Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Medicare Supplement Plan Changes Coming June 1

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If you buy your own Medicare insurance or soon will be, you should know about the changes  coming to Medicare Supplement, often called Medigap, plans beginning June 1, 2010.  But you don’t necessarily have to DO anything.

There will be two new Medicare Supplement plans – Plan M and Plan N and four plans will no longer be offered: Plans E, H, I and J. 

So what do you need to do?  

  • If you currently have a Medigap plan, you don’t have to change anything. But you might want to take a look at the new plans if you have experienced significant premium increases. 
  • If you are purchasing a policy that will be effective after June 1, your choices will be limited to these plans, – Plan A, B, C, D F, G, K, L, M, N.
  • If you are interested in purchasing Plan E, H, I or J, you must do it before June 1, 2010. 
  • If you have a Medicare Advantage plan now and think you might want to switch to a Medicare Supplement plan, you’ll generally have to wait until the open enrollment period begins Nov. 15. 

These changes aren’t the result of the recent health care reform bill, but from a law passed in 2003 that happens to take effect June 1, 2010.  And, don’t confuse this with Medicare Part A, Part B, Part C, and Part D.  Those “parts” refer to Medicare itself.  These “plan” changes are for Medicare supplement plans sold by private insurance companies.

Not all insurance companies offer all plans.  And some of the companies are still in the process of getting rates approved for the new plans. 

There’s always been a pretty clear line between Medicare Advantage and Medicare supplement plans.  Generally, Medicare Advantage required you to use a network and included cost-sharing (you pay co-pays when you visit the doctor and deductibles.)  Medicare Supplement pretty much covered the gaps left by Medicare – Medicare paid 80%, Medigap paid 20% — the plans differed by benefits covered but co-pays weren’t part of the deal. 

Plan N is a new plan that has some features that tend to be more associated with Medicare Advantage plans.  Plan N requires you to pay the Medicare Part B deductible ($155 in 2010) and up to $20 per office visit and up to $50 per emergency room visit.  That cost sharing may result in lower premiums, but if you frequent the doctor often, the premium savings will be offset by co-pays for visits to the doctor. Do the math to compare costs, and recognize that health can change in a minute – Are you prepared to pay the higher costs that could result? 

These changes make it more important than ever to shop and compare plans, benefits and total cost. If you are a member of the sandwich generation helping an older adult with their health care choices, make sure you ask a lot of questions before you consider a change to their plan just because of price.  Switching to a new plan may require underwriting.  If you speak with an agent who wants to switch you to a new plan from a different company than your current insurer, ask some questions.

Remember, the benefits of a Medicare supplement plan are the same no matter which insurance company you purchase a policy from — they are standardized.  But the price differences can be different and are from the prices I’ve seen so far for these new plans that start June 1.  Ask questions before you switch companies – about the stability of the company and its history on increasing rates and whether your application will be underwritten for medical conditions. 

Resources

To find out more about the changes in Medicare supplement plans,  you might want to read the free white paper “What’s all the noise about new Medicare plans” from Longevity Alliance. 

Buying A Medigap Policy booklet from Medicare– changes described

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Written by Laura Rossman

May 4, 2010 at 3:06 pm

One Response

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  1. Another good thing about the new medigap plan N is that it is guranteed issue so no need to worry about any critical illnesses in the past two years.

    dave

    July 16, 2010 at 6:38 pm


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