Supplementing Medicare Insurance
The State of Utah, Department of Human Services, Division of Aging and Adult Services, Health Insurance Information Program, is committed to making available as much information as possible to ensure beneficiaries make informed choices about their health insurance.
We have included on this web site information and rates supplied by participating insurers to help you compare the costs associated with supplementing your Medicare plans. Supplemental Insurance Comparisons
Also included on this web site is a simple form designed to help you sort through the complexities of comparing one insurance company's rates to another. Supplemental Insurance Comparison Form (pdf)
The Health Insurance Information Program does not determine eligibility for, or administer any of the services mentioned in this web site. Please contact the appropriate agencies directly for your individual determination of eligibility and services.
You may choose to supplement your Medicare Health Insurance for one or more of the following reasons:
- Medicare was never designed to pay all the health care costs of the elderly.
- Medicare coverage has not kept pace with the rising costs of medical care.
- Medicare cost-sharing provisions have risen steadily since 1965.
- Medicare coverage has many gaps.
- Medicare deductibles increase every year.
This web page is intended to give you general information on your options for supplementing your Medicare health insurance.The Centers for Medicare and Medicaid Services is a good resource for more detailed information.
If you do not find the information you need from this web site, please contact us directly at our toll free number:1-800-541-7735
General Information Included on this Web Page
- Common Methods of Supplementing Medicare Insurance
- Types of Supplemental Policies
- Medigap - Medicare Supplemental Policies
- Choosing a Medigap Insurance Policy
You may choose a private insurance plan that accepts Medicare beneficiaries. With these plans you may go to any doctor or hospital you want. The insurance plan, rather than the Medicare program, decides how much to reimburse for the services you receive. You may have extra benefits that Medicare A and Medicare B Plans don't cover. For information regarding your situation contact the private insurance company offering the plan.
Continuation or Conversion from Employer Group Plan Many employers offer continuation or conversion of their group health plan as a "retirement benefit", allowing retirees to continue the group coverage or convert to a plan that acts like a Medicare supplement. These plans are not subject to federal and state minimum standards for Medigap policies.
The Comprehensive Budget Reconciliation Act, (COBRA), allows for access to an employer's plans for the employee and their dependents for 18 to 36 months as a result of termination, divorce, or death.
Some group coverage automatically becomes a "Medicare like supplement", many plans do not. Please contact your employer directly to determine if continuing a plan is in your best interest.
If you decide to continue, convert, or exercise your COBRA option, the delay in enrolling in Medicare may affect the times you can enroll in Medicare, and the Medicare premiums you are required to pay. See the enrollment section of Medicare Part A or Part B for more information, or contact us directly at our toll free number: 1-800-541-7735Federal Employees Health Benefits Program - FEHB
Federal Employees Health Benefits programs cover federal civilian employees and dependents and provide:
- A choice of health plans including fee for service and pre-paid plans which provide a wide range of benefits.
- A partial payment toward the monthly premiums.
- An opportunity to continue coverage as supplemental to Medicare after retirement.
Federal Employees Health Benefits programs are available through the federal agency with which the individual works, and are administered by the Office of Personnel Management in Washington, D.C. Please contact your employer directly for more information on the programs available to you.
Civilian Health and Medical Program of the Uniformed Services - (CHAMPUS)
CHAMPUS, is a health insurance program for the immediate families of active or retired military service members.
As a rule, CHAMPUS beneficiaries lose their CHAMPUS eligibility at age 65.
Please contact the military service you are associated with for more information on CHAMPUS.Medigap Policies - (Medicare Supplemental Insurance Policies)
You must be enrolled in Medicare Part A and Part B to obtain a Medigap policy, (also commonly known as a Medicare supplemental insurance policy).
A Medigap policy fills gaps in Medicare Part A and Part B insurance. Medigap insurance must follow Federal and State laws. In most states, (Utah included), a Medigap policy must be one of ten standardized policies to help you compare them easily.
If you are in a Medicare managed care plan, or if you are covered by Medicaid, you do not need a Medigap policy.Medicare SELECT Policies
A Medicare SELECT policy is a type of Medigap policy. It must meet all of the requirements that apply to a Medigap policy, and it must be one of the ten standardized policies. The only difference is that a Medicare SELECT policy may require you to use doctors and hospitals within its network in order for you to be eligible for full benefits. Because of this limitation, a Medicare SELECT policy will usually cost less than a regular Medigap policy.
