Posts Tagged ‘medicare supplemental’

 

What do Halloween and Medicare Advantage Open Enrollment Periods have in common?

A. They both are spooky.

B. They happen at about the same time.

C. They leave many people in the dark.

D. Too much of either can make you sick.

E. All of the above.

The correct answer, of course, is:  E.   All of the above.

By the end of this brief post you will understand what a Medicare Advantage Open Enrollment Period is. We are currently in it. This year (enrollment for 2012) it runs from October 15 through December 7. You will also understand the differences between Medicaid Parts A, B, C and D and the importance of a Medigap policy.

First let’s take a look at what Medicare Advantage is and how it is different from “Original” Medicare. If you bear with me to the end, I’ll even mention a few neat tricks (or treats?).

Original Medicare

Medicare, as originally set-up and as it remains currently, has two principal parts (in fact, I read somewhere that Medicare was actually patterned after Blue Cross and Blue Shield). Part A provides hospital and other inpatient facility benefits . . . which is why it is called “Hospital Insurance” (imagine!). Part B covers other medical expenses (physician and other provider services, various diagnostic and screening services and durable medical equipment –like walkers and heavily advertised motorized chairs).

If you have the required work history you can signup for Medicare Part A and Part B (if it hasn’t been done automatically upon going on to Social Security) three months before the month of your sixty-fifth birthday, the month of the birthday, and three months following. If you are working and receiving group health benefits at work, you can delay signing up for Part B without a premium penalty for up to eight months after terminating employment. If you miss one of these sign up periods, be prepared to pay an extra 10% for every twelve month period you go without Part B. Take a look at a downloadable chart comparing the various sign-up periods on this site.

Part A is free (unless you didn’t have enough work credits for Social Security . . . but even then you can “buy-in” to Part A). Part B is not free. It costs $96.40 for most folks in 2011 ($99.90 in 2012). Part B premiums are more for others depending on income. And for the first time in a few years, premiums will go up in 2012.

Medicare expects you to chip in with coinsurance and deductibles. In fact, without extra help, the coinsurance and deductibles can get pricey (very). That is why, if you decide to go with “original Medicare” a good Medigap or Medicare supplemental policy is highly advisable (in fact, not purchasing a policy to save a few dollars is foolish). If you sign-up within six months of signing-up for Part B, the Medigap insurer must charge you the same premium it charges everyone else. If you wait too long, they can ask all sorts of nosey questions about your health and charge you accordingly. You may read more about Medigap insurance elsewhere on this site. We also have a great downloadable chart comparing the different types of Medigap plans (look at the second page).

Part C or Medicare Advantage

Congress decided to set up a mechanism to allow private insurers to join the Medicare party and provide coverage as an alternative to “Original Medicare.” Part C of Medicare provides for Medicare Advantage plans that are in lieu of Part A and Part B. The plans must provide all of the basic Medicare Part A and Part B services – but they can also offer other services that Original Medicare does not cover (perhaps dental, hearing aids, and other exotic benefits like gyms) – and they can (and do) charge various amounts for their plans. The federal government then pays the plans a fixed amount per plan participant. There are several delivery models to choose from (notably health maintenance organizations, preferred provider organizations, and private fee for service plans).

Medicare Advantage plans are gaining in popularity. I’m coming around, but I have been suspicious of them. Often folks sign-up beguiled by extra services only to discover they are paying more for the core services they really need.

Now this is really important: Some Medicare Advantage Plans offer a Part D drug benefit – but not all do. Understand what is being offered, because it could have serious consequences later if you decide to switch out of a Medicare Advantage Plan that doesn’t offer a drug benefit.

Generally, you can sign up for an Advantage plan when you first become eligible to sign-up for Medicare. Once in an Advantage plan you’re generally stuck with it until the next Open Enrollment Period although you can bail out of an Advantage plan anytime between January 1 and February 15 as long as you go back to original Medicare. If you had a Part D drug plan with your Advantage plan (discussed below) make sure you sign up for a new Part D plan when you make that switch. You will not have to wait to an Open Enrollment Period to make a switch if you move out of the coverage area, go on Medicaid.

Check out the downloadable chart illustrating the various Advantage plan sign-up periods as well as a discussion of the different types of Advantage plans.

No one may sell a Medigap policy to an Advantage plan enrollee. Remember, the idea behind Medicare Advantage is that it is all “bundled.”

