Medicare Supplement

Medicare Basics

Medicare is health insurance for:

  • People age 65 or older
  • People under age 65 with certain disabilities
  • People of any age with end-stage renal disease (ESRD: permanent kidney failure requiring dialysis or a kidney transplant)

These different parts of Medicare help cover specific services:

Original Medicare

  • Is run by the Federal government
  • Provides your Medicare Part A and Medicare Part B coverage
  • You can join a Medicare prescription drug plan (Medicare Part D) to add drug coverage
  • You can buy a Medigap policy sold by private insurance companies to help fill the gaps in Medicare Part A and Medicare Part B
  • coverage (such as coinsurance, copayments and deductibles)

Medicare Part A Hospital Insurance

Original Medicare helps cover inpatient care in hospitals, skilled nursing facility, hospice and home health care

Medicare Part A helps cover the following:

  • Inpatient care in hospitals (such as critical access hospitals, inpatient rehabilitation facilities, and long-term care hospitals)
  • Inpatient care in a skilled nursing facility (not custodial or long term care)
  • Hospice care services
  • Home health care services

You usually don’t pay a monthly premium for Medicare Part A coverage if you or your spouse paid Medicare taxes while working.

Medicare doesn’t cover everything. If you need certain services that Medicare doesn’t cover, you’ll have to pay out-of-pocket unless you have other insurance to cover the costs. Even if Medicare covers a service or item, you generally have to pay deductibles, coinsurance and copayments.

Medicare Part B Medical Insurance

Medicare Part B helps cover medically necessary services like doctors’ services, outpatient care, home health services and other medical services. Medicare Part B also covers some preventive services. You can find out if you have Medicare Part B by looking at your Medicare card.

You pay the Medicare Part B premium each month. Most people will pay the standard premium amount.

There are two kinds of Medicare Part B-covered services:

  1. Medically-necessary services are services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
  2. Preventive services include health care to prevent illness or detect it at an early stage, when treatment is most likely to work best (for example, Pap tests, flu shots, and colorectal cancer screenings).

Medicare doesn’t cover everything. If you need certain services that Medicare doesn’t cover, you must pay for them unless you have other insurance to cover the costs. Even if Medicare covers a service or item, you generally have to pay deductibles, coinsurance and copayments.

Original Medicare helps cover doctors’ services, outpatient care and home health care as well as some preventive services to help maintain your health and to keep certain illnesses from getting worse.

Medicare Part C Medicare Advantage Plans

A Medicare Advantage Plan (like an HMO or PPO) is another health coverage choice you may have as part of Medicare.

Medicare Advantage Plans, sometimes called Medicare Part C or MA Plans, are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, the plan will provide all of your Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) coverage. In all plan types, you’re always covered for emergency and urgent care.

Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if you’re in a Medicare Advantage Plan. Medicare Advantage Plans aren’t considered supplemental coverage.

Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage. In addition to your Medicare Part B premium, you usually pay one monthly premium for the services provided.

Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services, for example, whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan.

Medicare Advantage Plans include the following:

  • Health Maintenance Organization (HMO) Plans
  • Preferred Provider Organization (PPO) Plans
  • Private Fee-for-Service (PFFS) Plans
  • Medical Savings Account (MSA) Plans
  • Special Needs Plans (SNP)

Make sure you understand how a plan works before you join. Not all Medicare Advantage Plans work the same way, so before you join, find out the plan’s rules, what your costs will be, and whether the plan will meet your needs.

More About Medicare Advantage Plans

As with Original Medicare, you have Medicare rights and protections, including the right to appeal.

  • Check with the plan before you get a service to find out whether they will cover the service and what your costs may be
  • You must follow plan rules, like getting a referral to see a specialist or getting prior approval for certain procedures to avoid higher costs; check with the plan
  • You can join a Medicare Advantage Plan even if you have a pre-existing condition, except for End-Stage Renal Disease
  • You can only join a plan at certain times during the year
  • If you go to a doctor, facility, or supplier that doesn’t belong to the plan, your services may not be covered, or your costs could be higher, depending on the type of Medicare Advantage Plan
  • If the plan decides to stop participating in Medicare, you’ll have to join another Medicare health plan or return to Original Medicare

You can join, switch, or drop a Medicare Advantage Plan at these times:

  1. When you first become eligible for Medicare (the seven month period that begins three months before the month you turn age 65, includes the month you turn age 65, and ends three months after the month you turn age 65).
  2. If you receive Medicare due to a disability, you can join during the three months before to three months after your 25th month of disability. You’ll have another chance to join three months before the month you turn age 65 to three months after the month you turn age 65.
  3. Between November 15–December 31 each year. Your coverage will begin on January 1 of the following year, as long as the plan receives your enrollment request by December 31.
  4. Between January 1 – March 31 of each year. Your coverage will begin the first day of the month after the plan gets your enrollment form. During this period, you can’t do the following:
  5. Join or switch to a plan with prescription drug coverage unless you already have Medicare prescription drug coverage (Medicare Part D).
  6. Drop a plan with prescription drug coverage.
  7. Join, switch, or drop a Medicare Medical Savings Account Plan.

