Medicare Supplemental Insurance Plans
A Medigap (also called “Medicare Supplement Insurance Plans”) policy is private health insurance that is designed to supplement Original Medicare. This means it helps pay some of the health care costs (“gaps”) that Original Medicare doesn’t cover (like copayments, coinsurance, and deductibles). Medigap policies may also cover certain things that Medicare doesn’t cover.
If you are in Original Medicare and you have a particular Medicare Supplement Insurance Plans, Medicare will pay its share of the Medicare-approved amounts for covered health care costs. Then your Medicare Supplement Insurance Plans will pays its share. (Note: Medicare doesn’t pay any of the costs for you to get a Medigap policy.) Also, a Medigap policy is different than a Medicare Advantage Plan (like an HMO or PPO) because it’s not a way to get Medicare benefits.
Medicare Supplement Insurance Plans must follow Federal and state laws designed to protect you, and it must be clearly identified as “Medicare Supplement Insurance.” Companies that sell Medicare Supplement Insurance Plans can only sell you a “standardized” Medigap policy identified by letters A through L. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. Cost is usually the only difference between Medicare supplemental insurance plans sold by different insurance companies.
In Massachusetts, Minnesota, and Wisconsin, Medicare supplemental insurance plans are standardized in a different way. In some states, you may be able to buy other types of Medicare Supplement Insurance Plans called Medicare SELECT (a Medigap policy that requires you to use specific hospitals and in some cases specific doctors to get full benefits).
What types of Medicare Supplemental Insurance Plans can insurance companies sell?
In most cases, companies selling Medicare Supplement Insurance Plans can sell you only a “standardized” Medigap policy. Medicare Supplement Insurance Plans must have specific benefits so you can compare them easily.
Insurance companies that sell Medicare Supplement Insurance Plans don’t have to offer every plan (Medigap Plans A through L). However, they must offer Medigap Plan A if they offer any other Medigap policy. Each insurance company decides which Medigap policies it wants to sell, although state law might affect which ones they offer.
In some cases, an insurance company must sell you any of their Medicare Supplement Insurance Plans, even if you have health problems. Listed below are certain times that you are guaranteed the right to buy a Medigap policy:
• When you are in your Medigap open enrollment period.
• If you have a guaranteed issue right
You may also be able to buy Medicare Supplement Insurance Plans at other times, but the insurance company is allowed to deny you a policy based on your health. Also, in some cases it may be illegal for the insurance company to sell you Medicare Supplement Insurance Plans (such as if you already have Medicaid or a Medicare Advantage Plan).
Medicare Advantage Plans and Medicare Supplement Insurance Plan
Medicare Advantage Plans include the following:
· Preferred Provider Organization (PPO) Plans
· Health Maintenance Organization (HMO) Plans
· Private Fee-for-Service (PFFS) Plans
· Medical Savings Account (MSA) Plans
· Special Needs Plans (SNP)
Important: If you have a Medicare Supplement Insurance Planand you are switching from Original Medicare to a Medicare Advantage Plan, you don’t need and can’t use the Medigap policy to cover deductibles, copayments, or coinsurance under the Medicare Advantage Plan.
You may choose to drop your Medigap policy, but you should talk to your State Health Insurance Assistance Program and your current Medigap insurance company before you do because you may not be able to get it back. If you already have a Medicare Advantage Plan, it is illegal for anyone to sell you a Medigap policy unless you are switching back to Original Medicare.
Can I buy a Medicare Supplemental Insurance Plans that includes prescription drug coverage?
No. New Medigap policies can’t include prescription drug coverage. This is because Medicare offers prescription drug coverage to everyone with Medicare.
What Medicare Supplemental Insurance Plans do not cover
Medicare Supplement Insurance Plan don’t cover long-term care (like care in a nursing home), vision or dental care, hearing aids, eyeglasses, and private-duty nursing.