Indemnity policies pay indemnity benefits; i.e., a fixed dollar amount for expenses covered by the policy, such as so many dollars per day or per week for covered hospital or skilled nursing care facility care.
Most pay a certain amount per day while a person is hospitalized.
Some pay added benefits such as; a part of the cost of private duty nurse or an amount per day while a person is confined to a skilled nursing care facility, intensive care unit, or burn unit.Advantages
- Coverage is easy to understand
- Available to people under 65 years of age
- Premium rates tend to be stable over time and less than a Medigap, (Medicare Supplemental), policy
- Pays cash to the beneficiary which can be used for other medical expenses
- Not as comprehensive as a Medigap policy
- May terminate or reduce benefits after age 65
- Coverage fails to keep pace with inflation and the rising costs and changes in Medicare cost-sharing provisions
- Updating coverage to match Medicare cost increases results in increased premiums.
- Generally, only covers periods of hospitalization with other types of care not covered.
- Most policies not tailored to cover the specific gaps in Medicare.
- Policies often do not begin to pay until a certain day of hospitalization, or status as nursing home inpatient, decreasing policy owner's likelihood of ever collecting any benefits. Some policies have a maximum number of days or a maximum payment amount.
- As the average length of stay for inpatient hospital care decreases, the value of this type of policy decreases.
Specific disease or accident policies cover expenses of a specific dread disease or injury(most common types are cancer insurance or accident insurance).
- May not restrict coverage to Medicare-covered expenses
- Premiums tend to be less expensive than a Medicare Supplement because benefits are so limited
- Pays benefits regardless of other coverages.
- Pays only in the event the beneficiary contracts the specified disease or is involved in a specific accident
- May duplicate Medicare coverage
- Coverage generally does not keep pace with inflation
- May limit total amount of coverage
These policies usually pay a certain percentage (e.g., 20 percent toward covered medical or surgical expenses). The reimbursement is generally based on the "usual and customary" charges, which may not be the same as the Medicare Part B approved cost.
- Reimbursements not based on Medicare "approved charges," so may cover some of the "excess charge"
- May not restrict coverage to Medicare "approved services"
- Premiums tend to be high for older ages, or policies are not available at ages over 65.
- Only covers medical or surgical expenses, not hospital or skilled nursing facility
- Severe underwriting
The Balanced Budget Act of 1997 enacted August 5, 1997, added sections to the Social Security Act to establish a new Part C of the Medicare Program, known as the Medicare+Choice Program. Every individual entitled to Medicare Part A a nd enrolled under Part B, except for individuals with end-stage renal disease, may elect to receive benefits through either the existing Medicare fee-for-service program or a Part C M+C plan, if any M+C options are available in your state.
Medigap Policies - (Medicare Supplemental Policies)
Medigap policies are also called Medicare Supplemental Policies and are designed to help fill the gaps in Medicare. Generally, Medigap policies help pay for Medicare-covered services.
- Regulated by federal minimum standards
- Easy to compare to Medicare and to each other due to standardized plans.
- Covers many types of services, including some gaps in Medicare
- May offer coverage above the "approved" charge or other extended benefits
- May offer coverage for services not paid for by Medicare (e.g., prescriptions, at-home recovery, preventive services, care outside the U.S.)
- Generally, reimbursement is based only on Medicare-covered services and charges
- May not cover all expenses
Medigap Policy Standardization
The law limits the number of Medigap products to ten plans, A through J, including a core group of basic benefits, (Plan A), and nine additional packages of benefits, B through J. Plans F and J can also be offered with a high deductible. The high deductible shall begin at $1500 and may be increased to reflect changes in the Consumer Price Index. The core plan must be sold by any company that sells Medigap in that state.
STANDARD MEDIGAP (MEDICARE SUPPLEMENT) PLANS BENEFITS CHART
|Plans||Plan A||Plan B||Plan C||Plan D||Plan E||Plan F||Plan G||Plan H||Plan I||Plan J|
|Part A Hospital Co-Pay|
|Additional 365 Days||A||B||C||D||E||F||G||H||I||J|
|Parts A & B|
|Skilled Nursing Co-Insurance|
|Nursing Home Co-Payment||C||D||E||F||G||H||I||J|
|Part A Deductible|
|Part B Deductible|
Doctor's and Medical Bill Deductible
|Part B Excess|
|Doctor's and Medical Charges Beyond Medicare Limits||F
|Foreign Travel Emergency|
|Treatment Outside the United States||C||D||E||F||G||H||I||J|
|At Home Recovery|
|Personal Home Care During Recovery from Illness||D||G||I||J|
|Basic Drugs ($1250 Limit)|
|Extended Drugs ($3000 Limit)|
|Such as Annual Physicals, Diabetes Screening, and Hearing Tests||E||J|
For more information on Medigap plans, please contact us directly at our toll-free number:1-800-541-7735
Consumer Protections in Medigap Plans
- All Medigap policies must pay claims that occur six months or more after a policy's effective date regardless
of whether the claim arose from "pre-existing condition."
