People often ask me about Medicare Supplement insurance. It is actually more regulated on the federal level of government that Major Medical health insurance is for people not on Medicare. The Centers for Medicare and Medicaid Services, aka CMS have developed a handful of plans that insurance companies must sell if they wish to sell anything to people on Medicare.
The good thing about Medicare is that there is no premium for Part A of the plan and only nominal premiums for Parts B & D. Unfortunately, Medicare has no caps or limits on what they will pay and there are a few holes in the system that can cost a person on Medicare a significant chunk of change if the worst happens.
The Medigap plans are designed to pay for some or all of the medical expenses that Medicare does not. It is up to you, the consumer, to decide which plan best meets your needs. In the coming weeks TIB Tips will provide a brief description of the various plans we deal with.
The first Medigap plan we will discuss in Plan A. It is a basic plan that is available in all 3 states in which we operate; Indiana, Michigan and Texas.
Plan A is the most basic of the Medigap plans approved by CMS. It does a fairly decent job of providing supplemental insurance for people who are on Medicare. Plan A’s biggest limitations are that it will not pay anything towards either the Part A or Part B deductible. It also will not supplement expenses from a Skilled Nursing Facility.
Below is a brief description of what Medigap Plan A will do.
MEDICARE (PART A)
A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
If you have to go into the hospital Medicare and Medigap will combine to pay for a semiprivate room and board, general nursing and miscellaneous services and supplies as follows.
- First 60 days; Medicare will pay all but $1,132 (Part A Deductible)
- 61st through 90th day; Medicare pays all but $283 a day. Medigap will pay $283 a day.
- 91st day and an additional 60 of lifetime reserve days; Medicare will pay all your bills but $ 566 a day. Medigap will pay that $ 566.
- Once your lifetime reserve days are used up, if you are still in the hospital, Medicare will not pay any more for you. Medigap pays an additional 365 days of Medicare Eligible Expenses
Skilled Nursing Facility
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare approved facility within 30 days after leaving the hospital.
- First 20 days; Medicare will pay all approved amounts.
- 21st through 100th day; Medicare will pay all but $141.50 a day. Medigap Plan A will not pay the balance. You will have to pay all medical bills that Medicare does not.
- 101st day and after; neither Medicare nor Medigap will pay anything. At this point either you will pay the fees directly, use a private Long Term Care insurance policy or qualify for Medicaid.
If you find yourself in need of blood, Medicare will not help you. Medigap will pay for the first 3 pints. After that you are on your own.
You must meet Medicare’s requirements, including a doctor’s certification of terminal illness. Medicare will pay for all but very limited copayment/coinsurance for outpatient drugs and inpatient respite care. Medigap will pay what Medicare does not pay so that your estate has no bills that need to be settled in probate.
MEDICARE (PART B)
Medicare Part B is an optional program for which you have to pay a monthly premium to participate. These expenses are paid by Medicare if you have elected Part B of Medicare. They include expenses such as physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment.
Medicare will pay towards all of the expenses except for the first $162 of Medicare Approved Amounts. That is the deductible that you must pay before there are any benefits from Medicare B. Medigap Plan A will not pay towards that.
Plan A is not designed to cover anything that is covered by the optional Medicare B. If you have Medicare B it will pay 80% of Medicare Approved Amounts but you will be liable for the extra 20%, even though you have a Medigap.
Part B Excess Charges
If the medical provider you have elected to use is not contracted with Medicare to accept their lower reimbursement levels and charges more that Medicare is willing to pay, you will have to pay all the extra fees. Medigap Plan A will not help.
In the off chance that you need blood but are not hospitalized, there is a good chance it will be classified as a Medicare Part B claim. Medicare will not pay for it if you have not already met your Part B deductible for the year. Medigap, Plan A will pay for the first 3 pints but after that you will have to pay the Medicare deductible. After you have, Medicare will pay 80% of the Medicare Approved Amount and Medigap Plan A will pay the balance of the Medicare Approved Amount.
CLINICAL LABORATORY SERVICES
Here is one of the improvements to the Medicare system made by the PPACA. If you have Medicare Part B and require testing for diagnostic services Medicare will pay 100% of your medical bills.
HOME HEALTH CARE
In some, but not all, circumstances Medicare may pay for Medicare Approved Services. Please note that Medicare will only pay for medically necessary, skilled care services and medical supplies.
Medicare may also pay for durable medical equipment but only after the Medicare Part B Deductible has been met. After that Medicare B will pay 80% of Medicare Approved Amounts and Medigap Plan A will pay the remaining 20%.
Plan A is just one of the several types of Medigap plans available. In future weeks I will be providing descriptions of the other plans that are available through The Insurance Barn. If you cannot wait until then, read the CMS publication, “Choosing A Medigap Policy” or visit our Medigap Web Site to see which plans are offered in your state through our agency and how much they cost.
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