Top Five Misconceptions about Medicare and Medigap

medicare mythsMedicare can be complex – there are “parts” and “plans”, changes and updates, ins and outs that only the most experienced or devoted person could follow and understand. Moreover, there is a great deal of misinformation out there about Medicare and Medicare supplement plans, particularly this time of year as we approach the end of year annual election period. As an independent Medicare insurance and Medigap agency, we hear these misconceptions over and over. It is an uphill battle to fight against the misinformation and misunderstandings regarding Medicare and Medigap plans. But in a small way, this article may help shed some light on the top five misconceptions about Medicare.

1. “When I turn 65, I’ll get Medicare for free.”
Unfortunately, this one is not true in most cases. There is a premium associated with Medicare Part B (currently $104.90/month) that is typically paid as a deduction from your social security check. If you are not receiving Social Security, you can also pay this quarterly by receiving a bill. This amount can be higher or lower based on your income. Find out how much you will pay for Medicare Part B.

2. “The end of year enrollment period applies to Medicare supplement, or Medigap, plans.”This misconception is very prevalent this time of year, as we approach October 15, which is the start of the annual election period. Many people mistakenly believe that this end-of-the-year period also applies to Medicare Supplement, or Medigap, plans. However, that is not the case. The end-of-the-year period only applies to Medicare Advantage and Part D plans. You can actually change Medigap plans at any time but do have to qualify medically (in most states) when you do so.

3. “Medicare Advantage plans are a type of Medicare supplement.”Medicare Advantage plans are completely independent of and different from Medicare supplement plans. On the contrary, they take the place of Medicare A & B, whereas supplement plans (also called Medigap) “supplement” Medicare. If you opt on to a Medicare Advantage plan, which is a privatized version of Medicare, instead of Medicare itself, you can go back to having Medicare during the annual election period, but to get a Medicare supplement, you generally would have to qualify medically.

4. “Medicare does not cover any preventive care.”This one was more true in the past than it is now. Medicare does now provide coverage for a good bit of preventive care (much of this is relatively new). Here is a breakdown we did previously of some of the more common preventive care that Medicare does cover. Most importantly, Medicare does cover a “welcome to Medicare” physical when you turn 65 and also an annual wellness check-up.

5. “I need to find out if my doctor takes this Medigap plan (or the related misconception of, “I am going to ask my doctor which Medigap plans pay him faster or more”)This misconception is easily understood, when you consider that it is rooted in (for most people) years of worrying if their insurance is paying their claims in full or quickly enough. However, these concerns do not carry over to “over-65” insurance, at least if you are talking about Medicare and a Medigap plan. For Medigap plan, claims are paid through the Medicare “crossover” system. And, they are paid in the same amount on the same time schedule, regardless of which company you have for your Medigap carrier. Additionally, Medigap plans do not have networks – if a doctor takes Medicare, they are required to take the standardized Medigap plans.

While there is a lot to decipher and understand related to Medicare and Medigap plans, it is crucial to your health and financial well-being to do so. If you have any questions about this information or wish to further discuss Medicare and Medigap plans, you can contact us online or call us at 877.506.3378.

Medigap vs. Medicare Advantage – What Are the Differences?

Medigap vs. Medicare Advantage – which option is right for you? This is certainly a topic that
has been covered extensively before, but with medigap vs. medicare advantagethe end-of-year annual election period coming up, it is a good time to revisit the distinguishing characteristics of these plans. To do that, we’ve broken it down into four overarching areas in which the two types of plans are different.

If you aren’t familiar with the terminology, Medigap plans, or Medicare Supplements as many people call them, are plans sold by private insurance companies that fill in the ‘gaps’ in Medicare. They act secondary to Medicare’s primary coverage.

Medicare Advantage, on the other hand, are not Medicare supplements. They do not supplement Medicare; on the contrary, they take the place of Medicare as primary coverage. They are sold through private insurance companies, but they are regulated by and approved (annually) by the Centers for Medicare and Medicaid Services (CMS).

So, how do these two types of Medicare cover differ?

Usability
Plan usability is, and should be, at the forefront of any decision you make about a Medicare plan. Some doctors/hospitals have chosen to not participate in either Medicare or Medicare Advantage plans (or in some cases, both). That said, Medicare can be used anywhere nationally that takes Medicare, so there is not an actual network. Whereas with Medicare Advantage plans, there is a contractual network in most cases, and the networks are regionally based typically. Overall, there are significantly fewer problems using a Medigap plan in terms of doctors taking the plan or where you can use the plan. If your doctor takes Medicare, they are required to take the Medigap plan that you have.

