Medicare Supplement Insurance and Impending Changes
Medicare Supplement insurance has not changed since it was standardized in 1992. For the first time since that standardization, however, the plans will change June 1, 2010.
These changes will affect greatly anyone signing up for a plan after that date and will also likely affect anyone who has a Medicare Supplement plan currently.
In the past, Medicare Supplement plans (the “standardized” plans) ranged from Plan A to Plan J. Each plan had its own distinct set of benefits. This will not change – the plans will continue to be standardized; however, the “modernized” plans, as the new plans are called, will have a new benefits.
Additionally, some of the plans that were available in the past will no longer be available, and some new plans, never before available, have been added.
If you are turning 65 after June 2010 or if you are looking to replace your current plan, you need to be up to speed on the changes and how they have affected the standardized plans. The changes that have been made are as follows:
- First and foremost, several of the plans have been eliminated – these plans are E, H, I, and J. After 6/1/2010, you cannot sign up for any of these plans. Again, existing policyholders that have one of these plans will not be forced to drop their plans or terminated off of those plans. Most analysts agree that the elimination of those plans from the choices, however, will have a negative effect on future rate increases with those plans.
- Second, a hospice benefit has been added to the “Basic Benefits” component of all remaining plans. Regardless of which plan you purchase, this benefit will be included.
- Next, the “Part B Excess Charges” benefit has been increased to 100% on Plan G. This benefit was formerly 80% on Plan G. By bringing it up to 100%, it is equal to Plan F and other plans which cover this benefit.
- Also, “At Home Recovery” and “Preventive Care” have been eliminated completely from all plans which contained them. These benefits were deemed unnecessary, after careful study, due to lack of use.
- Possibly most importantly, two new plans, Medigap Plan M and Medigap Plan N have been added. These plans added some cost-sharing features to reduce plan premiums. Plan M will cover only 50% of the Part A deductible (which is $1,100/year for 2010). Also, it will not cover the Part B deductible (which is $155/year for 2010). Lastly, Plan M does not include any benefits for “Part B Excess Charges." Plan N, like Plan M, will not cover the Part B deductible; it does, however, cover the Part A deductible completely. Plan N uses cost-sharing (i.e. co-pays) to help keep premium costs down. The Plan N co-pays are $20 at the doctor’s office and $50 at the emergency room.