Day 3 Medicare Supplement Insurance (Medigap)

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Day 3Medicare Supplement Insurance (Medigap)
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Review
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Medicare

• 4 parts of Medicare
• Part A Hospital Insurance
• Part B Medical Insurance
• Part C Medicare Advantage Plans
• Part D Prescription Drug Coverage
• Part A B Original Medicare
• Automatic enrollment if getting SS benefits, must
  enroll if not
• Premiums always for Part B, only for A if not
  enough credits
• Not comprehensive coverage, has coverage gaps
• Out-of-pocket costs for A B change yearly- see
  chart

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Medicare Part A (Hospital Insurance)

• Part A Covers
• Inpatient hospital care
• Care in a skilled nursing facility (SNF)
• Home health care
• Hospice care
• Blood

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In-Patient Hospital Coverage

• Covered days in a hospital
• 90 renewable days
• Medicare pays 100 for days 1-60 in a benefit
  period AFTER beneficiary pays Part A deductible
• Daily co-payment for days 61-90 in a benefit
  period
• 60 non-renewable days
• Daily co-payment for days 91-150 (lifetime
  reserve days)

• A benefit period is a period of time that
  Medicare pays for a persons care in a hospital
  or SNF. It begins when a beneficiary goes into
  the hospital and ends when she/he has been out of
  the hospital or skilled nursing facility for 60
  consecutive days

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Medicare Part B (Medical Insurance)

• Physicians services
• Out-patient hospital services
• Durable medical equipment
• Prosthetics, orthotics, and supplies
• Ambulance
• Home health care (if not Part A)
• Blood (if not Part A)

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Physician Services

• Physicians services covered
• Exams
• DOES NOT include routine annual physicals
• Welcome to Medicare Exam
• 1x only exam within first 12 months of joining
  Part B
• Annual Wellness Visit
• Discussion with doctor to develop prevention plan
  to improve health, routine measurements height,
  weight, blood pressure
• Medical and surgical procedures, anesthesia,
  diagnostic tests and procedures
• Radiology and pathology services (in or out of
  the hospital)

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Physician Services

• Physicians services NOT covered
• Most routine physical exams and tests related to
  such exams
• Most routine foot care
• Exams for the fitting of hearing aids
• Exams for eyeglasses (except cataract related)
• Most routine dental care or false teeth

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Ambulance Coverage

• Medicare covers ambulance service when transport
  in another vehicle would endanger health
• Will pay for transport from home to hospital/SNF
  or from hospital/SNF to home
• Medicare will NOT pay for ambulance used as
  routine transportation

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Medicare Advantage

• Type of Medicare health plan offered by a private
  company that contracts with Medicare to provide a
  beneficiary with their Part A B benefits
• One way for a beneficiary to get additional
  Medicare coverage to cover the gaps in Original
  Medicare
• The plan must offer Part D drug coverage
  members who want drug coverage may only take drug
  plan offered by the Medicare Advantage plan
• If enroll in stand alone PDP, will be
  dis-enrolled from Part C and returned to Original
  Medicare

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Medicare Advantage

• Eligibility requirements
• Have Medicare Part A Part B and must pay Part B
  premium
• Cannot have ESRD (except if have coverage with a
  non-Medicare plan from the same company prior to
  being diagnosed)
• Must live in the plans service area
• Cannot be out of plans service area for more
  than 6 consecutive months
• Automatic disenrollment when changing Medicare
  Advantage Plans
• Dont need to call plan

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Medicare Advantage

• 4 Enrollment Periods
• Initial Same as Part B (7 months around
  birthday)
• Open Oct. 15th-Dec 7th (effective Jan 1st) can
  change from,
• Original Medicare to Medicare Advantage Plan
• Medicare Advantage plan to Original Medicare
• Medicare Advantage plan to another Medicare
  Advantage Plan
• Upgrade to include Medicare Prescription Plan
  coverage
• Downgrade to exclude Medicare Prescription Plan
  coverage
• Special Various qualifying events
• MADP Jan 1st Feb 14th. Can leave plan and
  return to Original Medicare
• Cannot move to another MA plan during this period

