Medigap

Medigap

Presented by Jared Daniel of Wealth Guardian Group

What is Medigap?

                  

Because original Medicare coverage has limitations, many people purchase supplemental insurance policies that are specifically designed to cover some of the gaps. These supplemental insurance policies, called "Medigap" policies, are sold by private health insurance companies, not the federal government. In general, you will not need a Medigap policy if your Medicare coverage is through a managed care plan (Medicare Advantage) or if you are qualified for Medicaid because you have low income; your managed care plan or Medicaid will generally fill the gaps in Medicare coverage.

                       

Note that:

·         You must have Medicare Part A and B in order to buy a Medigap policy.

·         A Medigap policy only covers one person. Spouses will need to buy separate Medigap policies.

·         The monthly premium you pay to the insurance company for your Medigap policy is in addition to the monthly Part B premium you pay to Medicare.

What services are covered?                

The federal government generally requires that only 10 kinds of plans (Plans A through D, Plans F and G, and Plans K through N) can be offered as Medigap plans; these plans must be clearly identified as "Medicare Supplemental Insurance." All plans must cover these services:

                       

·         Part A coinsurance costs up to 365 extra days of hospital care after Medicare benefits are used up

·         Part B coinsurance or co-payment (Plan K covers 50 percent and Plan L covers 75 percent)      

·         The first three pints of blood (Plan K covers 50 percent and Plan L covers 75 percent)

·         Part A hospice care coinsurance or co-payment (Plan K covers 50 percent and Plan L covers 75 percent)

The Plan A Medigap policy will cover only the above expenses. Other plans offer Plan A benefits plus some combination of these additional benefits:

                       

·         Full or partial coverage of your Part A deductible ($1,216 for each inpatient hospital stay in 2014)                        

·         Full coverage of your Part B deductible ($147 in 2014)                                

·         Full or partial coverage of the daily co-payment requirement for the 21st to 100th day of skilled nursing facility care ($152 per day in 2014)                           

·         Medically necessary emergency care during the first two months of each trip outside the US, after you pay a $250 deductible (up to plan limits)                                    

·         Medicare Part B excess charges                              

·         Medicare preventive care Part B coinsurance costs                                    

·         Full coverage of Medicare Part A and Medicare Part B coinsurance, co-payments, and deductibles after out-of-pocket maximum  has been reached    

Medigap Plans: Benefits Offered
Plan	A	B	C	D	F*	G	K	L	M	N
Plan A Coinsurance	X	X	X	X	X	X	X	X	X	X
Plan B Coinsurance or Co-payment	X	X	X	X	X	X	50%	75%	X	X**
Blood (First Three Pints)	X	X	X	X	X	X	50%	75%	X	X
Hospice Care Part A Coinsurance or Co-payment	X	X	X	X	X	X	50%	75%	X	X
Skilled Nursing Coinsurance			X	X	X	X	50%	75%	X	X
Part A Deductible		X	X	X	X	X	50%	75%	50%	X
Part B Deductible			X		X
Part B Excess Charges					X	X
Foreign Travel Emergency Care			X	X	X	X			X	X
Preventive Care Part B Coinsurance	X	X	X	X	X	X	X	X	X	X
Out-of-Pocket Maximum Applies							$4,940	$2,470

*Plan F also offers a high-deductible plan with a deductible of $2,140.

**Plan N pays 100 percent of Part B coinsurance except up to a $20 co-payment for office visits and up to $50 for emergency room visits.

All plans may not be offered in your state, yet all are standardized and certified by the U.S. Department of Health and Human Services so that each plan provides exactly the same kind of coverage no matter what state you live in (except for Massachusetts, Minnesota, and Wisconsin, which have their own standardized plans).

                       

Caution:         This chart shows plans and benefits available for new Medigap policies sold on or after June 1, 2010. If you currently have Medigap insurance that was purchased before June 1, 2010, policy benefits may be different, or you may have a plan that is no longer sold (Plans E, H, I, or J). If so, you can keep that plan as long as you continue to pay the premiums, and plan benefits won't change.

                                   

What consumer safeguards are available?        

The federal government has mandated that several consumer safeguards be required in all Medigap plans:

                       

·         There must be what is called a "free-look" provision, permitting you to get a full refund of any money you paid if you decide to cancel the policy within a certain time period, usually 30 days. The specific time period may actually be longer in your state.                              