Coverage
Moving on to coverage, Medigap plans are considerably more comprehensive than Medicare Advantage plans, as far as coverage goes. The top level of Medigap plan pays everything that Medicare A & B do not cover. Medicare Advantage plans use a system of co-pays and deductibles.

Premium
That brings us to premium. Medicare Advantage plans, while they are lower coverage, do also have lower premiums. In some cases, the premiums are even $0 (they use the Medicare Part B premium, which you still have to pay, to offset the costs for the private insurance company). Medigap premiums range widely, depending on your age, zip code, and in some cases, health status.

Future
The future of Medicare plans, in general, is something that has caused much anxiety for people who are over 65 or will be on Medicare soon. While there has been much debated in the last several years regarding Medicare and Medicare supplement plans, the majority of aspects of Medicare/supplement plans have not changed. Medigap really has not been touched at all, other than a 2010 restructuring of the standardized plans. Medicare Advantage, on the other hand, was involved in the PPACA, cuts to the Medicare Advantage program helped fund health care reform. As of now, though, both program still exist and are going strong. With 11,000 Medicare-eligibles aging in to Medicare every day, there is a constant influx of new people onto these plans.

One additional consideration related to the future, particularly if you are comparing the two plan types, is that you do have to qualify medically to get a Medigap plan outside of your initial 6-month open enrollment window. In other words, if you choose a Medicare Advantage plan initially, then wish to return to Medicare with a supplement, you do have to qualify to get the Medigap plan. So, this is certainly something to consider when you take the long view of your health and medical coverage.

If you have any questions about this information or would like to discuss your specific situation, you can reach us at 877.506.3378 or online at Medicare-Supplement.us.

Comparing Part D Plans – Step by Step Guide to Medicare.gov

comparing part d plansComparing Part D plans is an essential task for those on Medicare. Part D is the part of Medicare that covers prescription medications, and frankly, is often the most confusing and complex part of Medicare. It can also be the most expensive, particularly if you have chosen the “wrong” Part D plan.

Part D has an annual enrollment period (contrary to Medicare Supplement plans, which do not). This year, the Part D annual enrollment period, or AEP, runs from October 15 through December 7. Any changes made to your coverage during this time period will take effect on 1/1/14.

So, why do you have to compare plans each year? Can you not just choose a plan and stay with it? Yes, you certainly can stick with the plan that you have now. If you take no action during AEP, your plan will carry you into the next year (as long as it is not being discontinued). But, this is not always a wise strategy. Many things about the plans change from year to year.

Each year, insurance companies have to have their plan outlines/designs approved by the Centers for Medicare and Medicaid Services (CMS). Medicare/CMS sets forth minimum guidelines that they must maintain, but they can expand on those as they see fit. Typically, premiums, deductibles and co-pays on each plan change each year. Also, there is the variable of your actual medications, which may have changed and may make a different plan a better option.

So, how to do you compare the Part D plans. Fortunately, Medicare has put all of the plan information on their website (2014 information will be available around 10/1/13). However, the site is not always very user-friendly. Here are the steps to follow to compare the Part D plans:

  1. Point your web browser to http://medicare.gov.
  2. Click the yellow button named “Find health and drug plans” (mid-way down, left hand side).
  3. Enter your zip code and click “Find plans”. You may be prompted to enter your county (if your zip code spans multiple counties) – if so, select your county and click “Continue”.
  4. Answer the next two questions and click “Continue”.
  5. This will take you to the drug entry screen. You should enter your medication names exactly as they are listed on the label (in other words, don’t list the brand name if you take a generic equivalent). Then, select the dosage and frequency when prompted. Once you have entered them all, select “My Drug List is Complete” (below the drug names).
  6. Next, select your preferred pharmacy. This is important as co-pays etc can vary on some plans from one pharmacy to the next. Choose the pharmacy that you use now or would most likely use and click “Add Pharmacy” below the pharmacy name. Then, click “Continue to plan results” at the bottom of the screen.
  7. Under “Summary of search results”, select ONLY the checkbox beside “Prescription Drug Plans”. Then, click “Continue to plan results”.
  8. This brings up all the plans for your area and the results are sorted by “lowest estimated annual retail drug costs”. In other words, the plans are listed in order of which plan would cost the least to you over the course of an entire year, taking into account premiums, deductibles, and co-pays for your specific medications (that you entered).

This is truly the best way to compare Part D plans. You can even sign up for the plan you want right there on the Medicare website, or you can get information about contacting to company to enroll. It is a little cumbersome and time-consuming, but the savings that can result are significant. Each year for the last 7 years, I have had a client save $2000+ on Part D costs simply by changing plans to one that fits their medication profile better.

