Medicare is a federal health insurance program for people over 65 years of age or better, and certain younger people with disabilities or End-Stage Renal Disease (permanent kidney failure). The program contains 2 parts:
Part A - Hospital Insurance
- Part A helps pay for care in hospitals, some skilled nursing facilities, hospice, and some health care.
- For most people, Part A is premium-free because they paid Medicare taxes while they were working.
Part B - Medical Insurance
- Part B helps pay for doctors, outpatient hospital care, and some other medical services that Part A does not cover, such as the services of physical and occupational therapists, and some home health services.
- You pay the Medicare Part B premium of $45.50 per month in 2000.
- You are automatically eligible for Part B if you are eligible for premium-free Part A. You are also eligible if you are a United States citizen or permanent resident age 65 or better.
It pays for much of your health care, but not all of it. You still pay for some costs yourself, unless you buy more insurance. This is where Medicare Supplement policies come to play. We will discuss this issue later on.
Medicare General Enrollment Period is from January 1 through March 31 of each year. You can sign up for Part A or Part B at your local Social Security Administration office. Part B coverage will start on July 1 of that year.
If you did not take Part B when you were first eligible because you or your spouse were working and had group health plan coverage through your or your spouse's employer or union, you can sign up for Part B during a Special Enrollment Period.
You can sign up anytime you are still covered by the employer or union group health plan through your or your spouse's current or active employment, or
Within 8 months of the date when the employer or union group health plan coverage ends, or when the employment ends (whichever is first).
If you are disabled and working (or you have coverage from a working family member), the Special Enrollment Period rules also apply. Most people who sign up for Part B during a Special Enrollment Period do not pay higher premiums. However, if you are eligible, but do not sign up for Part B during the Special Enrollment Period, the cost of Part B may go up.
What is a Medicare Supplement policy and how does it work?
A Medicare Supplement policy is sold by private insurance companies to fill the "gaps" in Original Medicare Plan coverage. In all but three states (Minnesota, Massachusetts, and Wisconsin), there are 10 standardized Medicare Supplement plans called "A" through "J". Each plan has a different set of standard benefits.
When a Medicare Supplement policy is purchased, you pay a premium to the insurance company. As long as you pay your premium, policies bought after 1990 are automatically renewed each year. This means that your coverage continue year after year as long as you pay your premium. You still much pay your monthly Medicare Part B premium.
Question: If I am in the original Medicare Plan, why would I buy Medicare Supplement Insurance?
Answer: Medicare Supplement Insurance may help you lower your out-of-pocket expenses and receive more health insurance coverage.
You may want to buy Medicare Supplement Insurance because the original Medicare program does not pay for all of your health care. There are "gaps" or costs that you must pay. Purchasing a Medicare Supplement Insurance policy may fill these "gaps" or costs.
When you purchase a Medicare Supplement Insurance policy you pay a premium to the insurance company selling the policy. As long as you pay your premium, policies bought after 1990 are automatically renewed each year. This means that your coverage continues year after year as long as you pay your premium. However, you still must pay your monthly Medicare Part B premium.
You do not need to buy a Medicare Supplement policy if you are in a Medicare managed care plan, Private Fee-for-Service plan, Medicare Medical Savings Account plan, or a Religious Fraternal Benefit plan.
In all but three states (Massachusetts, Minnesota, and Wisconsin), you can buy any one of up to 10 standardize Medicare Supplement policies (Plans A through J) that are sold in your state. Each standardized Medicare Supplement policy must cover basic benefits which includes:
- Inpatient Hospital Care: Covers the Part A coinsurance and the cost of 365 extra days of hospital care during your lifetime after Medicare coverage ends.
- Medical Costs: Covers Medicare Part B coinsurance (generally 20% of the Medicare approved payment amount).
- Blood: Covers the first 3 pints of blood each year.
Mutual of Omaha and State Mutual sells Plans A, C, D and F.
Question: When is the best time to buy a Medicare Supplement Insurance policy?
Answer: The best time to buy a Medicare Supplement Insurance policy is during your open enrollment period.
Your Medicare Supplement open enrollment period last for 6 months. It begins on the first day of the month in which you are both age 65 or over; and enrolled in Medicare Part B. If you buy a policy during your Medicare open enrollment period, the insurance company must shorten the waiting period for pre-existing conditions by the amount of previous health coverage (creditable coverage) you have.
Question: How can I tell if I am in my Medicare Supplement open enrollment period?
Answer: Your Medicare card shows the dates that your Part A and/or Part B coverage started. If you are age 65 or older, you can figure out whether you are in your Medicare open enrollment period by adding 6 months to the date that your Part B coverage starts. If that date is in the future, you are still in you Medicare open enrollment period. If that date is in the past, you have missed your Medicare open enrollment period.
