Medicare Supplement and Medicare Advantage Plans

Medicare is a federal health insurance program for people 65 years of age or older. Here is a brief description of the four (4) parts of Medicare.

Medicare Part A is hospital insurance. It helps pay for inpatient hospital care, skilled nursing facility care, hospice care, and some home health care. If you are eligible you do not need to pay for Part A. The new (2008) deductible for Part A is $1,024 for a hospital stay of 1 - 60 days.

Medicare Part B is medical insurance. It helps pay for doctors' services, outpatient hospital care, and some other medical services that Part A doesn't cover, like durable medical equipment and supplies. You must be enrolled in Part A to be eligible for Part B. Most people elect to enroll in Part B as soon as they become eligible. If you elect not to enroll, be advised that the cost of getting Part B will go up 10% for each full year that you could have had it, but did not enroll. Current (2008) monthly premium for Part B is $96.40 per month per person for individuals earning less than $80,000  per year. You pay 20% of the Medicare-approved amount for medical services, and 50% of the Medicare-approved amount for mental health services after meeting the $135 current (2008) annual deductible.

Medicare pays for much of your health care costs, but was not intended to pay for all of your costs.  Examples of costs not covered are prescription drugs, Part A and Part B deductibles, Part B coinsurance, the first 3 pints of blood, excess charges for medical care, and per diem charges for extended hospital stays.

Medicare Part C - Medicare Advantage is the new name for Medicare + Choice. If you decide to join a Medicare Advantage Plan, you will not need a Medicare Supplement policy because the provider of that plan will generally offer many of the same benefits. You will, however, have to pay the monthly Medicare Part B premium of $96.40 (in 2008) to Medicare.

Medicare Supplements are health insurance policies sold by private health insurance companies to fill these "gaps" in Medicare coverage. Hence the name Medigap policies. It is important to consider your current medical needs and to anticipate your future medical needs before buying a Medigap policy.

The best time to buy a Medigap policy is during your first 6 month open enrollment period. During this period, an insurance company can not deny you coverage, place conditions on a policy, or charge you more because of a pre-existing medical condition.

Medicare Part D - The Medicare Reform Bill of 2005 established a Medicare Prescription Drug Program. The  43 million seniors currently eligible for the program began receiving information in October 1, 2005. Sign-ups began November 15th and coverage began January 1, 2006. On average, seniors through out the county will pay a $32 monthly premium - with Californians paying on average a $25 monthly premium - for most of the drugs they need.

There is already a lot of confusion about eligiblity requirements and about specific coverages and out of pocket costs. The programs normally operate like this:

• the insured has an annual deductible of several hundred dollars
• then drug costs are shared between the carrier and insured to a yearly total of $2,400
• then a coverage gap where the insured pays full cost until reaching $3,850 annual out of pocket maximum
• then all, or most all, drug costs paid by the carrier 

 This is a voluntary program. If you have an existing Medicare Supplement policy with prescription drug coverage, contact your agent for advice about switching.

Understanding 2008 Open Enrollment

The 2008 Open Enrollment Period runs from 01-01-08 through 3-31-08. As a Medicare beneficiary, you are allowed to make just ONE CHANGE! This "one election rule" applies to both Medicare Advantage and Medicare Advantage with Prescription Drug plans. 

• If you enroll in a new Medicare Advantage plan, you will automatically be disenrolled from your current Medicare Advantage plan. 
• If you voluntarily disenroll from your current Medicare Advantage plan, you will automatically be returned to the original Medicare program. This becomes your "one election" for this period. You may not enroll in another Medicare Advantage plan for this period.
• If you wish to enroll in a new plan, DO NOT DISENROLL from your current plan. Disenrollment will happen automatically when you enroll in a new plan.
• You cannot add or drop Part D coverage during this period.
• You cannot enroll into an MSA Plan during this period.
• Your effective date will be the first of the month following receipt of a completed enrollment form.

You can contact the Medicare office directly by calling 800-MEDICARE, or by going to www.medicare.gov.

Call us for help selecting the best plan for you. We will mail a free Choosing a Medigap Policy guide.