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Medicare Advantage

• Plan types
• HMO (Health Maintenance Organization)
• Lower premium managed care plan, must stay in
  network
• HMO-POS (HMO with Point-of-Service option)
• HMO plan but can use out of network providers
• PPO (Preferred Provider Organization)
• Can use out of network providers for extra cost
• SNP (Special Needs Plan)
• Comprehensive program of medical care with
  membership limited to certain groups
• PFFS (Private-Fee-For-Service)
• Use providers who accept plan, pay extra for
  extra benefits

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Quick ReferencePros of Medicare Advantage Plans

• Medicare Advantage Plans tend to attract people
  who are not high utilizers of medical services.
  They also attract people who want a lower premium
  plan
• Pros
• Convenience of having only one plan (drug plan
  can be included
• More choices available (HMOs, HMO-POSs, PPOs)
• Lower premiums than Medigap plans
• Potential for better coordination of care (HMOs
  provide this)
• Additional benefits such as hearing, dental,
  vision and annual exams

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Medicare Supplement Insurance (Medigap)
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Examples of Gaps in Medicare

• Part A gaps
• In-patient hospital deductible
• Daily co-payment for in-patient hospital days
  61-90
• Daily co-payment for in-patient hospital days
  91-150
• Daily co-payment for SNF days 21-100
• Part B gaps
• Annual deductible
• Co-insurance (usually 20)
• First three pints of blood
• Coverage outside the United States

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Medigap

• Medicare Supplement Insurance (referred to as
  Medigap)
• Special kind of health insurance coverage
  developed to provide extra coverage beyond
  Medicare by filling some of the gaps in Medicare
  coverage
• Offered by private insurance companies (not the
  federal govt)
• A Medigap policy is different from a MA plan MA
  plans are ways to get Medicare benefits. A
  Medigap policy acts as a secondary policy to
  cover the costs of Original Medicare benefits
• Not all products that help cover Medicare
  out-of-pocket costs are Medigap policies (i.e.
  Retiree Plans, MassHealth)
• Prescription coverage NOT included if a
  beneficiary wants prescription drug coverage,
  must join a Medicare Prescription Drug Plan

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Medigap Features

• Medigap Features
• No networks, can go to any doctor that accepts
  Medicare
• Generally, Medigap policies pay only after
  Medicare pays first (exception foreign travel)
• Coverage is standardized to make policies easier
  to compare

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Consumer Protection

• Consumer protections
• Outline of coverage must be provided
• Free Look Can return policy for full refund
  within 30 days if not used
• Illegal to be sold more than one Medicare
  Supplement (upgrade if need more coverage)

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Medigap Background

• Legislation enacted under the Medigap Reform Law
  Act of 1990 (also known as OBRA 90) established
  uniform regulations for Medicare
  Supplement/Medigap Insurance in every state
• Every state, except MA, WI and MN, was required
  to adopt the 10 standard benefit packages and
  label them plans A-J
• All Medigap policies and text are standard for
  all insurers, basic benefits are the same but
  some plans may offer additional benefits and
  prices may differ
• OBRA law did not affect policies already in
  force, i.e. they did not have to come into
  compliance to be one of the new types of policies
  (ex Supplement Two plan in MA)

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Medigap in Massachusetts Special Features

• Special features of Medigaps in MA
• No waiting period for pre-existing conditions
  (federal law allows up to six months)
• Guarantee issue (cannot deny coverage based on
  age, health, past claims)
• Exception is ESRD for under 65
• Policies guaranteed renewable (except in case of
  non-payment or misrepresentation)

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Medigap in MassachusettsEligibility

• Must be enrolled in Medicare Parts A and B
• Under age 65 Medicare beneficiaries with
  disabilities can enroll at any time during the
  year during continuous open enrollment (see next
  slide)
• Beneficiaries with End Stage Renal Disease
  (ESRD)
• 65 Can apply anytime
• Under 65 Massachusetts Medigap companies NOT
  REQUIRED to sell to beneficiaries under age 65
  with ESRD
• Insurers may decide to provide coverage to
  persons under 65 with ESRD, but are not required
  to do so