Types of coverage that are NOT Medigap policies
· Medicare Advantage Plans (Part C) like an HMO, PPO, or Private Fee-for-Service Plans
· Medicare Prescription Drug Plans (Part D)
· Medicaid
· Employer or union plans, including Federal Employees Health Benefits Program (FEHBP)
· TRICARE
· Veterans’ benefits
· Long-term care insurance policies
· Indian Health Service, Tribal, and Urban Indian Health plans
What do I need to know if I want to buy Medicare Supplemental Insurance Plans?
· Generally, you must have Medicare Part A and Part B to buy any of the Medicare Supplement Insurance Plans available.
· You pay a premium for your Medigap policy to the private insurance company, in addition to the monthlyPart B premium that you pay to Medicare.
· A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, most likely, you each will have to buy separate Medigap policies.
· You can buy a Medigap policy from any insurance company that is licensed in your state to sell one to you.
· Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
· Although some Medigap policies sold in the past cover prescription drugs, no new Medigap policies are allowed to include prescription drug coverage.
· If you want prescription drug coverage, you may want to join a Medicare Prescription Drug Plan (Part D)offered by private companies approved by Medicare.
When is the best time to buy Medicare Supplemental Insurance Plans?
The best time to buy Medicare Supplement Insurance Plans is during your Medigap open enrollment period. This period lasts for 6 months and begins on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B. Some states have additional open enrollment periods. During this period, an insurance company can’t use medical underwriting. This means the insurance company can’t do any of the following:
· Refuse to sell you any Medicare Supplement Insurance Plans it sells
· Make you wait for coverage to start (except as explained below)
· Charge you more for any of the Medicare Supplement Insurance Plans they offer because of your health problems
While the insurance company can’t make you wait for your coverage to start, it may be able to make you wait for coverage of a pre-existing condition. A pre-existing condition is a health problem you have before the date a new insurance policy starts. In some cases, the Medigap insurance company can refuse to cover your out-of-pocket costs for these pre-existing health problems for up to 6 months. This is called a “pre-existing condition waiting period.” Coverage for a pre-existing condition can only be excluded in a Medigap policy if the condition was treated or diagnosed within 6 months before the date the coverage starts under the Medigap policy. (Remember, for Medicare-covered services, Original Medicare will still cover the condition, even if the Medigap policy won’t cover your out-of-pocket costs.)
Even if you have a pre-existing condition, you can buy Medicare supplemental insurance plans during your Medigap open enrollment period and if you recently had certain kinds of health coverage called “creditable coverage,” it is possible to avoid or shorten waiting periods for pre-existing conditions. Prior creditable coverage is generally any other health coverage you recently had before applying for a Medigap policy. If you have had at least 6 months of prior creditable coverage, the insurance company selling the Medicare Supplement Insurance Plans can’t make you wait before it covers your pre-existing conditions.
There are many types of health care coverage that may count as creditable coverage for Medigap policies, but they will only count if you didn’t have a break in coverage for more than 63 days. If there was any time that you had no health coverage of any kind and were without coverage for more than 63 days, you can only count creditable coverage you had after that break in coverage.
Talk to your Medigap insurance company. It will be able to tell you if your previous coverage will count as creditable coverage for this purpose. You can also call your State Health Insurance Assistance Program.
If you buy Medicare Supplement Insurance Plans when you have a guaranteed issue right (also called “Medigap protection”), the insurance company can’t use a pre-existing condition waiting period at all.
Note: You can send in your application for Medicare Supplement Insurance Plans before your Medigap open enrollment period starts. This may be important if you currently have coverage that will end when you turn age 65. This will allow you to have continuous coverage.
How insurance companies set prices for Medicare Supplemental Insurance Plans
Each insurance company decides how it will set the price, or premium, for its Medigap policies. It is important to ask how an insurance company prices its policies. The way they set the price affects how much you pay now and in the future. Medigap policies can be priced or “rated” in three ways:
1. Community-rated (also called “no-age-rated”)
2. Issue-age-rated
3. Attained-age-rated
Each of these ways of pricing Medigap policies is described in the chart on the next page. The examples show how your age affects your premiums, and why it is important to look at how much the Medigap policy will cost you now and in the future. The amounts in the examples aren’t actual costs.
