2010 Medigap Plan Changes

Effective June 1, 2010 there are planned changes to the current standardized Medigap policy offerings. These changes will impact all companies offering Medicare Supplement insurance.

History:
The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) included language to encourage the National Association of Insurance Commissioners (NAIC) to modernize the Medigap market. The NAIC decided to review the Medigap plans to determine if there were changes that could be made to the benefit packages in response to changes in the marketplace since the standardization of the product in 1990.

Summary of 2010 Changes:

Eliminates 4 Medigap Plans:

• Plan E, H, I, and J are eliminated

Modernizes Benefits:

• Eliminates the At-Home Recovery Benefit (Affects Plan D, G, I and J)
• Eliminates Preventive Care Benefit (Affects Plans E and J)
• Replaces the 80% Part B Excess Charges Benefit with a 100% benefit (Affects Plan G)
• Creates a new Hospice Benefit as part of Basic (Core) benefits (Affects all plans, starting 6/1/2010) :

1. Medicare offers a hospice benefit with a drug co-pay and inpatient respite care coinsurance. The 2010 modernized plans will now cover the expenses below as a core benefit
2. * $5 co-pay for outpatient prescription drugs for pain and symptom management* 5% of the Medicare-approved amount for inpatient respite care (short-term care given by another caregiver so the usual caregiver can rest). Does not include room and board

Creates New Plan Options:

• Plan M - with increased cost-sharing (including 50% coverage of Part A Deductible)
• Plan N - with new co-pay structure (will offer similar benefits to Plan F, but there will be a $20 co-payment for doctor visits and a $50 co-pay for emergency room visits - waived upon admission to the hospital).
• Both Plans M &N have all the core benefits plus the foreign Travel Emergency Benefit. And the cost of these plans will be approximately 75% of the cost of Plan F.

Summary:

• * Overall = Reduces number of plans from 14 to 11.
• * Plans E, H, I, and J are no longer offered due to duplicity as a result of benefit changes
• * Eliminates outdated and underutilized benefits
• * Adds new plans that feature higher cost sharing and lower anticipated premiums for policyholders.

Medicare Coverage: Medicare Advantage Vs. Medicare Supplement (Medigap)

• Medicare Advantage plans offer coverage with little or no monthly premiums. In some instances, you (the beneficiary) can actually receive money back every month!


• When enrolling in a Medicare Advantage plan, you are still part of the medicare Program and retain all of their medicare rights and protections.


• When joining a Medicare Advantage plan, you will continue to receive all of your regular Medicare-covered services. With medicare Advantage, you will also have access to additional services that neither Medicare Supplements nor Original Medicare can provide.


• Medicare Advantage plans can offer prescription drug coverage whereas Medicare Supplements do not.


• Medical providers may or may not accept some Medicare Advantage plans. Ask your Agent to help checking with your doctors prior to purchase a Private-Fee-for-Service (PFFS) plan. Some Medicare Advantage plans may have a published network of providers. Whereas most medicare Supplements are universally accepted.


• Agents who help you to enroll Medicare Advantage plans are required annual certification and strongly enforced marketing practices.


• With a Medicare Supplement, you must pay a premium whether you use it or not! With a medicare Advantage you only makes a small co-pay when you use the services.


• With a Medicare Advantage plan, you only have to answer ONE health question: Do you have End-Stage Renal Disease - ESRD (kidney failure)? Medicare Supplements may have multiple health questions.