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Medigap in MassachusettsOpen Enrollment

• Continuous Open Enrollment
• Massachusetts Medigap companies currently offer
  continuous open enrollment allowing beneficiaries
  to join or change companies or coverage at any
  time
• Medicare beneficiaries in other states can
  purchase a Medigap policy during one of the
  federally-regulated Medigap enrollment periods

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Changing Medigap plans

• Beneficiaries must call their existing Medigap
  plan to dis-enroll when changing Medigap plans
• No automatic disenrollment like with Medicare
  Advantage Plans
• Must call new Medigap plan to enroll

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Medigap in Massachusetts Policies

• Medigap policies in Massachusetts
• All Medigap policies sold in MA must include
  certain Basic Benefits (minimum package of
  benefits allowed by law)
• All private Medigap companies must offer the 2
  standardized plans available in Massachusetts
• 2 standardized Massachusetts plans
• Core Basic Benefits package
• Supplement One (Medex Bronze) Basic Benefits
  with additional benefits
• Supplement Two (Medex Gold) No longer being
  sold but can still be held by beneficiaries

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Core

• Massachusetts Core policy
• Core offers the following Basic Benefits
  coverage
• Part A daily co-payment fro hospital days 61-90
• Part A daily co-payment for hospital care days
  91-150
• 100 Part A eligible expenses beyond 150 days to
  a maximum of 365 additional lifetime days
• Part B co-payment (usually 20)
• First 3 pints of blood
• Additional 60 days per year in a licensed mental
  health hospital

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Supplement One

• Massachusetts Supplement One policy
• In addition to the Basic Benefits coverage
  offered by Core, Supplement One offers the
  following additional coverage
• Part A deductible
• Skilled Nursing Facility co-payment days 21-100
• Part B deductible
• Foreign travel (some CORE plans also offer this)

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Core Supplement One Benefits
MEDIGAP BENEFITS MEDIGAP POLICIES MEDIGAP POLICIES
MEDIGAP BENEFITS CORE SUPPLEMENT ONE
Basic benefits Yes Yes
Part A inpatient hospital deductible No Yes
Part A skilled nursing facility coinsurance No Yes
Part B deductible No Yes
Foreign travel emergency No Yes
Inpatient days in mental health hospitals 60 days per calendar year 120 days per benefit year
State-mandated benefits (yearly Pap tests and mammograms. Check plan for other state-mandated benefits.) No Yes
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Supplement Two Plan

• Policy no longer sold in Massachusetts
• As of 2006, policy no longer being sold but
  beneficiaries are allowed to keep policy if
  bought prior to this date
• Premium very high due to decreased beneficiary
  base
• Offers prescription coverage which IS considered
  creditable
• If beneficiary drops policy, cannot enroll again
• If beneficiary drops policy and wants Part D
  coverage, must enroll in Part D during Open
  Enrollment Period (no SEP)

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Cost

• All policies have monthly premium
• Premium varies by policy and company
• Premium usually increases slightly annually - MA
  requires premiums to be approved by the Division
  of Insurance, loss ratio determines if increase
  is approved and hearing required for increases
  gt10
• MA requires premiums to be the same for all
  consumers, regardless of age (not in other
  states)

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Counseling Beneficiaries Is A Medigap Needed?

• Does every Medicare beneficiary need a Medicare
  Supplement?
• Questions to ask beneficiary
• Does she/he understand the gaps in Medicare
  coverage?
• Does she/he have other coverage to help pay for
  out-of-pocket costs associated with Medicare?
  (Medicare Advantage Plan, Retiree Coverage,
  MassHealth)
• Can she/he afford to purchase supplemental
  coverage? (screen for Public Benefit programs)

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Counseling BeneficiariesChoosing a Policy

• What beneficiaries should consider when choosing
  a policy
• Benefits Choose a plan type (Core vs. Supp 1)
• Premiums Benefits are almost identical from
  company to company
• Reputation, reliability, financial status, and
  customer service of companies

