to-day routine expenses:  doctor visits, lab work, diagnostic tests, etc.  
Part C – This is the part that was added in 1997.   It established what are called
               Medicare Advantage plans.   More on these later
Part D -   Remember, outside of things like chemotherapy, neither Part A nor Part B
covers prescriptions.  So in 2006 Washington decided to strip prescription coverage out of Medicare Suppement plans and establish a new, separate part of Medicare to cover it.  And so Part D – the Medicare Prescription Drug Plan was born.

Thursday, January 20, 2011

Health Care Reform & the bottom line

So Stage One of Health Care Reform (HCR) is now a reality.   Dealing with insurance applications that are now literally 20 pages longer, with insurance rates that are now sometimes 50% higher, makes this new law feel remarkably like a diagnosis of Stage One cancer.   You hope it won't get any worse.  You instantly, heart and soul commit to doing whatever it takes to beat the disease.   Because the one way to ensure the disease wins is to do nothing. 

Problem is, the folk who should be 'doing something' are more worried about refilling their election war chests than cutting out the cancer they've inflicted on the body public.  For all the rhetoric, the foot soldier reality is that the numbers don't work in application.   I had the privilege of serving on a panel addressing HCR's impact on the medical and business communities this week for the Association for Strategic Planning in Los Angeles.   Two of the panel members belonged to the medical profession:  one a chief hospital administrator, the other a senior Kaiser physician.   BOTH of them highlighted the financial disaster HCR represents even while recognizing the benefit of electronic recordkeeping.  For example:

HCR imposes serious new liabilities on hospitals as 'accountable care' organizations, all of which mean higher expenses;
HCR threatens to cut Medicare and Medicaid reimbursement rates to a level roughly 50% of cost.  

  1. even more doctors dropping out of goverment programs
  2. higher negotiated reimbursement rates from private insurance companies
  3. higher fees AND premiums for patients
And who are the majority of the uninsured in CA (as well as Texas, New Mexico, & Arizona)?   According to a California Health Care Foundation study (available for free through a full 61% of the uninsured in CA are Latino.   A whopping 49% of California's 6.8 million uninsured are NON-citizens.   The study doesn't speculate what percentage of the 61% also falls into the non-citizen category - but I suspect the break out would be reasonably NONsurprising. 

Regardless of composition,  the simple numeric fact is that this 49% represents the intractibly uninsured.   No amoung of high-minded rhetoric is going to convince people who are accustomed to free on-demand medical treatment to start paying for the service.   If they intended to, there are at least four (4) existing public programs designed specifically to insure this group.  Yet this 49% remain uninsured - even when it doesn't cost them anything at all!    So what magic wand does Washington expect to wave to suddenly change their minds?

Friday, January 7, 2011

Health Care Reform & the Self-Employed

Friday, January 7, 2011 6:09 PM
We've been getting questions on what impact Health Care Reform will have on the self-employed.  Like everything else connected to a law that was essentially passed before it was even written, the answer is a work in progress.   So you know:  I've been in the insurance industry for 30 years (I specialize in benefits for entrepreneurs & small businesses) and I must tell you this is the worst insurance environment I have ever seen.  What I'm about to say is based on that experience, not a political opinion or personal agenda.  Okay, so bias I gotta admit, but agenda - no.  

That date, here's what I've been saying:
Welcome, my dears, to the world of Health Care Reform (HCR).  As you've all undoubtedly noticed, HCR does NOTHING to address actual health care cost drivers, e.g., doctor and hospital fees or negotiating power.   Instead, our legislature took what appeared to them the easy way out:  they imposed an extensive array of fresh mandates and restrictions on the insurance industry.  The problem is that the government decision policy makers have no more understanding of how health insurance works than they have of setting and following a budget. 

Each & every element of above 'graph carries a novella length explanation.  The short answer is that every benefit the government dictates must still be paid for:  no one is telling doctors & hospitals to work for free.  (Nor am I suggesting they should.)   So when HCR dictates that 'essential preventive services' must be provided at zero copay, SOMEBODY still has to pay the doctor & lab.  When the government says that insurance companies must provide coverage to children with severe medical conditions (that have in CA typically been covered by Medi-Cal) SOMEBODY has to pay the bill.  That somebody is the insurance company.  

Okay, I can hear the lack of sympathy.  Believe me, I understand.  However, what's happening with HCR is that there is a whole slew of mandates already in effect (see partial list below) combined with the threat of revenue (i.e. premium) limits coming in 2014.   The combination puts the industry in a vise between having to pay UNCONTROLLED & rising medical costs on one hand & a fixed revenue ceiling on the other.   SO what the insurance companies are doing is plumping up their premium revenues as much as they can while they can.   Keep in mind that insurance companies canNOT raise their rates arbitrarily; despite all the self-righteous disclaimers we get from Sacramento, every rate increase we consumers suffer has already been approved by the appropriate state agencies.  

Where's that leave us poor suckers paying the premiums?   Squeezed right out the middle like frosting.  (For what it's worth, it's worse for brokers:  insurance companies are slashing broker commissions on health insurance as part of their cost controls, so those of us in the industry are catching it on both sides.  Whine....)

Is it going to get better?    Two guesses.  Second one doesn't count. 

So.  Will now hop off the soap box.   Anybody with the intestinal fortitude to hear more, just post a note.   This is a critical issue that is critically mis-understood.


Guaranteed Coverage for minor children (anybody tried to buy one of these lately?  Good luck!)
Extended Coverage of children on parental policies to age 26
Zero Copay for essential preventive services
Unlimited lifetime maximum benefits on PPO plans (that's the de facto case on HMOs)
No rescission on policies except for fraud
Elimination of 'limited benefit' policies
80% Medical Loss Ratio rules (i.e., 80% of every dollar must be spent on paying providers)

Some of these changes are either neutral or actually GOOD things.  In CA, for example, the law has prohibited policy rescission for any reason but fraud for a goodly number of years, 60 Minutes & the L.A. Times notwithstanding.   NOT a major cost factor for us here in CA.

Likewise the elimination of 'limited benefit' policies has helped end the sale of pseudo-policies like those offered by certain associations for the self-employed.  Such policies put caps on indvidual benefits (my personal favorite was the one that had a specific benefit for open heart surgery:  a whopping $10,000).   I've spent too many years listening to the horror stories of honest business folk who simply did not understand what those policies were - until it was too late.   Those policies are part of the reason you read about folk landing in bankruptcy for medical bills even though they theoretically had health insurance.

Hope that helps a bit.

Best to you all,

Bonnie Milani

Wednesday, December 22, 2010

THANK YOU, Robert C, for the wonderful review!

Here're some kind words a client posted about us on Yelp!

Milani Insurance Sevices

16708 La Maida St, Encino, CA 91436
Reviewed by Robert C.
Bonnie Milani is by far one of the sweetest people I've met here in Los Angeles. She takes the time to get to know her clients and really is passionate about making sure they get the best rate plan.

The first time I called her she gave advice on which plans would best suit my healthcare needs. She is a broker for both Anthem and Blue Shield of California. She knows the plans inside and out so you can trust her advice!

When I needed to fill out papers for Blue Shield of California Bonnie met with me at a Starbucks so that we could go over the best insurance option for me. The first thing she did when I met her in person was give me a great big hug so she's really outgoing and beyond friendly!

The best part about Bonnie is you can call or email her whenever you have a question or concern. She's there for you and never too busy! She has great energy so definitely get in touch with Milani Insurance if you're in need of healthcare coverage!