- If an agent or company sells a policy to replace one the consumer already has, the replacing insurer shall
waive any time periods applicable to pre-existing conditions, waiting periods, elimination periods and
probationary periods in the new Medicare supplement policy or certificate for similar benefits to the extent
such time was spent under the original policy.
- All policies must be guaranteed renewable.
- All policies must clearly disclose the benefits.
- All policies must allow the buyer to cancel a policy without penalty during the first 30 days after receiving
- Open Enrollment
- All Medigap insurers must accept any applicant for any standard Medicare supplement insurance plan during the
first six months after turning age 65 and already enrolled in Medicare Part B, or when age 65 or older and enrolling
in Medicare Part B for the first time.
NOTE: Individuals on Medicare below age 65 do not have the open enrollment option until they turn age 65.
- The insurance company is allowed to impose its regular pre-existing condition waiting period.
- Open enrollment for individuals who work past the age of 65 begins when they sign up for Medicare Part B.
- All Medigap insurers must accept any applicant for any standard Medicare supplement insurance plan during the first six months after turning age 65 and already enrolled in Medicare Part B, or when age 65 or older and enrolling in Medicare Part B for the first time.
- Guaranteed Issue
When an individual seeks to enroll in specified Medigap policies (Plans A, B, C or F) within 63 days of the involuntary termination of coverage events listed below, the insurer may not deny or condition the issuance of a Medigap policy that is offered or available; discriminate in the pricing of such a policy because of health status, claims experience, receipt of health care, or medical condition; or impose a pre-existing condition.
- Individuals enrolled under an employee welfare benefit plan that provides health benefits that supplement Medicare, if the plan terminates or ceases to provide all those benefits.
- Persons enrolled with a Medicare+Choice organization under a Medicare+Choice plan whose enrollment is discontinued under the following circumstances: 1) the organization or plan's certification is terminated, or the organization has discontinued providing the plan in the area where the person resides; 2) the individual is no longer eligible to remain in the plan because of a change in circumstances, including a move outside of the service area, but not including nonpayment of premiums or disruptive behavior; or 3) the individual demonstrates that the organization substantially violated a material contract provision or materially misrepresented the plan's provisions in marketing the plan to the individual.
- Persons enrolled with an HMO or other organization with specified Health Care Financing Administration contracts or under a Medicare Select policy if enrollment ceases for the reasons stated above.
- Individuals enrolled under Medigap policies if enrollment ceases because of: 1) bankruptcy or insolvency of the issuer or because of other involuntary termination where there is no provision under state law for the continuation of the coverage; 2) the insurer substantially violated a material provision of the policy; or 3) the issuer materially misrepresented the policy provisions in marketing the policy to the individual.
The Medigap plans that are available for guaranteed issue under the termination events listed above are the standard Medigap Plans A, B, C and F, if the insurer offers the plans.
If an individual was previously covered by a Medicare supplemental policy that is still available and then enrolled in a Medicare+Choice or other organization, or the Medicare SELECT policy, described in this section, which is terminated in the manners listed in this section within 12 months after enrolling, the individual may return to their previous policy.
- No one needs more than one Medicare supplement policy. If the beneficiary wants to improve their Medigap benefits, they should replace the policy, not add to it.
- The beneficiary should not drop an old policy until they have the new one. That means waiting until they actually receive the new policy.
- A good policy should last many years. A new policy should not be purchased just because it looks nicer or came with a smooth sales pitch.