·         The policy must be guaranteed renewable, unless you don't pay your premiums or if you make   false statements on your application.                                 

·         If you purchase Medigap insurance within six months of enrolling in Part B (your open enrollment period), you cannot be denied coverage, regardless of any illnesses or medical conditions you may have, although you may have to wait up to a maximum of six months to get coverage of a pre-existing condition. Pre-existing conditions are any illnesses you had before signing on to an insurance plan.

·         However, if you had at least six months of continuous prior creditable coverage (you didn't have a break in coverage for more than 63 days), your new policy cannot restrict or deny payment for pre-existing conditions.                             

·         An insurance company cannot sell you a policy that substantially duplicates any existing coverage you have, including Medicare, or  sell you more than one Medigap policy.                    

·         An insurance company cannot claim a policy is a Medigap policy if it duplicates Medicare coverage.                        

·         If an insurance company offers a plan that looks like a Medigap policy but does not conform to one of the standardized plans, there must be a clear disclaimer that it is not a Medigap policy.

In addition, most regulation of insurance is actually done on the state level, and there may be additional consumer safeguards in your state.

What is Medicare SELECT?

         

Medicare SELECT is offered in some states as a managed care Medigap plan that provides full coverage only if you use the plan's network of health care providers. These policies have lower premiums than the Medigap plans that do not restrict your choice of provider.              

Can you use your employer plan as your Medigap?

                   

If you plan to keep working past age 65, you may choose to keep your employer-provided health insurance as well as sign up for Medicare. Since Part A coverage is free, you may want to sign up for it when you reach age 65. However, you may want to wait to enroll in Medicare Part B until your employer coverage ends, because once you enroll in Part B, your open enrollment period for Medigap starts. If you don't buy a Medigap policy within six months, you may be denied coverage later or charged a higher premium.

If you're covered by an employer-sponsored plan after you retire, your employer's plan may cover costs that Medicare doesn't, so you may not need to purchase a Medigap policy. If you have any questions about your coverage, talk to your employer's benefits coordinator.

Jared Daniel may be reached at www.WealthGuardianGroup.com or our Facebook page.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.

Medicare Part D Prescription Drug Coverage

Medicare Part D Prescription Drug Coverage

Presented by Jared Daniel of Wealth Guardian Group

What is Medicare Part D prescription drug coverage?

The Medicare program, which is a federal program that helps senior citizens and certain other individuals pay for health care, is divided into four parts. Part A covers hospital and inpatient services and Part B covers doctor visits and other outpatient services. Together, Parts A and B are referred to as original Medicare. Part C, also known as Medicare Advantage, makes Medicare-covered services available through private health plans, such as HMOs, PPOs, and private fee for service plans (PFFSs). Part D prescription drug coverage is offered by private companies through stand-alone plans (for members who have original Medicare) and through HMOs, PPOs, and PFFSs (for beneficiaries who have Medicare Advantage). Anyone who has original Medicare or Medicare Advantage is eligible to enroll in Part D. Enrollment in Part D is voluntary.

Tip:     You may already have prescription drug coverage through your Medicare Advantage plan, private health insurance such as Medigap, or your employer or former employer's health plan. You can generally opt either to keep that coverage or join a Medicare prescription drug plan instead.

What is covered under Part D?

In general

Private companies that offer Part D coverage are allowed to design their own benefit plans, as long as the overall value of the plan is at least as good as the basic plan outlined in the 2003 Medicare Act. So, different plans offer different lists of medicines (called a formulary), and different costs. Beneficiaries should compare the different drug plans available in their area to find the one that best suits their needs.

Tip:     The Medicare website provides an online tool to help you compare drug plans.

