September 2008 Newsletter Articles

Top 5 Myths About Medicare Supplement Policies

Medicare Supplement Policies, also known as Medigap, can be a sound way to protect you against excessive healthcare costs. Below we’ve assembled the top 5 myths about Medicare Supplement policies.

1. Since Medigap plans are standardized, I don’t need to shop among different insurance companies. This is false. Even though the government has established the minimum benefits for each Medigap plan type, monthly premiums vary greatly among different insurance carriers offering the same plans.



2. Medigap and Medicare Advantage are basically the same thing. This is false. Medigap plans and Medicare Advantage plans can differ greatly from one another. They have different benefits, monthly premiums, and approved doctors and care facilities. Medicare Advantage plans also offer prescription drug coverage while Medigap plan enrollees use a stand-alone prescription drug plan. To determine which type of plan is best for you, you should compare these elements among the Medigap and Medicare Advantage plans available in your area.



3. I can enroll in Medigap even though I haven’t enrolled in Medicare Part B. This is false. In order to be eligible to enroll in a Medigap plan, you must already be enrolled in both Medicare Part A and Medicare Part B



4. A Medigap plan comes with prescription drug coverage. This is false. If you are going to enroll in a Medicare Supplement plan, you will also need to obtain a prescription drug plan.



5. Insurers that offer one type of Medigap plan must offer all 12 types of Medigap plans. This is false. An insurer may choose to offer only a subset of Medigap plans. Additionally, the states of Massachusetts, Minnesota, and Wisconsin do not offer all 12 Medigap plans.

Another myth not listed above is the belief that you need more than one Medigap plan. You should not enroll in multiple Medigap plans at a time. Agents who encourage the sale of multiple Medigap plans to a single individual are likely to be uninformed regarding your optimal insurance options or they are attempting to increase their sales commissions unethically.

For help identifying the Medigap plan best suited to your circumstances, try our free PlanPrescriber tool.

What Is the Difference Between Medicare Supplement and Medicare Advantage?

There is a lot of confusion among seniors regarding the differences between Medicare Supplement plans (also known as Medigap plans) and Medicare Advantage plans.

Let’s begin by first defining what each plan is. A Medicare Supplement plan is a private insurance policy that is designed to pay for some of the healthcare expenses not covered by original Medicare (i.e. Part A and Part B). There are 12 standardized Medicare Supplement plans which are labeled Plan A through Plan L. Each plan has a different combination of benefits and deductibles. Massachusetts, Minnesota, and Wisconsin are the only states that do not have the standard 12 plans. These states have a different set of Medicare Supplement options.

Medicare Advantage is a health plan, offered by a private insurance company that contracts with the government, to provide you with Medicare Part A and Part B benefits. A Medicare Advantage plan may include additional benefits that are not part of original Medicare such as prescription drug coverage. Medicare Advantage Plans may delivery their benefits through health maintenance organizations (HMO), preferred provider organizations (PPO), or private fee-for-service (PFFS).

So what are the differences between Medicare Supplement plans and Medicare Advantage plans? It’s not a simple question. Medicare Supplement plans are standardized so, for example, every Plan A has the same basic benefits regardless on the insurance company that provides the policy. Medicare Advantage, on the other hand, must provide all Medicare Part A and Part B coverage but, depending on the insurer and the specific plan, may cover much more than Part A and Part B benefits.

In some instances, a Medicare Advantage plan may lower your costs as compared to original Medicare Part A and Part B. However, for routine non-emergency care you may be restricted to a network of doctors that may or may not include your present doctor. Some Medicare Advantage plans offer prescription drug coverage (often for an additional monthly cost). With a Medigap plan, in contrast, you would need to enroll in a separate prescription drug plan. However, remember that total cost of drug coverage, as well coverage for the specific drugs you are taking, is of paramount importance when comparing your options.

Medicare Supplement plans do not have the in-network physician restrictions found in many Medicare Advantage plans. These policies only pay for healthcare services that Medicare considers medically necessary. Some Medicare Supplement plans offer benefits that go beyond original Medicare such as emergency care while traveling internationally.

When choosing between a Medicare Supplement plan and a Medicare Advantage plan, take the time to perform research. Remember that while Medicare Supplement plan types are standardized, their prices are not. Plan F from one insurance company may be significantly cheaper than Plan F from a different company. Read the benefit descriptions of every Medicare Supplement and Medicare Advantage plan you are considering. Be certain to note:

Monthly premiums

Deductibles

Doctor and healthcare facility restrictions

benefits

To compare Medicare Supplement plans and Medicare Advantage plans, visit www.planprescriber.com.

Why Are Medicare Supplement Plans Called “Medigap”?

The Medicare program was created to assist senior citizens with some of their hospitalization and medical costs. The key word here is “some”. There numerous areas where Medicare Part A and Part B pay only a portion of the health care costs charged to you. These healthcare expenses not covered by Medicare are referred to as “gaps” in Medicare coverage.

These Medicare coverage gaps potentially can be addressed by another health insurance policy. Medicare Supplement policies are specifically designed to cover some of the gaps associated with Medicare coverage and, hence, they have been referred to as Medigap plans. In most states (except Massachusetts, Minnesota, and Wisconsin) there are twelve different varieties of Medigap plans with each plan having differing coverage and deductibles.

To compare Medigap plans, visit www.planprescriber.com.