We perform the Part D comparisons at no cost for our Medicare clients, as most independent agencies do (or should do). If you want more information or have questions, please contact me online or call us at 877.506.3378.

Medicare Supplement Plan N – A Lower Cost Alternative

Medicare Supplement Plan N is a relatively newer choice among the 10 Federally-standardized Medigap plans. Many people are unfamiliar with what it covers and how it works because it was added to the portfolio of Medigap plans in June 2010. However, despite it’s “newness” as an option, it is growing in popularity and may be a viable option for some people.

Plan N comes in at a lower premium than more common plans, such as Plan F and Plan G. Plan F has the majority of the market share, around 50% according to recent studies. Plan N, typically, is priced about $30-50 (depending on zip code) lower per month than ‘F’.

Coverage-wise, Plan N provides almost identical coverage to ‘F’ at the hospital/inpatient (Medicare Part A). The differences are found under Medicare Part B coverage – Part B is outpatient or doctor’s office coverage.

First of all, Plan N does not cover the Medicare Part B deductible, which currently is $147/year. After that deductible is met, you are responsible for an up to $20 doctor’s office co-pay (can be 20% if that amount is less) and a $50 ER co-pay. Lastly, Plan N does not cover the “Medicare Part B Excess charges”. Because this is terminology that most people are not familiar with, it scares many people away from this plan. “Excess charges”, though, are when a doctor does not accept the Medicare fee schedule as payment in full. They are permitted to charge up to 15% above that – these are called “Excess charges”. By recent studies, this occurs in 2-3% of instances nationally. And, there are some states (PA and OH in particular) that have prohibited the charging of “excess charges”. Because it is rare and limited to 15% of Part B charges, which are generally smaller than Part A charges anyway, the loss of this benefit on ‘N’ (as compared to plans that cover it) is not that significant, in my experience.

So, is Plan N the right choice for you? This depends on several factors. First of all, what is your current health like? Are you going to the doctor many times a year? Or, are you only going 3-4 (or less) times on average?

Also, do you have any known, upcoming surgeries or procedures which will require rehab or multiple follow-up visits? This can be a major deciding factor, as you would pay the up to $20 co-pay each visit, regardless of whether it is for the same type of visit.

For many people, particularly those in good health or those who do not go to the doctor often, the savings on Plan N can be significant enough to warrant looking at this option instead of Plan F. Much of what you will hear from insurance companies themselves and people you know who have it is certainly advocating Plan F. And, that is a great option. But if you can save $400/year in exchange for paying the $147 deductible and $20 a couple of times, it just makes sense to consider Plan N as an option.

On the flipside, most analysts agree that the Plan N model will be the way of the future for Medigap plans, because it incorporates cost-sharing. That can be a factor in favor of Plan F, because frankly, this type of “full coverage” that Plan F offers may not be around forever. But if you purchase a plan now, it is “guaranteed renewable” and cannot be cancelled (unless you don’t pay the premium).

If you have questions about Plan N or how it works, please feel free to contact us on our website – http://medicare-supplement.us or call us at 877.506.3378.

 

CIGNA Medicare Supplements – A New Option for Medigap Plans

CIGNA Medicare Supplements are a new option on the Medigap
plan landscape. Currently, CIGNA’s plans, sold CIGNA Medicare Supplementsunder the name American Retirement Life Insurance Company (ARLIC), are approved for sale in 39 states. Where they are offered, they have been a well-priced, stable alternative to some of the existing options in the Medigap sphere.

Medigap plans are Federally-standardized. That is, the coverage is the same regardless of which company sells you the plan. To see the standardized plans chart, visit this link. For example, a Plan F with CIGNA (ARLIC) would be the same as a Plan F through AARP, Blue Cross Blue Shield, Mutual of Omaha, Aetna or any of the other companies that offer Medigap plans. In addition to coverage being standardized, claim payments are also uniform from one company to the next. Claims are processed through the Medicare “crossover” system, meaning that the provider and Medicare handle claim payments electronically and on a set-by-Medicare timetable that doesn’t vary from one company to the next. Lastly, doctor acceptance of Medigap plans is not a factor, as doctors that take Medicare are required to accept the standardized Medigap plans, regardless of which company sold you the plan.

With all this in mind, it is crucial to look at premium rates and company rating when comparing Medigap plans. These are the two primary factors, and really, the only things that will vary from one company to the next. CIGNA Medigap plans have an ‘A’ A.M. Best rating and have consistently been priced competitively in the areas in which they are offered.