Question: What situations give me the right to buy a Medicare Supplement policy after my open enrollment period ends?
Answer: There are certain situations involving health coverage changes where you may have the right to buy a Medicare Supplement policy after your open enrollment period ends. These are called "guaranteed issue" rights because insurance companies are required by law to issue you a policy.
- Your Medicare managed care plan or Private Fee-for-Service plan is leaving the Medicare program or stops giving care in you area; or
- You move outside your Medicare health plan's service area; or
- You leave the Medicare health plan because it failed to meets is contract obligations to you; or
- You are in an employer group health plan that supplemented or paid some of the coasts not paid for by Medicare, and the plan ends you coverage; or
- Your health coverage ends through no fault of your own; or
- You dropped your Medicare Supplement policy to join a Medicare managed care plan, or Private Fee-for-Service plan, or buy a Medicare Select policy for the first time, and then leave the plan or policy within one year after joining.
- You joined a Medicare Health plan when you first became eligible for Medicare at age 65, and within one year of joining you decided to leave the Medicare health plan.
In these conditions, the Medicare insurance company cannot deny you insurance, place conditions on a policy, or charge you more for a policy because of past or current health problems.
If you are under age 65 and disabled or have End-Stage Renal Disease, you may have the right to buy certain Medicare Supplement policies that are sold to people under age 65.
Question: Does the Medicare Supplement Insurance company pay my doctor directly?
Answer: The insurance company will pay your doctor or provider directly when:
- Your doctor or supplier has signed an agreement with Medicare to accept assignment of all Medicare claims for all people with Medicare;
- Your policy is a Medicare Supplement policy; and
- You tell your doctor's office to put on the Medicare claim form that you want Medicare insurance benefits paid to the doctor or supplier. Your doctor will put your Medicare Supplement policy number and company on the Medicare claim form. You will need to sign the claim form.
When these conditions are met, the Medicare Carrier will process the claim and send it to the Medicare Supplement Insurance company. You Medicare Supplement Insurance company will pay your doctor or provider directly and then send you a notice. If you don't get this notice, you may ask your insurance company for it.
In most cases, Medicare claims are sent directly to the insurance company, even if the doctor does not accept participation agreement.
Question: What happens if the Medicare Supplement Insurance company does not pay my doctor directly?
Answer: If the Medicare Supplement Insurance company does not pay your doctor directly (when the above 3 conditions are met), you should report this to your State Insurance Department.
Question: Can I pay on my own for services that are not covered by Medicare?
Answer: Yes, you may choose to pay on your own for services the original Medicare plan doesn't cover. You are always free to get non-Medicare-covered services on your own if you choose to pay for the service yourself.
Question: Can my Medicare Supplement Insurance company drop me?
Answer: In most cases, no. Medicare policies sold after 1990 are required to be guaranteed renewable. This means that your insurance company must let you renew your Medicare policy unless you do not pay the premiums, you lie, or commit fraud under the policy. There is only one situation where you may lose a Medicare guaranteed renewable policy: if the insurance company goes bankrupt.
In addition, insurance companies may refuse to renew older Medicare Supplement policies that were sold as guaranteed renewable. To do this, an insurance company must decide to cancel all policies of this type sold in your state.
Question: Do I have to switch my older Medicare Supplement policy for one of the newer standardized Medicare Supplement plans?
Answer: No, you do not have to switch your policy.
Question: If I decide to switch my Medicare Supplement policy, and then I change my mind, can I go back to my older Medicare Supplement policy?
Answer: No. If you do switch Medicare Supplement policies, you will not be able to go back to your Medicare Supplement policy if it was sold to you before 1990.
Question: Do I have to have my Medicare Supplement policy for a certain length of time before I can switch to a different Medicare Supplement policy?
Answer: No. However, if had a Medicare Supplement policy for at least 6 months and you decide to switch, your second Medicare Supplement policy generally must cover you for all pre-existing conditions. If you had a Medicare Supplement policy for less than 6 months, the new policy must give you credit for the time you were covered under the older policy. If there is a benefit in the second Medicare Supplement policy that was not in your first policy, the company can make you wait up to 6 months before covering that benefit.
Question: Do I need more than one Medicare Supplement policy?
Answer: No. It is illegal for insurance companies to sell you a second policy. If you already have a Medicare Supplement policy and you want to buy another one, you must sign a statement saying that you plan to cancel your first Medicare Supplement policy. Do not cancel your first policy until the second one is in place, the pre-existing condition waiting period is over, and you decide to keep the second Medicare Supplement policy. You have 30 days to decide if you want to keep the new policy. This is called your free look period.
If you have further questions relating to Medicare Supplement policies, please refer to your 2000 Medicare Supplement Buyer's Guide.
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