- There are times when it makes good sense to switch. To protect consumers against frivolous policy switching,
state regulations require the insurance agent or company to fill out a "replacement notice." Whenever a Medicare
Supplemental Policy is being sold to replace other coverage, the agent or company and the buyer must complete a
replacement form and sign the following statement:
I have reviewed your current medical or health insurance coverage. The replacement of insurance involved in this transaction does not duplicate coverage, to the best of my knowledge. The replacement policy is being purchased for the following reason(s), (check one):
____ Additional benefits.
____ No change in benefits, but lower premiums.
____ Fewer benefits and lower premiums.
____ Other. (Please specify)
- Illegal Replacement
- State and Federal law prohibits insurers from selling a Medicare supplement policy (Medigap) to a person that already has a Medicare supplement policy except as a replacement policy. Federal law prohibits the sale of a health insurance policy (the term policy includes certificates) to Medicare beneficiaries that duplicates Medicare benefits unless it will pay benefits without regard to a beneficiary's other health coverage and it includes the prescribed disclosure statement on or together with the application for the policy.
- Medigap Replacement and Pre-existing Conditions.
- If the beneficiary moves directly from one policy to another, they get "credit" for the time they were covered by the old policy for similar benefits.
- Since the longest allowable waiting period for coverage of pre-existing conditions is six months, if you have
had a Medigap policy for at least six months you will qualify immediately for full coverage under the new policy for
NOTE: You can get credit for time covered by the old policy only if you move directly from the old to the new, with no gap in coverage (if the old policy ends on June 30, the new coverage must begin no later than July 1).
- Suspension of Medigap for Medicaid Eligibles.
- Insurance companies must inform a Medicaid eligible person that a Medigap policy is not usually necessary.
- If a person has a Medigap plan already and then becomes eligible for Medicaid, that company must suspend coverage, (upon request of the policyholder), and waive the premiums during the time the policy holder is eligible for Medicaid, not to exceed a period of 24 months.
- If the person loses Medicaid benefits, the company will reinstate an equivalent policy without any new pre-existing waiting period and at the appropriate premium had no suspension of benefits taken place.
- Open Hearings for Rate Increases
- The State Insurance Commissioners may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard.
- Loss Ratios
- Companies must now pay out 65 cents for every dollar collected in premium for individual products and 75 cents for group Medigap products.
- Companies have to give refunds or credits to policyholders if these loss ratios are not met.
Claims Filed by The Beneficiary:
- Keep an accurate record of all health care expenses.
- Whenever receiving treatment, present the Medicare card and any other proof of insurance.
- File all claims promptly:
- With each claim payment from Medicare, beneficiary will receive an "Medicare Summary Notice" form.
- If the insurance company requests this, beneficiary should make a copy of it to send and write down the date it is sent.
- Keep copies of any information concerning services received, the dates of services, and the persons who provided the services.
- Many large clinics provide a special billing for insurance companies. If not, the beneficiary should make sure to get an itemized bill. This bill should include the date, type of service, and amount charged for each service performed.
- If there is a specific complaint, refer it first to the insurance company involved. If beneficiary does not receive satisfactory answers from the company, he or she should contact the Utah State Insurance Commission.
If the beneficiary assigns insurance payments directly to a participating provider by completing box #13 of the Health Care Finance Administration 1500 claim form, the carrier will forward the "Medicare Summary Notice" form directly to the beneficiary's Medigap insurance company. The form must be completed correctly for direct payment to occur.
Sources of Medigap policies
- Major companies in the health insurance field
- Group insurance from associations
- Can individual afford to pay out of pocket for all costs?
- Can individual afford future inflated medical care costs?
- How much money is currently available for the purchase of insurance?
- Present Health Circumstances
- Whether doctor accepts assignment
- Whether eligible for Medicaid
Old Medigap plans were not subject to the current standards and cannot be sold anymore. If you have an existing Medigap policy you can keep it if it meets your needs. Use the following guidelines to help you determine if the new standards are a benefit to you before you make a switch in plans.
- Medicare Part A -- Does the policy:
- Pay skilled nursing care co-payments, days 21-100 and beyond? (benefits beyond 100 days are not available in standardized plans)
- Pay skilled nursing care co-payments in non-Medicare-certified facilities and for how long? (not available in standardized plans)
- Pay for private rooms? (not available in standardized plans)
- Pay for private duty nursing? (not available in standardized plans)
- Medicare Part B -- Does the policy:
- Pay the Part B deductible?
- Provide benefits based on provider's actual charge, Medicare's approved charge, or company's usual and customary charge? What Percentage?
- Have a maximum benefit? (in some old policies)
- Have a deductible?
- Pay for prescriptions?
- Pay for care outside the United States?
- Pay for extra home health care?