The basic plan

The basic plan generally meets the following criteria:

·         The annual deductible can't be more than $310 (in 2014)

·         The plan must cover at least two drugs in each drug class

·         The plan must cover substantially all drugs in these six categories: antidepressants, antipsychotics, anticonvulsants, antiretrovirals (AIDS treatments), anticancer drugs, and immunosuppressants

·         Members must be able to seek an exception if a drug is medically necessary but not covered under the plan

·         Plans must have a network of pharmacies that provide convenient access

·         Lists of covered drugs and pharmacy networks must be readily available to members

·         Plans must work with nursing homes

·         Plans must help transition a member's current drug coverage

·         Plans must offer catastrophic coverage that is at least as good as the coverage outlined in the 2003 Medicare Act

What is not covered

Some drugs are generally not covered by Medicare Part D, including:

·         Over-the-counter drugs

·         Most prescription vitamins and minerals

·         Certain anti-anxiety and anti-seizure drugs

·         Fertility drugs

·         Drugs for weight loss or gain, and anorexia

·         Cosmetic and hair growth drugs

·         Drugs that treat symptoms of the common cold (e.g., coughs, congestion)

·         Drugs covered under Part A or Part B

Tip:     For information on Medicare Part D rights and protections, go to www.medicarerights.org.

How much does it cost?

How much you'll pay for Medicare drug coverage depends on which plan you choose. But in general, here's what you can expect to pay in 2014:

·         Monthly premium: Most plans charge a monthly premium. Premiums vary, but average $31. (Source: Centers for Medicare and Medicaid Services.) This is in addition to the premium you pay for Medicare Part B. You can have the premium deducted from your Social Security check, or you can pay your Medicare drug plan company directly. Note that beneficiaries with high incomes will be required to pay a higher Part D premium than other beneficiaries.

·         Annual deductible: Most plans require you to satisfy an annual deductible of up to $310.

·         Co-payments: Once you've satisfied the annual deductible, if any, you'll need to pay 25 percent of the next $2,540 of your prescription costs (i.e., up to $635 out-of-pocket) and Medicare will pay 75 percent (i.e., up to $1,905). After that, there's a coverage gap; you'll need to pay 100 percent of your prescription costs until you've spent an additional $3,605 (some plans offer coverage for this gap). However, once your prescription costs total $6,455 (i.e., your out-of-pocket costs equal $4,550--you've paid a $310 deductible + $635 + $3,605 in drug costs, and Medicare has paid $1,905), your Medicare drug plan will generally cover 95 percent of any further prescription costs. For the rest of the year, you'll pay either a coinsurance amount (e.g., five percent of the prescription cost) or a small co-payment for each prescription.

Caution:         Costs and limits may change each year, and not all plans will work exactly this way.

Caution:         Health-care legislation passed in 2010 gradually closes the prescription drug coverage gap. In 2014, if you have spending in the coverage gap, you'll receive a 52.5 percent discount on brand-name drugs, and a 28 percent discount on generic drugs. Other changes will take effect in future years.

Tip:     Extra help with Medicare drug plan costs is available to people who have limited income and resources. Medicare will pay all or most of the drug plan costs of seniors who qualify for help. You can get an application for help from Medicare, or you can pick up one up at your local pharmacy.

Enrolling in Part D

Medicare prescription drug coverage is available in two ways:

·         You can join or remain in a Medicare Advantage plan that provides all your Medicare benefits, including Part D benefits

·         You can enroll in a stand-alone plan, which will cover only Part D while you continue to get your other services through original Medicare

Caution:         If you are in an HMO or PPO, you must receive drug coverage through that plan.

If you are currently enrolled in Medicare, you can enroll in Part D (or make changes in your Part D coverage) from October 15 though December 7 of each year (the annual election period). If you're new to Medicare, you have seven months to enroll in a drug plan (three months before, the month of, and three months after becoming eligible for Medicare). If you qualify for special (extra) help, you can enroll in a drug plan at anytime during the year.

If the initial enrollment period is missed, you will be able to enroll (or disenroll, or change drug plans) during the annual election period. However, a premium penalty will generally apply unless the reason you didn't join sooner was because you already had prescription drug coverage that was at least as good as the coverage available through Medicare.

Caution:         You will be unable to enroll, disenroll, or change drug plans during the annual Medicare open enrollment period (OEP), which is January through March each year.

You can join or change plans during a special enrollment period (SEP) in certain situations, including (but not limited to):

·         Moving out of your plan's service area

·         Losing drug coverage provided by a non-employer through no fault of your own

·         Losing employer-provided drug coverage for any reason

·         Losing full Medicaid coverage

·         Entering, residing in, or leaving a long-term care facility

Tip:     Medicare beneficiaries can switch to a 5-star Medicare prescription drug plan during a Special Enrollment Period that runs from December 8, 2013 through November 30, 2014 if one is available in their area (limited to one plan change per year). A 5-star plan is one that has been rated as excellent by Medicare. Beneficiaries whose Medicare Part D drug plan fails for three straight years to achieve at least a 3-star quality rating will also be offered a special enrollment period that will allow them to move to a higher-rated plan.