Comparisons of Medicare Supplemental Insurance Plans and Their Costs
As discussed in some of the other articles, the cost of Medigap policies can vary widely. There can be big differences in the premiums that different insurance companies charge for exactly the same coverage. As you shop for Medicare supplemental insurance plans, be sure to compare the same type of Medigap policy, and consider the type of pricing used. (For example, compare a Medigap Plan C from one insurance company with a Medigap Plan C from another insurance company.) Although this guide can’t give actual costs of Medigap policies, you can get this information by calling insurance companies or your State Health Insurance Assistance Program.
The cost of your Medicare supplemental insurance plans may also depend on whether the insurance company does any of the following:
· Offers discounts (such as discounts for women, non-smokers, or people who are married; discounts for paying annually; or discounts for paying your premiums using electronic funds transfer).
· Uses medical underwriting, or applies a different premium when you don’t have a guaranteed issue right.
· Sells Medicare SELECT policies. If you buy this type of Medigap policy, your premium may be less.
· Offers a “high-deductible option” for Medigap Plans F and J. If you buy a Medigap Plan F or J high-deductible option, you must pay the first $2,000 (in 2009) in Medicare-covered costs before the Medigap policy pays anything. You must also pay a separate deductible ($250 per year) for foreign travel emergency services. If you bought your Medigap Plan J before December 31, 2005, and it still covers prescription drugs, you would also pay a separate deductible ($250 per year) for prescription drugs covered by the Medigap policy.
What is Medicare SELECT?
Medicare SELECT is one of the types of Medicare supplemental insurance plans that are sold in some states and may require you to use hospitals and, in some cases, doctors within its network to be eligible for full insurance benefits (except in an emergency). Medicare SELECT can be any of the standardized Medigap Plans A through L. Medicare SELECT policies generally cost less than other Medigap policies. However, if you don’t use a Medicare SELECT hospital or doctor for non-emergency services, you will have to pay some or all of what Medicare doesn’t pay. Medicare will pay its share of approved charges no matter which hospital or doctor you choose.
How does Medicare Supplemental Insurance Plans pay your Medicare Part B bills?
In most Medicare supplemental insurance plans, when you sign the Medigap insurance contract you agree to have the Medigap insurance company get your Medicare Part B claim information directly from Medicare and then pay the doctor directly. Some Medigap insurance companies also provide this service for Medicare Part A claims.
If your Medigap insurance company doesn’t provide this service, ask your doctors if they “participate” in Medicare. (This means that they accept “assignment” for all Medicare patients.) If your doctor participates, the Medigap insurance company is required to pay the doctor directly if you request.
What are Guaranteed Issue Rights?
The best time to buy Medicare supplemental insurance plans is during your Medigap open enrollment period, when you have the right to buy any of the Medicare supplemental insurance plans offered in your state. However, even if you are no longer in your Medigap open enrollment period, there are several situations in which you may still have a guaranteed right to buy a Medigap policy.
Guaranteed issue rights (also called “Medigap protections”) are rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap (also called “Medicare Supplement Insurance”) policy even if you have health problems (called “pre-existing conditions.”)
In these situations, an insurance company must do the following:
· Sell you a Medigap policy.
· Cover all your pre-existing conditions.
· Can’t charge you more for a Medigap policy because of past or present health problems.
When Do I Have Guaranteed Issue Rights?
In most cases, you have a guaranteed issue right when you have other health care coverage that changes in some way, such as when you lose or drop the other health care coverage. In other cases, you have a “trial right” to try a Medicare Advantage Plan and still buy a Medigap policy if you change your mind. (For trial rights, see guaranteed issue rights, Situations #4 and #5, just click here to open the Excel file.
Can I buy Medicare supplemental insurance plans if I lose (or drop) my health care coverage?
Because you may have a guaranteed issue right to buy a Medigap policy, make sure you keep the following:
· A copy of any letters, notices, and/or claim denials as proof of coverage that has your name on it
· The postmarked envelope these papers come in as proof of when it was mailed
You may need to send a copy of some or all of these papers with your Medigap application to prove you have a guaranteed issue right.
It is best to apply for Medicare supplemental insurance plans is before your current health coverage ends. You can apply for a Medigap policy while you are still in your health plan and choose to start your Medigap coverage the month before or after your health plan coverage ends. This will prevent breaks in your health coverage.
