Buying a Medigap
Policy
What are my Medigap policy choices?
In all but three states (Massachusetts, Minnesota,
and Wisconsin), you can buy any one of up to 10
standardized Medigap policies that are sold in your
state. Plan A is the "basic" benefit package and is
included in all the other plans. Insurance companies
must give you the benefits offered under each
policy.
Federal law lets states allow an insurer to add "new
and innovative benefits" to the benefits in a
standardized policy. Check with your insurance
company to find out if these benefits are available.
What is Medicare SELECT?
Medicare SELECT is a type of Medigap insurance
policy. If you buy a Medicare SELECT policy, you
are buying one of the 10 standardized Medigap
plans A through J. With a Medicare SELECT policy
you need to use specific hospitals and doctors to get
full insurance benefits (except in an emergency).
For this reason, Medicare SELECT policies
generally have lower premiums.
If you do not use a Medicare SELECT provider for
non-emergency services, you will have to pay what
Medicare doesn't pay. Medicare will pay its share
approved charges no matter what provider you
choose. Medicare SELECT might not be offered ill
your state.
Is there any other important information I need know?
There are many situations when your health coverage
changes (like losing your Medicare managed care
plan or employer coverage) that can affect what
Medigap policies you can buy and when. For more
information on your rights to buy a Medigap policy
in these situations, see pages 42-61.
What are the basic (core) benefits in all
standardized Medigap plans?
Coverage for the Part A coinsurance amount ($194
per day in 2000) for days 61-90 of a hospital stay
in each Medicare benefit period.
• Coverage for the Part A coinsurance amount
($388 per day in 2000) for days 91-150 of a
hospital stay while using Medicare's 60 lifetime
reserve days (which you may only use once).
• After you use up all Medicare hospital benefits,
coverage for 100% of the Medicare Part A eligible
hospital expenses. You have this coverage for up
to 365 more days of inpatient hospital care during
your lifetime. After you use up your Medigap
hospital benefits, you may have to pay the full
cost of hospital expenses.
• Coverage under Medicare Part A and Part B for
the reasonable cost of the first 3 pints of blood or
equivalent quantities of packed red blood cells per
calendar year unless this blood is replaced.
• Coverage for the coinsurance amount for Part B
services (generally 20% of Medicare-approved
amount) after you meet the $100 annual
deductible.
For a higher Medigap premium, you can buy extra
benefits.
Medigap Extra Benefits
Before you make any decisions about your health
care coverage, think about your personal needs.
Then, decide if the extra benefits offered are worth
the extra premium costs.
Medicare Hospital Deductible
Plans B, C, D, E, F, G, H, I, and J
Medigap Plans B through J cover the Medicare
hospital deductible, which is $776 in 2000. Keep in
mind that the additional cost that you pay in
premiums for this benefit is generally less than the
cost of paying the hospital deductible. Each time you
have to stay in the hospital you will have to pay the
deductible if it's the beginning of a new benefit
period.
Skilled Nursing Facility Coinsurance
Plans C, D, E, F, G, H, I, and J
Plans C through J cover the skilled nursing facility
coinsurance, which is $97 a day in 2000. Medicare
pays all of the covered costs for the first 20 days of
care in a skilled nursing facility. If you are in a
nursing facility for more than 20 days, Plans C
through J will pay the $97 a day coinsurance for
days 21 through 100.
Medicare Part B - Annual Deductible
Plans C, F, and J
Plans C, F, and J cover the Medicare Part B
deductible, which is $100 per year in 2000.
Foreign Travel - Emergency
Plans C, D, E, F, G, H, I, and JPlans C through J cover foreign travel emergencies.
This benefit pays for emergency care outside the
United States beginning the first 60 days of each trip.
After you meet the $250 deductible, this benefit pays
80% of the cost of your care for up to $50,000 in
your lifetime. If you travel, this benefit could save
you money for emergency care.
At-Home Recovery
Plans D, G, I, and J cover the cost of at-home help with
Plans D, G, I, and J
activities of daily living (like bathing and dressing) in
addition to Medicare-covered home health visits. You
can get this benefit if you are already getting Medicare-
covered home health care services. It also covers home
health care for up to 8 weeks after skilled care is no
longer needed. However, it will not pay more than $40
each visit and $1,600 each year.
Medicare Part B Excess Charge
Plans F, G, I, and J
Plans F, G, I, and J cover Medicare Part B excess
charges when your doctor charges more than Medicare
will pay. These policies pay the difference between
your doctor's charge and Medicare's approved amount.
Plans F, I, and J pay all of the excess charges. Plan 0
pays 80% of the excess charges. Under federal law,
doctors who don't accept "assignment" (take
Medicare's approved amount as payment in full) may
charge up to 15% more than the Medicare-approved
amount (some states have even stricter limits). For
example, if Medicare approves $100, your doctor can
charge as much as $115. Plan F, I, or J would cover the
$15 difference. Plan U would pay you $12 (80% of
$15).
Preventive Care
Plans E and J cover preventive care, which is limited to
Plans E and J
$120 each year. The preventive care benefit helps pay
for routine yearly check-ups, serum cholesterol
screening, hearing test, diabetes screening, and thyroid
function test.
Prescription Drugs
Plans H, I, and J offer some prescription drug coverage.
Plans H, I, and J
This benefit has a $250 yearly deductible and pays 50%
of drug costs that Medicare doesn't cover. It will only
pay up to $1,250 a year under Plans H and I, and up to
$3,000 a year under Plan J. You may think about this
benefit if you have high prescription drug costs.
Because it covers half your drug costs after the yearly
deductible, to get the full benefit under Plans H and I,
you should have at least $2,750 in drug costs in a year
(you pay $1,250 plus $250; plan pays $1,250). To get
the full benefit under Plan J, you should have at least
$6,250 in drug costs in a year (you pay $3000 plus
$250; plan pays $3,000). Note: In some states, you
may not be able to get policies with a prescription
drug benefit unless you enroll during your open
enrollment period.
More Information
For more information on Medigap policies, see the
chart on page 10 or use a computer to look on the
Internet at www.medicare.gov. Click on "Medigap
Compare."
What should I keep in mind as I shop for a
Medigap policy?
As you shop for a Medigap policy, keep in mind that
each company's benefits are alike, so they are
competing on service, reliability, and price. Compare
premiums and make sure that the insurance company
is honest and reliable before buying. Insurer rating
services look at the financial health of insurance
companies. Different rating services use different
rating scales. Be sure to find out how the rating
service labels its highest ratings and the meaning of
the ratings for the companies you are considering.
You can get ratings from some insurer rating
services for free at most public libraries. Your State
Insurance Department can also give you information
about the insurance companies (see pages 86-87).
You can also use a computer to look on the Internet
at www.medicare.gov. Click on "Medigap Compare."
Federal law lets states allow an insurer to add "new
and innovative benefits" to the benefits in a
standardized policy. Check with your insurance
company to find out if these benefits are available.