Jared Daniel may be reached at www.WealthGuardianGroup.com or our Facebook page.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.

Medicare Part C (Medicare Advantage)

Medicare Part C (Medicare Advantage)

Presented by Jared Daniel of Wealth Guardian Group

What is Medicare Part C (Medicare Advantage)?

The Medicare program, which is a federal program that helps senior citizens and certain other individuals pay for health care, is divided into parts; Part A, Part B, Part C, and Part D. Part C is an alternative to Parts A and B.

When Medicare was created in 1965 (original Medicare), it provided only two parts; Part A and Part B. Generally speaking, Part A is free to eligible recipients and helps pay for in-hospital care. Part B is optional and helps pay for regular medical care (e.g., doctor's bills, X-rays, lab tests). Individuals who choose to enroll in Part B must pay a premium, a deductible, and co-payments.

Original Medicare is a private fee-for-service (PFFS) plan, which means that beneficiaries can choose any doctor or specialist who accepts Medicare, and is available nationwide. Original Medicare is administered directly by the federal government, although claims and payments flow through private health insurance companies that act as intermediaries.

In 1997, Medicare Part C (originally called Medicare + Choice) became available to persons who are eligible for Part A and enrolled in Part B. Under Part C, private health insurance companies can contract with the federal government to offer Medicare benefits through their own policies. Insurance companies that do so are able to offer Medicare beneficiaries health coverage not only through PFFSs, but also through managed care plans (such as HMOs) and preferred provider organizations (PPOs). Medicare beneficiaries may also be able to enroll in Medicare Medical Savings Account Plans (Medicare MSAs) or HMO Point-of-Service Plans if available in their area.

Insurance companies can offer Medicare recipients benefits that are not covered under original Medicare, although a premium may be charged for the extra coverage. Further, managed care plans and PPOs can typically offer Medicare recipients benefits at a lower cost because enrollees can only get covered health care through the plan's network of providers, allowing the insurance company to "manage" the costs. The result is that many Medicare beneficiaries (some plans are not available in all areas) have a wider array of health plan options from which they can choose, allowing them to obtain the best coverage they can get at a cost they can afford.

In 2003, under the Medicare Prescription Drug, Improvement, and Modernization Act, Medicare Advantage became the new name for Medicare + Choice plans, and certain rules were changed to give Part C enrollees better benefits and lower costs. The law also created Part D, prescription drug coverage.

In 2010, health-reform legislation made several changes to Medicare Advantage plans, including eliminating subsidies paid to plans, changing open enrollment periods, and strengthening protections for beneficiaries. Plans must now spend 85 percent of their revenue on patient care and must cap enrollees' out-of-pocket costs.

Tip:     A toll-free number ((800) MEDICARE) and a website (www.medicare.gov) are available to answer questions you may have about your Medicare benefits and direct you to publications where you can find more information. The Medicare Health Plan Compare tool available on the website also allows you to find and compare health plans that are available in your area.

Tip:     The federal government now offers Medicare benefits through PPOs (not to be confused with Medicare Advantage PPOs) as well as through PFFSs.

Enrolling in a Medicare Advantage plan

In order to enroll in a Medicare Advantage plan, you must be entitled to Part A and enrolled in Part B, and you can only enroll in a plan that is available in your area. If you're new to Medicare, you can generally enroll when you first become eligible (three months before the month you turn 65 until three months after the month you turn 65). However, once you're enrolled in a Medicare Advantage plan, you can generally make changes to your plan only during certain time periods. Currently, one such period occurs from October 15 through December 7 of each year. During this time period, you can select a new Medicare health plan and/or a Medicare prescription drug plan or make other changes to your coverage for the following year. If you're enrolled in a Medicare Advantage plan as of January 1, you also have an opportunity to disenroll and return to original Medicare and join a prescription drug plan between January 1 and February 14. And as of December 8, 2011, you can switch to a 5-star Medicare Advantage plan at any time during the year if one is available in your area (you're limited to one plan change per year). A 5-star plan is one that has been rated as excellent by Medicare. For more information about when you can join or switch Medicare plans, call (800) Medicare.