Can I switch to a different Medicare Supplemental Insurance Plans?
In most cases, you won’t have a right under Federal law to switch Medigap policies, unless you are within your 6-month Medigap open enrollment period or are eligible under a specific circumstance for guaranteed issue rights. But, if your state has more generous requirements, or the insurance company is willing to sell you a Medigap policy, make sure you compare benefits and premiums before switching Medigap policies.
If you bought Medicare supplemental insurance plans before 1992, it may offer coverage that isn’t available in a newer Medigap policy. On the other hand, older Medigap policies might not be guaranteed renewable and might have bigger premium increases than newer standardized Medigap policies currently being sold.
If you decide to switch, don’t cancel your first Medigap policy until you have decided to keep the second Medigap policy. On the application for the new Medigap policy, you will have to promise that you will cancel your first Medigap policy. You have 30 days to decide if you want to keep the new Medigap policy. This is called your “free look” period. The 30-day free look period starts when you get your new Medigap policy. You will need to pay both premiums for a month.
Do I have to wait a certain length of time after I buy my first Medigap policy before I can switch to a different Medigap policy?
No. You should be aware that if you have had your old Medigap policy for less than 6 months, the company selling the Medicare supplemental insurance plans may be able to make you wait up to 6 months for coverage of a pre-existing condition. However, if your old Medigap policy had the same benefits, and you had it for 6 months or more, the new insurance company can’t exclude your pre-existing condition. If you’ve had your Medigap policy less than 6 months, the number of months you’ve had your current Medigap policy must be subtracted from the time you must wait before your new Medigap policy covers your pre-existing condition.
If the new Medigap policy has a benefit that isn’t in your current Medigap policy, you may still have to wait up to 6 months before that benefit will be covered, regardless of how long you have had your current Medigap policy.
Can my Medigap insurance company drop me?
· If you bought your Medicare supplemental insurance plans after 1992, in most cases the Medigap insurance company can’t drop you because the Medigap policy is guaranteed renewable. This means your insurance company can’t drop you unless one of the following happens:
· You stop paying your premium.
· You weren’t truthful about something on the Medigap policy application.
· The insurance company becomes bankrupt or insolvent.
However, if you bought your Medicare supplemental insurance plans before 1992, it might not be guaranteed renewable. At the time these Medigap policies were sold, state laws might not have required that these Medigap policies be guaranteed renewable. This means the Medigap insurance company can refuse to renew the Medigap policy, as long as it gets the state’s approval to cancel your Medigap policy. However, if this does happen, you have the right to buy another Medigap policy. See guaranteed issue right, Situation #6 here.
What happens to my Medicare Supplemental Insurance Plans if I join a Medicare Advantage Plan?
Medigap policies can’t work with Medicare Advantage Plans. If you decide to keep your Medigap policy, you will have to pay your Medigap policy premium, but the Medigap policy can’t pay any deductibles, copayments, or coinsurance under a Medicare Advantage Plan. So, if you want to join a Medicare Advantage Plan, you may want to drop your Medigap policy.
However, if you leave the Medicare Advantage Plan you might not be able to get the same Medigap policy back, or in some cases, any Medigap policy unless you have a “trial right” (see guaranteed issue right,Situations #4 and #5 here. Your rights to buy a Medigap policy may vary by state. You always have a legal right to keep the Medigap policy after you join a Medicare Advantage Plan.
Can I keep my current Medigap policy (or Medicare SELECT policy) or switch to a different Medigap policy if I move out-of-state?
You can keep your current Medigap policy regardless of where you live as long as you are still in Original Medicare. If you want to switch to a different Medigap policy, you will have to check with the new insurance company to see if they will offer you a different Medigap policy. You may have to pay more for your new Medigap policy and answer some medical questions if you are buying a Medigap policy outside of your Medigap open enrollment period.
If you have a Medicare SELECT policy and you move out of the policy’s area, you have the following choices:
Buy a standardized Medigap policy from your current Medigap policy insurance company that offers the same or fewer benefits than your current Medicare SELECT policy. If you have had your Medicare SELECT policy for more than 6 months, you won’t have to answer any medical questions.
