Switching Medicare Supplement (Medigap) policies

Reasons Why New Yorkers Switch Their Medigap Policies:

As a reminder, Medicare Supplement, also known as Medigap, are policies designed primarily to supplement (or fill the gap) Medicare benefits. You simply present your red, white and blue Medicare card to the provider or facility along with the Supplement / Medigap card to help with out-of-pocket costs; such as deductible and co-insurance amounts with Original Medicare Part A  and Part B.

Currently, there are 10 standardized Medigap plans, each represented by a letter (A, B, C, D, F, G, K, L, M, N; there’s also a high-deductible version of Plan F). These plans are available in most states.  While premiums will vary from state to state the standardized benefits of each lettered plan remain the same despite the insurance company or location. For example, Plan F benefits are the same in Florida as they are in New York.

Q: Is there an Annual / Open Enrollment Period?

Most people buy their Medicare Supplement / Medigap policy during the six month period after they first enroll in Medicare.   After that, in many states,  Medigap insurance companies are generally allowed to use medical underwriting to decide whether to accept your application and how much to charge you for the Medigap policy.

Q: So How Do New York State Residents Have More Protection?

New York State laws and regulations continue this open enrollment period. A person enrolled in Medicare Parts A and B may purchase a Medigap policy at any time. Insurers may not consider an applicant’s health status, claims experience, or age.  Laws in New York also prohibit insurers from basing Medigap premiums on age and charging a higher premium as they grow older.  Also,

Q: But What About Pre-Existing Conditions; Are They Covered?

Medigap insurers may impose up to a six-month waiting period to be covered for any preexisting conditions a person may have. Federal law and New York State regulation define a preexisting condition as any condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

Under New York State regulation, the waiting period may be either reduced or waived entirely, depending upon whether an individual has had previous health insurance coverage. Medigap insurers are required to reduce the preexisting condition waiting period by the number of days an individual was covered under some form of “creditable” coverage so long as there were no breaks in coverage of more than 63 calendar days.   Translation: If you are switching from a “creditable” plan that you have held consecutively for six months, New York regulation requires the new Medicare Supplement / Medigap plan to reduce or waive the six month pre-existing condition waiting period.

Questions about Switching a MediGap Policy?

Please call me at (518) 346-2115 or send a quick note with your contact information and question.

Please visit and follow via Facebook Page. Daniel G. Alcorn, a licensed and independent agent, represents licensed insurance companies in New York and other states.  Dan may receive compensation for individual enrollments in Medicare Advantage, Medicare Supplemental Insurance , Medicare Prescription Drug or Long Term Care plans.

When what we do helps someone… February 2017

…. it’s great to hear results.    Read more of this post

“What’s The Donut Hole?”

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On January 1, 2006, the US federal government introduced a program to subsidize the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries.  You must enroll in a Part C (Medicare Advantage with Drug) or Part D (Stand Alone Prescription Drug) plan to participate in this federal-government-subsidized drug program.

Here’s a summary on how these plans work.

In 2017, Part C and Part D plans often require you to first pay a defined deductible, then use tiered drug co-payments from you up to an initial coverage limit of $3700 – which is the full retail cost of prescriptions. Once this $3700 initial coverage limit is reached, you will have to pay a larger cost share of your prescription drugs up until your total out-of-pocket expenses (deductible and copay expense excluding) reaches $4,950 infamously referred to as the “Donut Hole”.

donut-hole

Let’s review the Four Stages:

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Stage 1: Deductible, if applicable

Similar to many auto and home insurance plans, some Part C (Medicare Advantage with Drug) or Part D (Stand Alone Prescription Drug) plans include an annual deductible where you pay the total cost of drugs until you reach the deductible amount.   Some plans set the deductible only for brand name drugs; check for your plan specifics. (Deductible payments are included in the amount counted toward the $4950 Maximum Out of Pocket level for 2017.)

Stage 2: Initial Coverage Up to $3,700 in Total Cost

In this stage you share cost with your Part C (Medicare Advantage with Drug) or Part D (Stand Alone Prescription Drug) plan, usually as fixed amount copays or percentage co-insurance.  The plan pays for the rest until the Total Drug Costs paid by the plan and you (including the Stage 1 Deductible) reach $3,700.

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In this example, the copay was $3.00 and the plan paid $374.31. Added together, the total $377.31 would count toward the $3,700.  After ten refills, the total $3,773.10 combined paid by the plan and member would exceed the $3,700 Stage 2 Initial Coverage.  The beneficiary member would then have exhausted the plan’s Initial Coverage and incur higher cost sharing in Stage 3, the Coverage Gap or “Donut Hole”

Stage 3: Coverage Gap or “Donut Hole” 

This is when my phone rings.  The conversation goes like this:

Client: “Dan, my prescription refill usually costs $X and today I was told the copay was double or triple that amount.”

Me: “Have you been receiving reports from the plan showing how the total cost of your prescriptions, what you and the plan paid together, has been creeping closer to that $3,700 threshold?”

Client:  “Yes.  But this is a shock.”