Tip:     You generally can't join a Medicare Advantage plan if you have end-stage renal disease.

Why choose a Medicare Advantage plan?

When you enroll in any Medicare Advantage plan, you will still get all original Medicare covered services, but you may also obtain extra benefits and services not offered by original Medicare, and/or you may be able to reduce your out-of-pocket costs. The extra benefits and services you receive and/or the amount of money you save will depend on which Medicare Advantage plan you choose.

Because out-of-pocket costs and the types of coverage offered will vary, it's important to compare plans before choosing one. Because private insurance companies offer Medicare Advantage plans, they can change the extra benefits provided by the plan and decide (on an annual basis) whether they will continue participating in Medicare. Health care providers can also join or leave the plan at any time.

Caution:         Depending on the Medicare Advantage plan you choose, you may decide to cancel an existing Medigap policy because you will no longer need the extra coverage the policy provides. However, you should be aware that if you do so, you may be unable to get it back except in certain situations. If you've just become eligible for Medicare or if it is the first time you've enrolled in a Medicare Advantage plan, you may have special Medigap protections.

Medicare Advantage private fee-for-service plans

These plans are generally the most flexible and most costly. They allow you to see any Medicare-approved health care provider who accepts the terms of your plan.

Tip:     If you enroll in a Medicare Advantage private fee-for-service plan, you don't need a Medigap policy, and it generally isn't legal for any company to sell you one. However, you can keep an existing Medigap policy if you so choose.

Medicare Advantage managed care plans

You may save the most money on your health costs by joining a Medicare Advantage managed care plan. However, your choice of health care providers is more limited than with other options--you're generally covered only when you see doctors and specialists, or go to hospitals that are part of the plan's network of providers, within the plan's service area. When you choose a Medicare Advantage managed care plan, you'll need to choose a primary care physician who will oversee your care and refer you to specialists when necessary.

Medicare Advantage PPOs

With Medicare Advantage PPOs, you will generally only see health care providers within the plan's network, but, unlike Medicare Advantage managed care plans, you can choose doctors and services outside the PPO network for a fee, and you do not need referrals to see a specialist.

Choosing the right Medicare Advantage plan

There's a lot to consider when deciding which Medicare option is right for you. Here are some questions to ask during the decision-making process:

·         How much is the premium?

·         Will you need to satisfy a deductible or pay co-payment or coinsurance costs? Medicare Advantage plans have an annual cap on how much you pay for Part A and Part B services. This will differ among plans.

·         Does the plan cover the extra benefits or services you need (such as coverage for vision, hearing, dental, or health and wellness programs)? Does the plan offer prescription drug coverage (most Medicare Advantage plans do)?

·         Do the health care providers you normally see participate in the plan?

What if your Medicare Advantage plan leaves the Medicare program?

You still have Medicare coverage. You can return to original Medicare or join another Medicare Advantage plan if one is available where you live. Your options will be listed in the notification letter you are sent when your plan leaves the Medicare program.

Consumer protections under Medicare Part C

Under Medicare Part C, consumers are offered several protections designed to enhance the quality of care they receive, including the right to information, the right to participate in treatment decisions, the right to get emergency services, and the right to file complaints. In addition, your state insurance laws may provide additional consumer protections.

What are your appeal rights?

You have the right to appeal any decision about your Medicare-covered services, whether you are enrolled in original Medicare or a Medicare Advantage plan. You can file an appeal if your plan does not pay for or provide a service or item you think should be covered or provided. The appeal procedure may vary, depending on the type of Medicare plan you have. If you are enrolled in original Medicare, you can find your appeal rights on the back of the Explanation of Medicare Benefits or Medicare Summary Notice you received. If you are enrolled in a Medicare Advantage plan, the plan must give you written notification of your appeal rights; this will generally be included in your Medicare enrollment materials.

Medicare beneficiaries also have the right to a fast-track appeals process. If you believe that your health plan is ending its services too soon, you can ask for a quick review of your case conducted by independent doctors. You may have additional rights if you are hospitalized, in a skilled nursing facility or if your home health care ends.

Jared Daniel may be reached at www.WealthGuaridanGroup.com or our Facebook page.

IMPORTANT DISCLOSURESBroadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials.  The information in these materials may change at any time and without notice.