You have a guaranteed issue right to buy Medicare supplemental insurance plans A, B, C, F, K, or L that is sold in your state by any insurance company.
Why would I want to switch to a different Medicare Supplemental Insurance Policy?
There may be many reasons why you would want to switch to a different Medigap policy. Some reasons may include the following:
· You are paying for benefits you don’t need.
· You need more benefits than you needed before.
· Your current Medigap policy has the right benefits, but you are unhappy with the insurance company.
· Your current Medigap policy has the right benefits, but you would like to find one that is less expensive.
It is important to compare the benefits in your current Medigap policy to the benefits listed earlier.
If you live in Massachusetts click here
If you live in Minnesota click here
If you live in Wisconsin, click here
To help you compare benefits and decide which Medigap policy you want, you can follow the “Steps to buying a Medigap policy”. If you decide to change insurance companies, you can call the new insurance company and arrange to apply for your new Medigap policy. If your application is accepted, you can call your current insurance company and ask to have your coverage ended. The insurance company can tell you how to submit a request to end your coverage. As discussed on page 32, you should have your old Medigap policy coverage end after you have the new Medigap policy for 30 days. Remember, this is your 30-day free look period. You will need to pay both premiums for a month.
Do I have to switch Medigap policies if I have an older Medigap policy?
No. If you have an older Medigap policy that you bought before 1992, you don’t have to switch to one of the standardized Medigap policies. If you buy a newer Medigap policy, you won’t be able to go back to your old Medigap policy because older Medigap policies can no longer be sold.
Medigap policies and Medicare prescription drug coverage
Medicare offers prescription drug coverage (Part D) for everyone with Medicare. If you have a Medigap policy with prescription drug coverage that means you chose not to join a Medicare Prescription Drug Plan when you were first eligible. However, you can still join a Medicare Prescription Drug Plan. Your situation may have changed in ways that make a Medicare Prescription Drug Plan fi t your needs better than the prescription drug coverage in your Medigap policy. It is a good idea to review your coverage each fall, because you can join a Medicare Prescription Drug Plan between November 15—December 31 each year.
Why would I want to change my mind and join a Medicare Prescription Drug Plan?
Under a Medigap policy, you pay the whole premium for your prescription drug benefit. Also, most Medigap policies have a maximum amount they will pay each year for prescription drugs. In a Medicare Prescription Drug Plan, you may have to pay a monthly premium, but a large part of the cost is paid for by Medicare. There is no maximum yearly amount. However, a Medicare Prescription Drug Plan might only cover certain prescription drugs (on its “formulary” or “drug list”).
It is important that you check whether or not your current prescription drugs are on the Medicare Prescription Drug Plan’s list of covered prescription drugs before you join. If your Medigap premium, or your prescription drug needs, were very low when you had your first chance to join a Medicare Prescription Drug Plan, your Medigap prescription drug coverage may have met your needs. However, if your Medigap premium, or the amount of prescription drugs you use, has increased recently, a Medicare Prescription Drug Plan might now be a better choice for you.
Will I have to pay a late enrollment penalty if I join a Medicare Prescription Drug Plan now?
This will depend on whether or not your Medigap policy includes “creditable prescription drug coverage.” (This means that the Medigap policy’s drug coverage pays, on average, at least as much as Medicare’s standard prescription drug coverage.) If it isn’t creditable coverage, and you join a Medicare Prescription Drug Plan now, you will probably pay a higher premium (a penalty added to your monthly premium) than if you had joined when you were first eligible.
However, even with a somewhat higher premium it is quite possible that a Medicare Prescription Drug Plan could still better meet your needs at this time. You should also consider that your prescription drug needs could increase as you get older. Each month that you wait to join a Medicare Prescription Drug Planwill make your late enrollment penalty higher.
What if my Medigap policy includes creditable coverage?