- Pay for prevention services?
Things to Consider
- Reputation of both the Insurance Company and the Policy Name
- Annual premium
- How premiums relate to various age groups
- Policies can be priced in three different ways, (based on age).
- Attained Age - The premium is scheduled to increase automatically as you get older. If you buy at 65, when you are 80 you will pay the same price as all of the company's 80-year-old customers.
- Issue Age - The premium is set when you buy the policy. If you buy at age 65, you will always pay the company's premium for 65-year-olds.
- No Age Rating - Premiums are the same for all customers, regardless of their age.
- Is there a waiting period for pre-existing conditions?
- Does company require health underwriting (health criteria)?
- Are there items covered by the policy that are not covered by Medicare?
- Is the company or agent available for service?
- Is the policy a Medicare SELECT Policy?
- Medicare Select programs provide covered Medicare benefits through a managed care component (Health Maintenance Organization or Preferred Provider Organizations). The premiums should be lower because in order to receive full benefits you must use providers who have agreed to work with the insurer. There are exceptions allowed for emergency care.
- Initially, the Medicare Select program involved only 15 states and Utah was not one of the pilot states. Under recent changes to Federal law, the Medicare Select program has been extended until at least June 30, 1998 and will be expanded to all 50 states and U.S. territories.
- The requirements for approving Medicare Select plans have been adopted by Utah.
DO insist on a simple outline of the policy which describes the benefits offered. Under law, this outline must be given to a beneficiary when he or she applies for health insurance and before paying or when you receive the policy if purchased through the mail. READ IT CAREFULLY. A signed and completed copy of the application for insurance must be left with the beneficiary at the time of application.
DO compare the costs and benefits of plans offered by several insurance companies before buying any health insurance policy.
We have included in this web site a list of participating insurance companies showing the various rates of each of their plans. Supplemental Insurance Comparisons
We have also included a simple form designed to help you sort through the complexities of comparing one insurance company's rates to another. Supplemental Insurance Comparison Form (pdf)
DO find out if your doctor will regularly accept assignment before deciding on a policy. This information will help in comparing the benefits of various plans.
DO be very careful about buying a policy on the basis of its skilled nursing home coverage. Few policies cover the custodial care most older persons receive in nursing homes, unless it is actually called a long-term care policy.
DO read the policy carefully. If for any reason the beneficiary wishes to cancel the policy, he or she should return the policy to the agent or insurance company by registered mail within 30 days of receipt. all money must be returned to the beneficiary.
DO contact the Utah State Insurance Commission if an agent has used unfair or dishonest sales practices. Utah State Insurance Department Web Site
DO understand how your employer's group plan will supplement Medicare. Try to find out if your employer has plans to drop health coverage for retirees.
DO Check with friends and relatives who have submitted claims to their insurance company to find our how the company is about paying claims.
DO Read the current Guide to Health Insurance for People with Medicare. It contains very useful information.
DON'T listen to an agent who says the policy pays for everything that Medicare does not pay. No such policy exists.
DON'T believe the agent who says that a policy offers coverage not listed in the outline of coverage.
DON'T listen to the agent who uses pressure. Remember, less than 1 percent of beneficiaries use all of their Medicare hospital benefits; only 5 percent are in nursing homes; and the average hospital stay is only eight days.
DON'T be influenced by an agent who tries to scare you into switching policies because of your company's "rating." Call the Utah Insurance Department for information on the proper use of ratings and other information about insurance companies.
DON'T buy any policy that pays only daily "indemnity" or "per-day" benefits, or policies that pay only in the event that you have a specific disease, like cancer, until you have seriously considered a good comprehensive Medicare supplemental policy.
DON'T drop an existing insurance policy until the new policy is issued.
DON'T keep poor policies simply because you have had them a long time.
DON'T buy more than one Medicare Supplemental Policy.
DON'T pay cash for insurance; write a check or money order payable only to the company, not the agent.
DON'T buy from unsolicited door-to-door salespersons until at least checking out the agent's credentials.
DON'T buy from an agent who gives the impression that he or she is from a government agency. No agents are affiliated with any government agencies. If an agent gives you this impression, contact the state insurance commissioner, since it is an illegal practice
Supplemental Insurance Comparisons
We have included in this site, information and rates supplied by participating insurers to help you compare the costs associated with supplementing your Medicare plans.
We have also included a simple form designed to help you sort through the complexities of comparing one insurance company's rates to another.