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Quick ReferencePros of Medigap Policies

• Medigap policies tend to be bought by people
  with a high utilization of medical services such
  as doctors and hospital services. These policies
  are also popular amongst individuals who travel
  in foreign countries and who like to be able to
  choose which doctor they see without a referral
• Pros
• Can see any provider that accepts Medicare (no
  networks)
• No referrals or PCP is needed
• Continuous open enrollment periods
• Low to no co-pays or deductibles
• Many policies offer travel coverage
• All policies standard only 2 types of policies
  so choosing policy is easier
• ESRD 65 can join a Medigap policy

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Medigap vs.Medicare Advantage
Original Medicare Medigap Supplement 1 Medicare Advantage Plan
Higher premiums but no co-pays Generally lower premiums but has co-pays
Freedom to choose doctors May be restricted to network
No referrals necessary May need referrals for specialists
Some routine services not covered (vision, hearing) May include extra benefits (vision, hearing, fitness)
Covered anywhere in US Emergency services ONLY outside service area
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Two Options For Supplementing Medicare
Step 1 Decide how you want to get your coverage
MEDICARE ADVANTAGE PLAN
ORIGINAL MEDICARE
OR
PART B Medical Insurance
PART A Hospital Insurance
PART C Combines Part A, Part B and usually Part D

Step 2 Decide if you need a Prescription Drug
Plan
PART D Stand Alone PDP
PART D Included in Part C
Step 3 Decide if you need to add supplemental
medical coverage
END If you join a Medicare Advantage Plan with
drug coverage (MAPD), you cannot join another
drug plan and you dont need and cannot be sold a
Medigap policy
MEDIGAP Supplement Core or Supplement 1 plan
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Medigap Review

• Review
• What is a Medigap policy?
• Who can buy a Medigap policy?
• When can someone buy a Medigap policy?
• Can a Medicare beneficiary under age 65 buy a
  Medigap policy?
• Can a Medicare beneficiary with ESRD buy a
  Medigap policy?
• Does a Medigap policy pay everything Medicare
  does not pay?

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Medigap Review

• Review
• What Medigap policies are sold in Massachusetts?
• What companies sell Medigap policies in
  Massachusetts?
• What Medigap policies are sold in other states?
• Does every Medicare beneficiary need a Medigap
  policy?
• Do Medigap and Medicare Advantage pay for the
  same things?
• Is Medicare Advantage (Medicare HMO or PPO)
  better than original Medicare plus Medigap?

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Medigap Quiz

• What Medigap plans are currently sold in
  Massachusetts and what do they cover?
• When Clarence retired in 2004, he purchased a
  Medigap Supplement 1 Plan. He didnt join a
  Medicare Part D plan during the initial open
  enrollment because he was not taking any
  medication. He recently had a check up with his
  physician and was given a medication which will
  cost 300 per month. Clarences friend told him
  that he was smart not to have joined a Medicare
  drug plan as he can get his drugs from Canada.
  His friend said he would have had to pay a
  monthly premium for the Medicare drug plan and it
  would have wound up costing more than getting his
  drug from Canada.
• What information would you give him?

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Medigap Quiz, cont.

• Mr. Black has a Supplement 2 Plan. His premium
  will be increasing on June 1. He says he cannot
  afford to pay the premium. He explains that he
  has dipped into his savings over the years to
  help pay his health care costs. He wants to know
  what other options are available to him. He tells
  you that he takes 5 different medications and
  needs prescription coverage.
• What questions would you ask and how would you
  assist him?
• What time of year can a Medicare beneficiaries
  purchase a Medigap plan?
• What benefits do the two Medigap plans have in
  common?

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Case Study 1Gail Storm

• Gail meets with you at the SHINE office on April
  1st. Gail purchased a Medicare Supplement 2 Plan
  when she first became eligible for Medicare. She
  tells you that the premium has increased. It is
  now almost 700 per month and she cannot afford
  it. She explains that she takes several
  medications for which she needs coverage. She
  also wants health insurance coverage that will
  allow her to stay with her current doctors.
• What information would you give her?

