Medicare does not cover all health costs. There are gaps in the coverage. Some or all of these gaps can be filled by additional insurance purchased from private insurance companies. These plans are known as Medicare Supplement Insurance Plans or Medigap Plans. There are currently twelve plans available, identified by letters A through L.
Since Medicare Supplements are standardized by government regulations, all Medicare Supplement insurance companies are regulated as to what provisions and what policies they can offer. That does nott mean the prices are the same. There can be a big difference in premium costs for the same plan, depending on which insurance company you choose.
First, a little background information:
The Medicare Prescription Drug Improvement and Modernization Act of 2003 (also called the Medicare Modernization Act) was signed into law In December of 2003. Prior to this Act, Medicare did not provide for outpatient prescription drug benefits. This Act created Medicare Part D, to give access to prescription drug insurance coverage for those eligible for Medicare Part A or who were enrolled in Medicare Part B. This coverage began on January 1, 2006 and is administered by private health plans.
The Medicare Modernization Act (MMA) also encouraged the National Association of Insurance Commissioners (NAIC) to modernize the Medicare supplemental insurance marketplace. NAIC developed a revised Medigap Plan model.
On July 15, 2008, Congress enacted the Medicare Improvements for Patients and Providers Act (MIPPA) that authorized the states to put the NAIC’s changes into effect. Congress felt that Medicare Supplement plans 2023 had not kept up with some of the changes in Medicare, so the 2010 Medicare Supplement changes are, in effect, an effort to modernize the Medigap Insurance market by dropping some coverage options and adding others.
Summary of changes for 2010 Medigap plans purchased on or after June 1, 2010:
• Preventative Care will be dropped from all 2010 Medicare Supplement plans
• At-Home Recovery benefit will be dropped from all 2010 Medicare Supplement plans
• Medigap Plans E, H, I and J will no longer be available for new sales
• Two new Medigap Plans -Supplement Plan M and Supplement Plan N will be available in June 2010
• Plan G will be modified to increase excess charges from 80% to 100%
• A New Hospice Benefit will be added to all plans
• Insurance carriers will be allowed to offer plans that include New or Innovative Benefits, such as hearing aid benefits or eye wear. They may not include outpatient prescription drug benefits.
Current underwriting guidelines for these new 2010 Modernized Plans allow the application dates to be written 60 days prior to the effective date of coverage. This means that the new Plan M and Plan N can be acquired now.
The new Medicare Supplement Plan M will be standardized as is all the current plans available.
This plan uses what is known in the insurance industry as cost-sharing in an effort to reduce monthly premium costs. You would see a slightly lowered premium, but would split the cost of Medicare Part A deductible ($1,100 in 2010) with the insurance company. This means that your Part A deductible would be $550.
Medicare Supplement Plan M does not cover any of the Medicare Part B deductible. Once you meet this Part B deductible ($155 in 2010) you would not have any co-pay for doctor visits. We think this will in effect reduce this plans monthly premiums by 15% compared to the popular existing Medicare supplement Plan F premiums.
Medicare Supplement Plan M does cover the basic Core Benefits including full coverage for the Part A daily inpatient hospital coinsurance charges, all costs of hospital care after the Medicare benefit is used up, Part B coinsurance charges, the first three pints of blood, and now the Part A hospice coinsurance charges for palliative drugs and has the foreign travel emergency benefits. Hospice care is included (as it is in all Medicare Supplement Plans for 2010).
Take a close look at Plan N. From what I have learned so far, it looks to become one of the most popular plans because of its affordability. Plan N also uses cost-sharing in an effort to reduce monthly premium costs. In order to lower the monthly premium costs, unlike Plan M, Supplement Plan N uses co-pays. Co-payments for doctor visits are $20 and $50 for emergency visits. Currently the co-pay system is set to go into effect after the Medicare Part B deductible is met.
Look for Plan N as a cost effective alternative to Medicare Advantage Plans. It offers a better solution than Medicare Advantage because Plan N has no network restrictions and much lower out-of-pocket liabilities to the client.
Medicare Supplement Plan N has 100% coverage for the Part A inpatient deductible. It does not cover the Part B deductible. Insurance companies are estimating this will in effect reduce this plans monthly premiums by 30% – 35% compared to the popular existing Medicare supplement Plan F premiums.
Medicare Supplement Plan N does cover the basic Core Benefits including full coverage for the Part A daily inpatient hospital coinsurance charges, all costs of hospital care after the Medicare benefit is used up, Part B coinsurance charges, the first three pints of blood, and now the Part A hospice coinsurance charges for palliative drugs and has the foreign travel emergency benefits.