Medicare Part D

Medicare Part D is the drug benefit that has been around a few years. This is the home of the famous “donut hole.” Like other Medicare plans you can sign-up in the seven month window beginning three calendar months before the month of your sixty-fifth birthday and ending three calendar months after the month of your sixty-fifth birthday.

Really important: Do NOT go more than 63 days during ANY period of time after you first become eligible for Medicare without being in a Part D plan or having other “creditable coverage.” If you do, you’ll pay a premium penalty of about $.32 for every month that you went without coverage when you try to sign-up again. If your other drug coverage is “creditable coverage” you’ll know – they have to tell you in writing if it is.

Generally speaking, if you’re in a Part D plan, you’ll be stuck with it until the next Open Enrollment Period rolls around, and at that time you can make changes effective for the first of the year. There are exceptions, however, in case you move out of the coverage area, lose other “creditable coverage” or move to a nursing home.

I have not left out Part D drug plans . . . you may download a Part D enrollment period chart on this site.

So Here We Are . . .

In the middle of the 2012 Open Enrollment Period. If you are happy with your coverage, ignore all the commercials. If you are in an Advantage plan and not very happy, or if you are in original Medicare and are thinking about an Advantage plan, then do some comparison shopping. Do not take the first sales pitch that comes along.

Here is a Neat Trick: Go to www.medicare.gov/find-a-plan for a great comparison shopping tool. It works for both Part C Advantage plans and for Part D drug plans. It is easy to use.

And Here is Another Neat Trick . . .

Beginning December 8, 2011, you can switch out of a Medicare Advantage Plan or Drug Plan anytime as long as you are switching to a 5-Star Plan. Medicare has begun collecting consumer health care provider input to rate plans. 5-Star Plans are the top of the heap. The idea is that the more lowly starred or unstarred plans will be a bit more customer friendly if they know you can walk at anytime. It will be interesting to see how that works.

In a nutshell:

• Part C Advantage Plans replace Original Medicare Part A and Part B.
• You may have either Parts A and B or Part C, but not both.
• If you stick with Original Medicare, you should stick with a good Medigap policy.
• If you drop (or fail to sign-up for) a Medigap plan anytime after you enrolled in Part B, you may have to pay more premiums based on your health (and may even be denied coverage).
• You may have a Part D drug plan with either Parts A and B or with Part C (although many Advantage plans have a drug plan “built in”).
• Do NOT go more than 63 days without a Part D drug plan or other “creditable coverage” if you want to avoid a penalty.

Download these handy charts (they’ll help you through the maze):

Part A and Part B Enrollment Calendar and Medigap Plan Type Grid

Part C (Medicare Advantage) Enrollment Calendar and Plan Type Grid

Part D Drug Plans Enrollment Calendar

 

DID YOU LIKE THIS ARTICLE? SIGN-UP FOR ELDER LAW UPDATE RIGHT HERE AND GET A GREAT, NEWSY NEWSLETTER EVERY MONTH. USEFUL INFO, INTERESTING READING, THE OCCASIONAL CHUCKLE.

Times are tight. The health care debate was strangely silent with respect to financing long term care for those elderly with chronic diseases. But do not be deceived. It will not be long before Medicaid nursing home rules come under the knife.

As an elder law attorney, I offer a solution so radical that many of my colleagues and clients will stand aghast. Scrap the Medicaid nursing home rules! The system is a mess. But let us “scrap intelligently.”

Like it or not Medicaid has become a middle class nursing home financing system. Not out of greed, but out of necessity.

The last attempt Congress took at “reforming” the Medicaid rules, they simply came up with more complex rules and “kicked the can down the road.”

Our standard approach to political problem solving is part of the problem. Namely, too much “either-or” thinking, and not enough “and” thinking.

The Current System

According to Prudential’s Long Term Care Cost Study 2010 nursing home costs can easily approach $70,000 annually in North Carolina and Georgia. Also, the annual out-of-pocket costs for a family caregiver can be huge, not to mention a heavy burden in physical, mental and emotional pain. Altered work schedules, depression and stress can cost employers billions in lost productivity.

Long term care insurance, until a few years ago, was not a viable alternative. That market is just now maturing. Even then, the coverage can be expensive on a tight budget. In any event, many are not insurable.

The existing Medicaid-based system offers fairly comprehensive coverage for the poor, but for the middle class the problem with the current system is that they are – well – middle class. To become eligible, people must impoverish themselves. That comes easily enough after a year or two in a nursing home.