In most cases, you must stay enrolled for that calendar year starting the date your coverage begins. However, in certain situations, you may be able to join, switch, or drop a Medicare Advantage Plan at other times. Some of these situations include the following:

  • If you move out of your plan’s service area
  • If you have both Medicare and Medicaid
  • If you qualify for Extra Help to pay for your prescription drug costs
  • If you live in an institution (like a nursing home)

Call your State Health Insurance Assistance Program (SHIP) for more information.

A health coverage option run by private insurance companies approved by and under contract with Medicare:

  • Includes Medicare Parts A and B but can charge different amounts for certain services
  • May offer extra coverage and prescription drug coverage for an extra cost
  • Costs for items and services vary by plan
  • If you want drug coverage, you must get it through your plan (in most cases)
  • You don’t need a Medigap policy

Medicare Part D Prescription Drug Coverage

It’s a prescription drug option run by private insurance companies approved by and under contract with Medicare helps cover the cost of prescription drugs. May help lower your prescription drug costs and help protect against higher costs in the future

Medicare offers prescription drug coverage (Medicare Part D) to everyone with Medicare. To get Medicare drug coverage, you must join a Medicare Part D plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and the covered drugs.

There are two ways to get Medicare prescription drug coverage:

  1. Medicare Prescription Drug Plans. These plans add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans, and Medicare Medical Savings Account Plans.
  2. Medicare Advantage Plan (like an HMO or PPO) or other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Medicare Part A and B coverage, and prescription drug coverage (Part D), through these plans.

Medicare Supplement Basics

Original Medicare covers many health care services and supplies, but there are many costs it doesn’t cover. A Medigap policy is health insurance sold by private insurance companies to fill gaps in Original Medicare coverage.

Medigap policies don’t work with any other type of health insurance including:

  • Medicare Advantage Plans
  • Employer/union group coverage
  • Veterans Administration benefits
  • TRICARE

Medigap policies help pay your share (coinsurance, copayments, or deductibles) of the costs of Medicare-covered services. Some Medigap policies cover certain costs not covered by Original Medicare.

Your Out-of-pocket Costs with Medicare

This year, the bills not paid by Medicare are at their highest ever. It’s important that you consider insurance to help pay these costs.

Medicare Part A: Inpatient Hospital

Feature

Medicare Pays*

You Pay*

Deductible Nothing $1,132
First 60 Days 100% $0
Coinsurance 61-90 days All but $283 a day $283 a day
Coinsurance 91-150 days All but $566 a day $566 a day
Coinsurance 151+ days Nothing Eligible Expenses
Blood All but three pints Three pints
Skilled Nursing Facility Care First 20 Days 100% $0
Coinsurance 21-100 days All but 141.50 a day $141.50 a day
Coinsurance 101 days and after Nothing All

Medicare Part B: Supplemental Medical Coverage

Deductible Nothing $162
Coinsurance Generally 80% of Medicare approved expenses Generally 20% of Medicare approved expenses
Excess Benefits Nothing All
Blood All but three pints Three pints

Additional Benefit

Emergency Care Received Outside the U.S. Nothing All costs

Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as Medicare supplement insurance. Medigap insurance companies can only sell you a standardized Medigap policy identified by letters A through N. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. Cost is usually the only difference between Medigap policies sold by different insurance companies.

Your Out-of-pocket Costs with Medicare

This year, the bills not paid by Medicare are at their highest ever. It’s important that you consider insurance to help pay these costs.

Medicare Part A: Inpatient Hospital

Feature

Medicare Pays*

You Pay*

Deductible Nothing $1,132
First 60 Days 100% $0
Coinsurance 61-90 days All but $283 a day $283 a day
Coinsurance 91-150 days All but $566 a day $566 a day
Coinsurance 151+ days Nothing Eligible Expenses
Blood All but three pints Three pints
Skilled Nursing Facility Care First 20 Days 100% $0
Coinsurance 21-100 days All but 141.50 a day $141.50 a day
Coinsurance 101 days and after Nothing All

Medicare Part B: Supplemental Medical Coverage

Deductible Nothing $162
Coinsurance Generally 80% of Medicare approved expenses Generally 20% of Medicare approved expenses
Excess Benefits Nothing All
Blood All but three pints Three pints

Additional Benefit

Emergency Care Received Outside the U.S. Nothing All costs