In most of their markets, CIGNA offers Plans F, G and N. While Plan F is the most comprehensive and common plan, Plan G is sometimes a better “deal”. The only difference between ‘G’ and ‘F’ is the coverage of the Medicare Part B deductible ($147/year for 2013). Otherwise, the two plans are identical. Often, the premium savings on Plan G more than offsets that deductible amount.

One major obstacle to many people changing plans is the simple misunderstanding about when changes can be made. As we’ve addressed previously, this misconception, which is perpetuated by the annual enrollment period (the only time that you can change Part D coverage but has nothing to do with Medigap plans), causes many people to feel “locked in” to their plans for the year even if that plan has mid-year rate increases as many companies do. On the contrary, you can change Medigap plans at any time, and when your rates go up, particularly if it is a significant increases, it is advisable to at least compare what else is available to you.

Medicare-Supplement.US is an independent agency that provides Medigap comparisons by email. These comparisons can include CIGNA, where available, as well as other competitive companies in your marketplace. To request a Medicare supplement comparison and Medigap quotes, simply fill out this form. If you prefer to speak to someone directly and by phone, you can reach us at 877.506.3378.

2014 Medigap Plans

2014 Medigap plans will be the same, coverage-wise, as 2013 Medigap plans. With Medigap, coverage is Federally-standardized and all plans go by the Medigap coverage chart. This has been changed in recent years – effective June 1, 2010 – but since that point there have been no changes to the coverage chart. The Federal government – CMS, really – is the one that sets forth this chart and determines what Medigap plans will cover. Although the prices for the plans from different companies can vary considerably, this ensures that the coverage is the same for “like” plans. In other words, a Plan F with one company is the same as a Plan F with another.

So, although the coverage on the 2014 Medigap plans is the same as the 2013 plans, there are other factors to consider. First of all, many people mistakenly think that there is an annual enrollment period for Medigap plans – this is not the case. The annual enrollment period that runs October 15-December 7 is actually for the Part D Rx plans and the Medicare Advantage plans, which take the place of Medicare. For Medigap plans, you can sign up for, leave, or change plans at any time of the year.

As far as companies and rates go, there are always changes going on with Medigap. Over the past year or two, there have been several new companies to enter the marketplace, including CIGNA, AFLAC, Stonebridge Life, and Central States Indemnity, that have very competitive rates in many states and are striving to become market leaders due to price competitiveness and financial stability.

Just like there is not an annual enrollment period for the plans, Medigap rates do not change with the calendar year necessarily. So while your Medigap company may change rates 1/1/14, it is more common that your plan will change rates on your policy anniversary date.

Moving into 2014, it looks like the aforementioned companies, as well as some old “stand-bys”, such as Mutual of Omaha, AARP/United Healthcare, Aetna, etc will continue to be prominent players in the national Medigap market. The rates, of course, depend on what state you are in, your age, gender, and sometimes, other factors. So, it is important, if you are comparing plans, to get an accurate depiction of what is available in your area and what the actual rates would be.

Medicare-Supplement.US is a leading, independent Medigap brokerage that works with 35+ companies in 39 states. If you want a comparison for your specific situation, contact us online or call us at 877.506.3378.

 

Supplemental Medicare Plans – What Are They and Who Needs Them?

Supplemental Medicare plans are plans that “follow” behind Medicare and fill in the gaps in coverage in Medicare. These plans are also called Medicare supplements or Medigap plans, and they are sold through private insurance companies. There are a handful of these options out there and they vary by state, so it is important to be apprised of what’s available in your area if you are trying to determine if this type of a plan is a good idea for you. Here are a few considerations:

  • First, you should understand what you have. Are you on an employer group plan now? If so, will that plan continue even after you go on Medicare? And, at what cost to you? If you do not have other coverage, such as a employer-based plan or retiree plan, will you plan to have only Medicare coverage?
  • Next, it is essential to understand what Medicare does and does not cover. Medicare is relatively comprehensive coverage; however, it does “leave out” an unlimited 20% of medical costs at the doctor/hospital. In other words, if you have only Medicare – with no supplemental Medicare plan – you would be responsible for an unlimited 20% of costs at the doctor/hospital.
  • Last, you should understand what a supplemental Medicare plan would do for you in order to decide if it would be a good idea. There are two types of plans available to those on Medicare – actual supplement plans and Medicare Advantage plans. It is important not to confuse the two. Medicare Advantage plans take the place of Medicare – they do not supplement it. The coverage is at a lower level, and although premiums are also lower, there are some things to consider such as network restrictions, future portability and long-term viability.

Your health is very important to your all-around well-being, particularly when you are of Medicare age. Because of that, it is wise to consider whether a supplemental Medicare plan makes sense for you. It can give you financial peace of mind as well as providing for good, long-term health.