“Either” The Private Option –

Proposals to enhance private insurance would largely leave the current structure in place. That does little to relieve the current insurance underwriting standards and the fiscal pain of either privately paying or qualifying for Medicaid.

Also, if Medicare Advantage plans are any indication of the magic elixir of private insurance, we cannot be encouraged. Uncle Sam spends 20% more on each Medicare Advantage beneficiary and then complains the Medicare system is going broke.

“Or” The Universal Healthcare Option –

Simply replace the current welfare-based system with social insurance. The program could be managed as a new Medicare benefit or though a new independent, quasi-government entity.

While attractive to some, the loss of choice, the expense of another huge bureaucracy, possible rationing of care and dictating more rules and regulations is mind-boggling. Cup of “tea,” anyone?

The “And” Approach

Why not a hybrid public-private system?

Scrap or greatly limit Medicaid coverage. Grandfather-in those who are currently uninsurable. Allow private insurers to offer standardized long term care insurance coverage (similar to the way Medigap policies are offered – which makes comparison shopping easier). To make private insurance more affordable and reduce the need for underwriting, require a mandatory beginning age and require insurers to accept all buyers without underwriting (again, similar to Medigap policies). Make Medicaid a painful alternative for those who simply elected to skip the affordable premiums when they had their chance.

The Community Living Assistance Services and Support Act (the “CLASS Act”) signed by President Obama last March contains a few of the features I outlined above, but has a few significant drawbacks, even after it kicks in during 2012. I will post a summary of the CLASS Act in the near future.

Any solution, it seems, must provide some mix of public and private financing to be politically and economically palatable.

This particular system is most definitely broken, so let’s fix it . . . intelligently.

Updated October 2011

Medigap insurance supplements Medicare’s benefits, which is why it is also called Medicare supplemental insurance. Both federal and state laws regulate Medigap coverage. A policy must be clearly identified as Medicare supplemental insurance and it must provide specific benefits that help fill the gaps in your Medicare coverage. Other kinds of insurance may help you with out-of-pocket health care costs, but they do not qualify as Medigap plans.

Standard Medigap Plans

There are now ten standard Medicare supplement insurance plans that help pay some of your costs in the original Medicare plan and for some care it doesn’t cover.

Each one of the standard Medicare Supplement insurance plans, labeled A through N (I know, I know . . . I said there are ten plans and A through N equals 14 letters . . . there are no longer E, H, I and J plans), offers a different set of benefits, fills different “gaps” in Medicare coverage, and varies in price. Some insurance companies offer a “high deductible option” on Medicare supplement insurance Plans F, and higher coinsurance amounts for some services in Plans K and L. All Medicare supplement insurance Plans must cover certain basic benefits. (Plans K and L are recent additions and very few supplemental Medicare insurers are offering those plans). Current Medicare rates are also posted elsewhere on this site.

• Basic Benefits
  • Covered by Medicare Supplement Insurance Plans A-N
• Medicare Part A Hospital Deductible
  • $1,132 in 2011 for each benefit period for hospital service
  • Covered by Medicare Supplement Insurance Plans B-G and Plan N (Plans K and M cover 50% and Plan L covers 75%)
• Skilled Nursing Home Costs
  • Your cost ($141.50 in 2011) for days 21-100 in a skilled nursing home
  • Covered by Medicare Supplement Insurance Plans C-G, M and N (plan K covers 50% and Plan L 75%)
• Medicare Part B Deductible
  • Yearly deductible for doctor services ($162 in 2011)
  • Covered by Medicare Supplement Insurance Plans C and F
• Medicare Part B Coinsurance
  • Generally 20% of services
  • All Plans (Plan K 50% – Plan L 75% – Plan N $20 office visits $50 ER visits)
• Medicare Part B Excess Charges
  • The difference between your doctor’s charge and the Medicare approved amount, if your doctor does not accept assignment.
  • Covered by Medicare Supplement Insurance Plans F (100%) and G (80%)
• Foreign Travel Emergency
  • 80% of the cost of emergency care outside the U.S.
  • Up to $50,000 in your lifetime
  • You pay a yearly deductible of $250
  • Covered by Medicare Supplemental Insurance Plans C-G, M and N

* If you choose the “high deductible option” on Medicare supplement plans F, you will first have to pay a $2,000 before the plan pays anything. This amount can go up every year. High deductible option policies often cost less, but if you get sick, your costs will be higher.

