Medicare Supplements 101 Revisited for 2017

If you’re not an expert in Medicare Supplements, it’s time to get educated! Our Medicare Supplements 101 article and webinar is here to help! Newly updated for 2017, this article will help you get started now!

A Brief History

Medicare Supplement (Medigap) plans have been around almost as long as Medicare, and just like Medicare, have transformed over the years. It began as a variety of different coverages state by state, and was ultimately standardized by Medicare in 1992. The Omnibus Budget Reconciliation Act of 1990 replaced many voluntary guidelines with new Federal standards. Nearly all states adhere to these standards with a few exceptions. Massachusetts, Minnesota, and Wisconsin are three states complying with Federal guidelines without using the standardized A through N plans.

Medicare Parts A and B cover most medically-necessary inpatient and outpatient services. Unfortunately for consumers, Medicare does not cover all medical costs, leaving beneficiaries responsible for a portion of the costs. Let’s take a quick look at Medicare Part A and B, and then take a look at Medicare Supplements 101!

Medicare Part A

The two largest costs associated with Part A are the Hospital Deductible ($1316 in 2017) and days 21-100 ($164.50 co-pay per day) of the Skilled Nursing Benefit. There are also some costs associated with Hospice care which Medicare does not cover. Medicare DOES NOT cover the cost of room and board if someone is using a private hospice facility. While the Hospice benefit does cover the doctors and additional care needed, it does not cover the facilities charge of around $300 per day in a nursing home or skilled nursing facility. As you can imagine, the bills pile up quickly!

Medicare Part B

Part B has a yearly deductible ($183 in 2017) and 20% coinsurance for all Part B-covered services, including chemotherapy. There is no cap on how much a beneficiary is responsible for under traditional Medicare Parts A and B so chemotherapy treatments for example, could be financially crippling.

Medicare Supplements 101 to the Rescue!

 Medicare Supplements 101 coverage A-N chart

Depending on the plan, Medicare Supplement A through N policies cover all or a portion of the gaps in Medicare coverage. Because of the Federal standardization, the included benefits for each plan type is identical across all insurance carriers. The only difference is the premium. It is no coincidence that 57% of all Medicare Supplements have enrolled on Plan F policies- the benefits are generous and the added coverage provides financial protection.

  • National Guaranteed Issue rights only apply to Medigap Plans A, B, C, F, K, or L . Some states have their own Guarantee Issue periods. With Plans D, G, M and N, the beneficiary will likely be subject to medical underwriting.
  • Excess charges can occur when a doctor does not accept Medicare assignment. The beneficiary can be charged up to an additional 15% of the Medicare allowable rates.
  • Plans C, D, F, M and N all include a Foreign Travel benefit.  Beneficiaries pay a $250 deductible and their Medigap policy will pay 80% of the remaining charges, up to $50,000.
  • HD-F, K and L all have deductibles and maximum out of pocket expenses which are set by CMS every year.
  • Plans C and F cover the Part B deductible. For those of you familiar with the Medicare Access and CHIP Re-authorization of 2015 (MACRA for short), Medicare Supplement plans C and F will not be available for sale to new Medicare beneficiaries after Jan 1, 2020.
  • Plan N has a $20 co=pay at a doctors office and a $50 co-pay at the Emergency Room

Keep an eye out for more information on Medicare Supplements 201, Open Enrollment, Underwriting and Guaranteed issue situations.

This is a just brief overview of Medicare Supplements. For an in depth explanation and more, click the button below for the recording of Part 1 of our webinar series on Medicare Supplements.

Contact us today to get contracted with the highest rated carriers in your area. Many plans are only competitive in certain zip codes so don’t be fooled by all their hype. Call 1-800-997-3107 and let us help you with all of your Medicare Supplement contracting needs.

Updated 3/6/2017; Originally Published 5/16/2016

Educate your clients on hospital observation stays and the NOTICE Act

Congress finally updated the rules hospitals must follow when they keep Medicare beneficiaries for observation.

The NOTICE Act, which is short for “Notice of Observation Treatment and Implication for Care Eligibility,” requires hospitals to provide written notification to patients within 36 hours of beginning observation care that lasts more than 24 hours. Hospitals must explain that patients under observation status have not been admitted and why, and they must also notify patients of the potential financial implications. Hospitals have 12 months to comply with the NOTICE Act, so it may be a while before it’s fully implemented. 

Help your Medicare Advantage clients understand how their plan covers hospital observation stays. A new law requires hospitals to disclose whether a Medicare beneficiary has been admitted or is under observation status. Image courtesy of iStock.

Hospital, Medical, Insurance, Indemnity, Agent, Commission

According to a press release from the American Health Care Association, the House unanimously passed the bipartisan legislation on March 16, and the Senate unanimously passed it on June 24 without amendment. Policy wonks can read the full text of the reform here. President Obama signed the bill into law on August 6.

Prior to the reform, Medicare regulations allowed hospitals to observe patients for up to 72 hours without actually admitting them. Beneficiaries who thought they were admitted to the hospital subject to Medicare Part A billing would be shocked to find their entire stay under observation was actually billed subject to Medicare Part B deductibles and cost sharing.

As agents we have a responsibility to make sure our clients know how to use their benefits, especially as the incidence of claims that hospitals submit for observation care continues to skyrocket. According to a Kaiser Health News analysis using the most recently available data from CMS, total claims increased 91 percent between 2006 and 2013 to 1.9 million. Long observation stays, which last 48 hours or more, rose by 450 percent to 170,219 during the same period.

Most Medicare Advantage plans cover hospital observation stays as an outpatient surgery co-pay at an in-patient facility (also known as a hospital). Make sure you check with each individual plan you represent so you can inform your clients before unexpected observation status happens. If they call you in panic after being hopsitalized, you can reassure them of their coverage and how it works. It’s that kind of consideration that can get you friend and family member referrals.

Read more about advising clients on hospital observation status here.

Beneficiaries’ potential liability doesn’t end with hospital costs either. Medicare regulations require an individual be hospitalized for three midnights in order to qualify for Medicare Covered Skilled Nursing  facility (SNF) care. With the high rate of observation stays, more beneficiaries face astronomical costs in a SNF without help from Medicare. Most simply cannot afford the $200+ per day cost of a SNF out of their own pocket.

Fortunately for some, most Medicare Advantage plans waive Medicare’s outdated three-midnight rule. Certain members can go directly to a SNF after 1 day in the hospital. I had a Medicare Advantage client who fell, broke her hip and went from the ER to surgery to recovery to SNF without ever spending the night in the hospital.

As always, you can call RB Insurance at (800) 997 3107 or email me to learn more about the NOTICE Act and other changes in Medicare policy.

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