Medicare Supplement Insurance Q & As

What is Medicare?
Medicare is a federal health insurance program for people 65 years of age or older and certain people with a disability or end-stage renal disease (permanent kidney failure). It pays for much of your health care, but not all of it. There are some costs that you will have to pay yourself. These are called your out of pocket costs.

What are Part A and Part B of Medicare?
Part A (Hospital Insurance) helps pay for inpatient hospital care, some skilled nursing facility care, hospice care, and some home health care. Part B (Medical Insurance) helps pay for doctors' services, outpatient hospital care, and some other medical services that Part A doesn't cover. Part B helps pay for such covered services and supplies when they are medically necessary.

What is a Medicare Supplement plan?
A Medicare supplement insurance plan is a health insurance policy sold by private insurance companies. They must follow federal and state laws. These laws protect you. The front of the Medicare supplement insurance plan must clearly identify it as “Medicare supplement insurance.” Costs that you must pay, like coinsurance, co-payments, and deductibles, are called “gaps” in original Medicare plan coverage.

You might want to consider buying a Medicare Supplement plan to cover these gaps in Original Medicare coverage. Some Medicare supplemental plans also cover benefits that the Original Medicare Plan doesn’t cover, like emergency health care while traveling outside the United States. A Medicare Supplement insurance plan may help you save on out of pocket costs. If you buy a Medicare supplemental insurance plan, you will pay a monthly premium to the private insurance company that sells you the policy.

What is Medicare drug coverage (Part D)?
Starting January 1, 2006, new Medicare drug coverage is available to everyone with Medicare. Everyone with Medicare can get this coverage that may help lower drug costs and help protect against higher costs in the future. Medicare drug coverage is insurance. A private insurance company will provide the coverage.

You choose the drug plan and pay a monthly premium. Like other health insurance, if you decide not to enroll in a drug plan when you are first eligible, you may pay a penalty if you choose to join later.

If you don’t join a Part D plan by May 15, 2006, and you don’t currently have a drug plan that, on average, covers at least as much as a standard Medicare drug plan, you will have to wait until November 15, 2006 to join.

When you do join, your premium cost will go up at least 1% per month for every month that you wait to join. Like other health insurance, you will have to pay this penalty as long as you have Medicare drug coverage. If you join by December 31, 2006, your coverage will begin January 1, 2007.

What are "open enrollment" and "guaranteed issue" in Medicare?
Open enrollment allows the applicant to be guaranteed a Medicare supplement insurance plan regardless of their current or past health history. Otherwise, the applicant must meet medical underwriting standards to qualify if required by the insurance company. Open enrollment includes a six-month period from the date you enrolled in Medicare Part B if age 65 or older, or a six-month period when you turn 65 if you were eligible for Part B benefits before age 65.

Also, if you are enrolled in a Medicare Advantage plan and you are involuntarily terminated by the plan due to the Medicare Advantage insurer ceasing to offer the insurance plan, or you're moving out of the insurance plan's service area or the plan becomes insolvent, within two months of the insurance plan's termination date you have a "guaranteed issue" right to buy Medicare supplemental insurance plans A, B, C or F without having to medically qualify.

Finally, if you enrolled in Medicare Part B at age 65 but remained covered under group insurance beyond the six month open enrollment period, upon termination of the group health coverage in many states, including Florida, residents are eligible for two months.

What is creditable coverage?
Creditable coverage is any previous health insurance coverage that can be used to shorten the pre existing waiting period, such as a health insurance coverage under a group (employer) health plan or an individual health insurance policy. However, if there was any time that you had no health insurance coverage of any kind, and during that time you were without health insurance coverage for more than 63 days in a row, you can only count the creditable coverage you had after the break in health insurance coverage.

What is a Medicare approved amount?
This is the fee that Medicare sets as reasonable, which providers who accept "Medicare assignment" will charge for a covered medical service. Otherwise, the Medicare approved amount may be less than the actual amount charged by a doctor or supplier for a service or supply.

Do I have to wait to switch to a different Medicare supplement policy?
No, but the length of time you've had your Medicare supplemental plan will affect how your new Medicare Supplement policy covers you for pre existing conditions. If you've had a Medicare Supplement insurance plan for at least six months and you decide to switch, your new Medicare supplemental insurance plan must cover you for all pre existing conditions. If you've had a Medicare supplemental insurance plan for less than six months, the new Medicare supplement policy must give you credit for the time the older policy covered you.

What happens to my Medicare supplement plan if I move?
Because your Medicare supplemental insurance plan is guaranteed renewable, you will still have insurance coverage if you move. If you move to a new state, however, the Medicare supplement insurer may quote you a different premium. If you have a Medicare Select insurance plan, which contain network restrictions, you must change your Medicare insurance coverage. But you have the right to buy Medicare supplemental insurance plans A, B, C or F in the state you move to without having to medically qualify.