*Plans K and L provide for different cost-sharing for items and services than Plans A through J. Once you reach the annual limit ($4,640 for Plan K and $2,320 for Plan L), the plans pay 100% of the Medicare co-payments, coinsurance, and deductibles for the rest of the calendar year. The out-of-pocket annual limit does NOT include charges from your provider that exceed Medicare-approved amounts, called “Excess Charges.” You will be responsible for paying excess charges. the out-of-pocket annual limit will increase each year for inflation.

Insurance companies must use the same format, language and definitions when describing the benefits of each of the Medigap plans. They also must use a uniform chart (similar to the chart posted with this article) and outline of coverage to summarize the benefits. The idea is to make it easier for consumers to compare policies. As you shop for a Medigap policy, keep in mind that each company’s products are alike, so they are competing on service, reliability and price. Talk to your friends, neighbors, doctor and others who may have experience and an opinion.

Unlike some types of health coverage that restrict where and from whom you can receive care, Medigap policies generally pay the same supplemental benefits regardless of your choice of health care provider. If Medicare pays for a service, wherever provided, the standard Medigap policy must pay its regular share of benefits.

Medigap Premiums

Although the benefits are identical for all Medigap plans of the same type, the premiums may vary greatly from one company to another and from area to area. Insurance companies use three different methods to calculate premiums: issue age, attained age and no age rating.

If your company uses the issue age method, and you were 65 when you bought the policy, you will always pay the same premium the company charges people who are 65 regardless of your age. If it uses the attained age method, the premium is based on your current age and will increase as your grow older. Under the no age rating, everyone pays the same premium regardless of age. Your state insurance department must approve the rates charged for all Medigap policies. The insurance company can raise your premiums only when it has approval to raise the premiums for everyone else with the same policy.

Medicare SELECT

Another Medicare supplemental health insurance product called “Medicare SELECT,” is permitted to be sold by insurance companies or managed care plans throughout the country. Medicare SELECT is the same as standard Medigap insurance in nearly all respects. If you buy a Medicare SELECT policy, you are buying one of the standard Medigap plans. The only difference between Medicare SELECT and standard Medigap insurance is that each insurer has specific hospitals, and in some cases specific doctors, that you must use, except in an emergency, in order to be eligible for full benefits. Medicare SELECT policies generally have lower premiums because of this requirement.

When you go to the insurer’s “preferred providers,” Medicare pays its share of the approved charges and the insurer is responsible for the full supplemental benefits provided for in the policy. In general, Medicare SELECT policies are not required to pay any benefits if you do not use a preferred provider for non-emergency services. Medicare, however, will still pay its share of approved charges regardless of the provider you choose.

Medicare SELECT is authorized for sale until at least June 1998. At that time, if you have a Medicare SELECT policy, you will be able to either keep the SELECT policy with no changes in benefits or regardless of the status of your health, purchase another Medigap policy offered by the insurer, if the insurer issues Medigap insurance other than Medicare SELECT. To the extent possible, the replacement would have to provide similar benefits.

Open Enrollment Guarantees Your Right To Medigap Coverage

State and federal laws guarantee that for the first 6 months after the date you are both enrolled in Medicare Part B and age 65 or older, you have a right to buy the Medigap policy of your choice regardless of any health problems you may have. If, however, your birthday falls on the first day of the month, your Part B coverage (if you buy it) begins on the first day of the previous month, while you are still 64. Your Medigap open enrollment period would also begin at that time.

During this 6-month open enrollment period, you can buy any Medigap policy sold by any insurer doing Medigap business in your state. The company cannot deny or condition the issuance or effectiveness, or discriminate in the pricing of a policy because of your medical history, health status or claims experience. The company can, however, impose the same preexisting condition restrictions that apply to Medigap policies sold outside the open enrollment period. Preexisting conditions are generally health problems for which you saw a doctor within the 6 months before the date that the policy went into effect. Your Medicare card shows the effective dates for your Part A and/ or Part B coverage. To figure whether you are in your Medigap open enrollment period, add 6 months to the effective date of your Part B coverage. If the date is in the future and you are at least 65, you are eligible for open enrollment. If the date is in the past, you are generally not eligible. (If you were entitled to Medicare before age 65, see the following section on open enrollment and persons with disabilities.)

If you are covered under an employer group health plan when you become eligible for Part B at age 65, carefully consider your options. Once you enroll in Part B, the 6-month Medigap open enrollment period starts and cannot be extended or repeated.