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Case Study 2Ms. Penny Wise

• Ms. Wise meets with you at the SHINE office. She
  is retiring from her job at the Pound Bank. She
  has been to Social Security and signed up for
  Medicare A B. She now wants to know about
  Medigap insurance. She says that her company will
  be giving her health insurance after her
  retirement, but she tells you that one can never
  have too much insurance.
• How would you assist her?

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Case Study 3Mr. Hale N. Hardy

• While in Florida on vacation, Mr. Hardy, who has
  Medicare A B and a Blue Cross/Blue Shield
  Medicare Supplement 1 Plan, broke his arm and was
  taken to the hospital. Dr. Grim, who does not
  accept Medicare assignment, set Mr. Hardys arm.
  Mr. Hardy returned to Dr. Grims office for
  follow-up treatment. After Mr. Hardy returned
  home, he received a bill from the doctor. Mr.
  Hardy came to see you because he doesnt
  understand why he received the bill and tells you
  he has never had to pay additional money before.
• Why is Mr. Hardy being charged an additional
  amount of money?
• How would you assist him?

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Case Study 4Sol Emm Vow

• Sol and his wife Emm have both been on Medicare A
  B since they turned 65 in 2006. He is currently
  working for a company hes been with for the past
  19 years, but expects to be let go in the next
  month. His company has been buying Blue
  Cross/Blue Shield Medex Gold plans for both of
  them since they became eligible for Medicare. Sol
  says he will not be able to afford the monthly
  premiums for Gold once the employer stops
  covering. He wants to know what affordable plans
  are available.
• Sol takes several expensive medications which
  would cost over 1,000/month if he had to
  purchase them. Emm takes two generics. Their
  current combined monthly income is 4,200/month.

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Case Study 5Mr. Wayne Scoat

• Mr. Wayne Scoat meets with you at the SHINE
  office. Mr. Scoat tells you he enrolled in Blue
  Cross/Blue Shields Medicare Supplement 2 (Medex
  Gold) in June of 2005 when he became eligible for
  Medicare because he had high prescription costs.
  He is now taking only one inexpensive medication
  and is paying for a benefit he is not using. A
  friend told him he will have to wait for the
  annual open enrollment before he can make a
  change.
• The friend also told him he will pay a penalty if
  he enrolls in a Medicare Prescription Drug Plan
  (Part D). He wants to know if he has any other
  options.
• How would you help him?

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Case Study 6Mr. Peter Pan

• Mr. Pan meets with you at the SHINE office. He
  has been on Medicare A B for the past 6 years
  with a supplemental retiree plan that includes
  prescription coverage through his former
  employer. He has been notified that his employer
  retiree insurance will be ending next month. He
  wants to know what insurance is available to him.
  He is concerned that he will not be able to get
  insurance because he was recently diagnosed with
  high blood pressure. A friend told him he will
  have to pay a penalty for not joining a Part D
  plan during the initial open enrollment period.
• How would you assist him?

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Case Study 7Paul E. Anna

• Paul calls with a question and concerns about his
  insurance. He became eligible for Medicare about
  6 months ago when he turned 65, and he joined a
  Medicare Advantage HMO Plan. He is not happy with
  the plan and wants to get into original Medicare
  and pick up a Medigap plan. His HMO told him he
  can only make a change during the annual open
  enrollment period which is several months away.
• How would you help him?

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Case Study 8Buck Ille

• Buck is 76 years old and just moved here from
  Texas. He tells you he had great coverage with an
  HMO in Texas but now needs to get something
  comparable in Massachusetts. He explains that he
  met a woman from Massachusetts, Maud, who was in
  Texas on vacation. They hit it off and he moved
  here because she wants to stay close to her
  children and grandchildren. They are getting
  married and she will soon become Maud Ille. Now
  that he has a companion they plan to do a lot of
  traveling. He wants to make sure he gets a health
  plan that will provide good coverage when he
  travels.
• How would you help him?