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

Friday, November 4, 2011

Part 4: Medicare Supplement Plan Benefits


PART 4:  MEDICARE SUPPLEMENT PLANS



MEDICARE SUPPLEMENT PLANS
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.

MEDSUPP PLAN OPTIONS

For a full comparison of all the Medicare Supplement plans available, go to  http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf.   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  -
(NOT TO BE CONFUSED WITH PART 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 www.medicare.gov.
Or, at the risk of sounding like an insurance agent… drop me a note with any questions at bonnie@milaniinsurance.com

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