You should still think about whether a Medicare Prescription Drug Plan might meet your needs better. If you decide to join a Medicare Prescription Drug Plan, you won’t have to pay a late enrollment penalty as long as you don’t drop your Medigap policy before you join the Medicare Prescription Drug Plan. You can only join a Medicare Prescription Drug Plan between November 15—December 31 each year unless you lose your Medigap policy (for example, if it isn’t guaranteed renewable, and your company cancels it). In that case, you can join a Medicare Prescription Drug Plan at the time you lose your Medigap policy.
Can I join a Medicare Prescription Drug Plan and have a Medigap policy with prescription drug coverage?
No. If your Medigap policy covers prescription drugs, you must tell your Medigap insurance company if you join a Medicare Prescription Drug Plan so it can remove the prescription drug coverage from your Medigap policy. This information is important because as soon as you notify your Medigap insurance company, they must adjust your premium to reflect the removal of your Medigap prescription drug coverage.
What if I decide to drop my entire Medigap policy (not just the Medigap prescription drug coverage)?
If you decide to drop the entire Medigap policy, you need to be careful about the timing. For example, you may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage), or you might decide to switch to a Medicare Advantage Plan (like an HMO or PPO) that offers prescription drugs.
If you drop your entire Medigap policy and the prescription drug coverage wasn’t creditable or you go more than 63 days before your new Medicare coverage begins, you will have to pay a late enrollment penalty. You can join a Medicare Advantage Plan between November 15—December 31 each year.
Medigap policies for people under age 65 and eligible for Medicare because of a disability or End-Stage Renal Disease (ESRD)
You may have Medicare before age 65 due to a disability or ESRD (permanent kidney failure requiring dialysis or a kidney transplant).
If you are a person with Medicare under age 65 and have a disability or ESRD, you might not be able to buy the Medigap (also called “Medicare Supplement Insurance”) policy you want, or any Medigap policy, until you turn age 65. Federal law doesn’t require insurance companies to sell Medigap policies to people under age 65. However, some states require Medigap insurance companies to sell you a Medigap policy, even if you are under age 65. These states are listed below.
As of the writing of this page, the following states required insurance companies to offer at least one kind of Medigap policy to people with Medicare under age 65:
• California* • Colorado • Connecticut • Delaware** • Hawaii • Illinois • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts* • Michigan • Minnesota • Mississippi • Missouri• New Hampshire • New Jersey • New York • North Carolina • Oklahoma • Oregon • Pennsylvania • South Dakota • Texas • Vermont* • Wisconsin
* A Medigap policy isn’t available to people with ESRD under age 65.
** A Medigap policy is only available to people with ESRD under age 65.
Even if your state isn’t on the list above, some insurance companies may voluntarily sell Medigap policies to people under age 65, although they will probably cost you more than Medigap policies sold to people over age 65, and they can use medical underwriting. Check with your state about what rights you might have under state law.
Remember, if you are already enrolled in Medicare Part B, you will get a Medigap open enrollment period when you turn age 65. You will probably have a wider choice of Medigap policies and be able to get a lower premium at that time. During the Medigap open enrollment period, insurance companies can’t refuse to sell you any Medigap policy due to a disability or other health problem, or charge you a higher premium (based on health status) than they charge other people who are age 65.
Because Medicare (Part A and/or Part B) is creditable coverage, if you had Medicare for more than 6 months before you turned age 65, you probably won’t have a pre-existing condition waiting period. If you have questions, call your State Health Insurance Assistance Program.
Definitions and Words To Know For Medigap Policies
Benefit Period—The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you go to a hospital or skilled nursing facility. The benefit period ends when you haven’t received any inpatient hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a skilled nursing facility after one benefit period has ended, a new benefit period begins.
Coinsurance—An amount you may be required to pay as your share of the costs for services, after you pay any plan deductibles. Coinsurance is usually a percentage (for example, 20%).
Copayment—An amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit or a prescription. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription.
Deductible—The amount you must pay for health care or prescriptions, before Original Medicare, your prescription drug plan, or other insurance begins to pay.
Excess Charges—If you have Original Medicare, and the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare-approved amount, the difference is called the excess charge.