If you are covered under an employer plan that is primary to Medicare in paying your medical bills, you will not need a Medigap plan until you are no longer covered under the employer plan. If you begin buying Part B as a supplement to your employer plan while it is the primary payer, you will start your Medigap open enrollment period when it is of little use to you.

You may, therefore, want to wait to buy Part B until you are ready to make optimum use of your Medigap open enrollment period. Also keep in mind that if you have already triggered your Medigap open enrollment period at age 65, you cannot get another one by dropping Part B and re-enrolling during a special enrollment period after you are no longer covered under the employer plan.

Medigap Open Enrollment and the Persons With Disabilities

If you become eligible for Part B benefits before age 65 because of a disability or permanent kidney failure, federal law guarantees you access to the Medigap policy of your choice when you reach age 65. During the first 6 months you are age 65 and enrolled in Part B, you can buy the policy of your choice regardless of whether you had enrolled in Part B before you were 65.

During these 6 months, you cannot be refused a policy because of your disability or for other health reasons. Moreover, you cannot be charged more than other applicants, which can greatly reduce the amount you are paying. A waiting period of up to 6 months, however, may be imposed for coverage of a pre-existing condition.

Several states go beyond federal law and require at least a limited open enrollment for Part B beneficiaries under 65. Check to see whether your state does. In addition to any state requirement, federal law requires that you be given an open enrollment opportunity when you turn 65, even if you were previously entitled to open enrollment under state law.

Guaranteed Renewable

All standard Medigap policies are guaranteed renewable. This means that the insurance company cannot refuse to renew your policy unless you do not pay the premiums or you made material misrepresentations on the application. Older Medigap policies (sold before 1992) may allow the company to refuse to renew on an individual basis. These older policies provide the least permanent coverage.

Older Medigap Policies

Many federal requirements do not apply to Medigap policies sold before 1992, when Medigap was standardized. There is generally no requirement that you switch to one of the standard plans if you have an older policy. However, you may be required to switch if your older plan was not guaranteed renewable and the company discontinues the type of policy you have. Check with your state insurance department to find out what state-specific requirements are in force.

Switching Medigap Policies

Even if you are not required to convert an older policy, you may want to consider switching to one of the standardized Medigap plans if it is to your advantage and an insurer is willing to sell you one. If you do switch, you will not be allowed to go back to the old policy. Before switching, compare benefits and premiums, and determine if there are waiting periods for any of the benefits in the new policy. Some of the older policies may provide better coverage, especially for prescription drugs and extended skilled nursing care. On the other hand, older Medigap polices, which cannot be sold to new applicants, may experience greater premium increases than newer standardized policies that can enroll new applicants (younger, healthier policyholders whose better claims experience will help to moderate premiums).

If you have had a Medigap policy for at least 6 months and you decide to switch, the replacement policy generally cannot impose a waiting period for a preexisting condition. If, however, a benefit is included in the new policy that was not in the old policy, a waiting period of up to 6 months–unless prohibited by your state–may be applied to that particular benefit.

You do not need more than one Medigap policy. If you already have a Medigap policy, you must sign a statement when you buy another indicating that you intend to replace your current policy and will not keep both policies. However, do not cancel the old policy until the new one is in force and you have decided to keep it.

Use the “Free-Look” Provision

Insurance companies must give you at least 30 days to review a Medigap policy. If you decide you don’t want the policy, send it back to the agent or company within 30 days of receiving it and ask for a refund of all premiums you paid. Contact your state insurance department if you have a problem getting a refund.

Carrier Filing of Medigap Claims

Under certain circumstances, when you receive medical services covered by both Medicare and your Medigap insurance, you may not have to file a separate claim with your Medigap insurer in order to have payment made directly to your doctor or medical supplier.

By law, the Medicare carrier that processes Medicare claims for your area must send your claim to the Medigap insurer for payment when the following three conditions are met for a Medicare Part B claim:

• Your doctor or supplier must have signed a participation agreement with Medicare to accept assignment of Medicare claims for all patients who are Medicare beneficiaries;
• Your policy must be a Medigap policy; and
• You must instruct your doctor to indicate on the Medicare claim form that you wish payment of Medigap benefits to be made to the participating doctor or supplier. Your doctor will put your Medigap policy number on the Medicare claim form.

When these conditions are met, the Medicare Carrier will process the Medicare claim, send the claim to the Medigap insurer and generally send you an Explanation of Medicare Benefits (EOMB) or Medicare Summary Notice (MSN). Your Medigap insurer will pay benefits directly to your doctor or medical supplier and send you a notice that it has done so.