Yes, having exhausted the $3,700 in Stage 2 Initial Coverage, you now incur greater cost sharing.  In 2017, when you reach this stage you will be responsible for 40% of the cost of brand name drugs, 51% of generic drugs.  Then, once your year-to-date deductible, copay and coinsurance costs (Stages 1-3) reach $4,950 you then move to Stage 4.

Stage 4: Catastrophic Coverage after your out of pocket reaches $4,950

After the Stage 1, Stage 2 and Stage 3 combined Out of Pocket deductible, copay and coinsurance costs reach $4,950, you pay very little and your Part C (Medicare Advantage with Drug) or Part D (Stand Alone Prescription Drug) plan pays about 95% of the cost until the end of the year.   Then, on January 1, new plan begins again in Stage 1.

suggestions

Below are a few suggestions on how to delay the day by which you enter the “Donut Hole” Coverage Gap and stretch your copay dollars all year long.

  1. Preferred Pharmacy.  If you are in a Part C (Medicare Advantage with Drug) or Part D (Stand Alone Prescription Drug) make sure you fill your prescriptions at a preferred pharmacy where you can save on total costs compared with other drug-stores in your network.  Call your health plan for preferred stores near you.
  2. Generics.  According to AARP, the FDA will approve around 500 new generics next year.  Each will have the same active ingredient, quality, safety and strength as its branded original. Ask your doctor or pharmacist if the brand name drug you’re taking may have a generic option.
  3. Discounts.  Many larger retailers and supermarkets offer deep discount prices for popular generics.  Ask for copies of the chain’s discount list of generics to show to your doctor before he or she writes your prescriptions.  .
    • Example> Hannaford Price Chopper Walgreens
    • Check out GoodRx, a drug-price comparison web site.
    • (Also ask if the chain will fulfill the order independent of your Medicare Part D plan so the cost of the drug isn’t counted toward the $3,700 Initial Coverage.)
  4. Manufacturer.  If you need an expensive specialty drug and the Medicare plan doesn’t cover it, call the drugmaker. Many have customer assitance teams ready to assist families with household incomes up to $100,000.
  5. State Pharmacy Assistance Programs
  6. Social Security Extra Help offers subsidizes Prescription Drug Plan Costs to beneficiaries with limited income and limited resources.  [brochure]

helpNeed Help?  Please call me at (518) 346-2115 or send a quick note with your contact information and question.

 

Comparing Short Term Care to Long Term Care Insurance.

Long-term-care

What is Long Term Care? Almost 70% of people turning 65 will need long term care at some point in their lives. Long term care is when we need help with two or more daily activities such as bathing, dressing, eating or using the bathroom. (i)  Care can be provided in a nursing home, assisted care facility or at home.

Costs vary depending on whether the care is provided in our home, in an assisted living facility or nursing home.  (Here is a helpful link to look up the cost of care in your area.) You’ll see nursing home costs are about double that of home care.

Doesn’t Medicare Pay These Costs?  Don’t count on it. Part A covers skilled nursing care in a skilled nursing facility (not home care) under certain conditions for a limited time; and even then it’s usually related to a hospital stay and discharge.  (ii)  And, no, Medicare does not cover long term or custodial care. (iii)

So, How Would I Pay for This?

In the U.S., 10,000 people turn 65 daily. Most do not have the financial reserves or long term care insurance    protection against what could wipe out your lifetime of savings and accumulated assets.   Why not? Well,the three reasons why people defer obtaining a long term care policy are:

  1. The cost. Let’s face it, traditional long term care premiums can be pricey. Not as expensive as one year of care but beyond what many middle age household budgets can afford.  (Paying off mortgage, college education(s), retirement funds, etc.)
  2. Denial. “I am not part of the 70% that will need care.”  “My children will take care of me.” “I have good genes.”
  3. Complexity.   Underwriting for eligibility can involve extensive medical forms, physician statements, lab results and pharmacy screens to confirm eligibility.  (Download FREE Shopper’s Guide to Long Term Care Insurance target=”_blank” )

And So How Does Short Term Compare to Long Term Care Protection?

 Short Term Care

  • Benefits paid for up to one year
  • A 20 to 60 day waiting period
  • No Plan of Care Required
  • Simple Application
  • More Affordable
 Long Term Care

  • Benefits paid for up to ten years
  • A 90 to 365 waiting period
  • Yes, a Plan of Care Is Required
  • Extensive Application
  • More Expensive

Next Step

Call me at (518) 346-2115 and we can review the 10 Yes /No eligibility questions and create your customized premium quote.

Please visit and follow our Facebook Page. Daniel G. Alcorn, a licensed and independent agent, represents licensed insurance companies in Massachusetts and New York.  Dan may receive compensation for individual enrollments in Medicare Advantage, Medicare Supplemental Insurance , Medicare Prescription Drug or Long Term Care /Short Term Care plans.
Sources:

(i) http://longtermcare.gov/the-basics/what-is-long-term-care/

(ii) http://www.medicare.gov/coverage/skilled-nursing-facility-care.html

(iii) http://www.medicare.gov/what-medicare-covers/not-covered/item-and-services-not-covered-by-part-a-and-b.html