Guaranteed Issue Rights (also called “Medigap Protections”)—Rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap policy. In these situations, an insurance company can’t deny you a Medigap policy, or place conditions on a Medigap policy, such as exclusions for pre-existing conditions, and can’t charge you more for a Medigap policy because of past or present health problems.
Guaranteed Renewable—An insurance policy that can’t be terminated by the insurance company unless you make untrue statements to the insurance company, commit fraud, or don’t pay your premiums. All Medigap policies issued since 1992 are guaranteed renewable.
Health Maintenance Organization (HMO) Plan—A type of Medicare Advantage Plan (Part C) available in some areas of the country. In most HMOs, you can only go to doctors, specialists, or hospitals on the plan’s list except in an emergency. Most HMOs also require you to get a referral from your primary care doctor.
Lifetime Reserve Days—In Original Medicare, these are additional days that Medicare will pay for when you are in a hospital for more than 90 days. You have a total of 60 reserve days that can be used during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance ($534 in 2009).
Medicaid—A joint Federal and state program that helps with medical costs for some people with limited incomes and resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.
Medical Savings Account (MSA) Plan—MSA Plans combine a high deductible Medicare Advantage Plan and a bank account. The plan deposits money from Medicare into the account. You can use the money in this account to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount so you generally will have to pay out-of-pocket before your coverage begins.
Medical Underwriting—The process that an insurance company uses to decide, based on your medical history, whether or not to take your application for insurance, whether or not to add a waiting period for pre-existing conditions (if your state law allows it), and how much to charge you for that insurance.
Medicare Advantage Plan (Part C)—A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans off er prescription drug coverage.
Medicare-approved Amount—In Original Medicare, this is the amount a doctor or supplier that accepts assignment can be paid. It includes what Medicare pays and any deductible, coinsurance, or copayment that you pay. It may be less than the actual amount a doctor or supplier charges.
Medicare Cost Plan—A type of Medicare health plan. In a Medicare Cost Plan, if you get services outside of the plan’s network without a referral, your Medicare-covered services will be paid for under Original Medicare. Your Cost Plan pays for emergency services, or urgently needed services.
Medicare Prescription Drug Plan (Part D)— A stand-alone drug plan that adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private- Fee-for-Service Plans, and Medicare Medical Savings Account Plans. If you have a Medigap policy without prescription drug coverage, you can also add a Medicare Prescription Drug Plan. These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.
Medicare SELECT—A type of Medigap policy that may require you to use hospitals and, in some cases, doctors within its network to be eligible for full benefits.
Open Enrollment Period (Medigap)—A one-time-only, 6-month period when Federal law allows you to buy any Medigap policy you want that is sold in your state. It starts in the first month that you are covered under Medicare Part B and you are age 65 or older. During this period, you can’t be denied a Medigap policy or charged more due to past or present health problems. Some states may have additional open enrollment rights under state law.
Original Medicare—Original Medicare is fee-for-service coverage under which the government pays your health care providers directly for your Part A and/or Part B benefits.
Pre-existing Condition—A health problem you had before the date that a new insurance policy starts.
Preferred Provider Organization (PPO) Plan—A type of Medicare Advantage Plan (Part C) available in some areas of the country in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
Premium—The periodic payment to Medicare, an insurance company, or a health care plan for health care or prescription drug coverage.
Private Fee-for-Service (PFFS) Plan—A type of Medicare Advantage Plan (Part C) in which you can generally go to any doctor or hospital you could go to if you had Original Medicare, if the doctor or hospital agrees to treat you. The plan determines how much it will pay doctors and hospitals, and how much you must pay when you receive care. A Private Fee-for-Service Plan is very different than Original Medicare, and you must follow the plan rules carefully when you go for health care services. When you’re in a Private Fee-for-Service Plan, you may pay more, or less, for Medicare-covered benefits than in Original Medicare.
Special Needs Plans—A special type of Medicare Advantage Plan (Part C) that provides more focused and specialized health care for specific groups of people, such as those who have both Medicare and Medicaid, who reside in a nursing home, or have certain chronic medical conditions
State Health Insurance Assistance Program (SHIP)—A state program that gets money from the Federal government to give free local health insurance counseling to people with Medicare.
