Medicare Supplements 201 Revisited for 2017

If you read our Medicare Supplements 101 Revisited article last week, you know that we are all about understanding supplements. This week it’s time to go deeper: Medicare Supplements 201 covers more about the unusual or specialized plans you might need. This article has also been revisited for 2017, so you’re getting the latest of fresh updates.

Part 1 of our series went over what the different Medicare Supplements cover and how they work with Original Medicare.

Medicare Supplements 201 coverage A-N chart

In Part 2 of our series we are going to discuss the different enrollment periods for Medicare supplements as well as some of the underwriting criteria major carriers use in pricing their plans. Remember, in order to enroll into a Medicare Supplement policy, beneficiaries must have Medicare Parts A and B.

Open enrollment for Medicare Supplements is the 6 months following a beneficiaries Part B effective date. No health questions asked. Full commission paid according to contracted rates.

Guaranteed issue. According to federal guidelines, carriers must issue a Medigap Plan A, B, C, F, K, or L that’s sold by any insurance company in the state under the following conditions;

  • During a Medicare Advantage members 12 month trial period
  • A beneficiaries’ current Medicare Advantage plan is leaving the area either due to financial reasons or is no longer going to offer that plan.
  • Beneficiaries’ employer group plan that pays after Medicare is ending. This includes retiree and COBRA coverage
  • Beneficiaries leave a Medigap or Medicare Advantage plan because the company hasn’t followed the rules

Underwritten policies can be issued at any time after the open enrollment period and beneficiaries are able to pass underwriting questions. Some policies have relaxed underwriting for a higher premium. Full commissions paid according to contracted rates.

Underwriting guidelines vary from carrier to carrier. Some carriers allow diabetics with no issues and other carriers will not issue policies at all for diabetics. Almost all Medicare Supplement carriers have a “prohibited prescriptions” list that tells you the application will be declined if a member takes the medication on the list for a specific condition. Some carriers include this list in every kit they send out.

Medicare Supplements for Beneficiaries under age 65. Not all states require Medigap plans to cover beneficiaries under age 65. In some cases states may only require carriers to offer certain plans for those under age 65 or cover certain conditions such as ESRD. In all cases, under 65 policies are more expensive than a regular Medigap policy since carriers know the beneficiaries will be using more benefits than those over 65 on original Medicare.

This is just brief overview of Medicare Supplements. For an in depth explanation and more, click the button below for the recording of Part 2 of our webinar series on Medicare Supplements: “Medicare Supplements 201.”

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 us at 1-800-997-3107 and let us help you with all of your Medicare Supplement contracting needs.

Updated 3/13/2017; Originally Published 5/16/2016

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.

Click here to subscribe to The Agent’s Advantange to get the latest news on Medicare reforms and changes to Medicare Part B. RB Insurance will never share, sell or rent your information.

Advise your client on hospital observation stays

Say your Medicare Advantage client goes to the local emergency room with a rapid heart beat and shortness of breath. After triage, the attending ER physician advises her to remain in the hospital for a while so he can make sure she’s stable. For two and a half days, your client is attended to by nurses, administered meds and served meals in her hospital bed. After this period of care the physician determines she is fine and ready for discharge.

Then comes the surprise: When the bill comes, she sees her status is “Under Observation.” The outpatient (Medicare Part B) hospital services benefit of her MA plan averages about a 20 percent patient responsibility versus an inpatient (Medicare Part A) status, which would only incur two days of the plan’s set daily copay. She may have not been expecting to pay the amount she has to because of her observation status.

Do your Medicare Advantage clients understand the “Under Observation” hospital status? Did you discuss the term during your appointment? If your client calls Medicare or the carrier’s customer service department stating she was “never advised of such a thing,” you may be risking a complaint being registered against you in the CMS Complaint Tracking Module (CTM).

Letting your client know about observation status in the event of hospitalization can help him or her avoid surprise and disappointment. Visit RBI’s Carriers page to discover Hospital Indemnity products, which can cover the cost of observation stays. Image courtesy of iStock

Another challenge can arise for your MA client regarding any medications she was administered during her observation stay. Under a full admission status, her drugs would usually be covered under her Part A hospital benefit; that’s not so if she is Under Observation. Medicare Part D may cover some of the costs, but it’s likely she will be responsible a majority of these outpatient medication charges.

Even your clients on a Medicare Supplement Plan F can run into problems with the observation status.

While Plan F will likely cover 100 percent of the Part B charges for observation status, other complications can arise if the patient is transferred to a skilled nursing facility. If the patient is under observation status, he or she will not meet the Medicare Fee-For-Service required three-day inpatient scenario that triggers a covered stay in a skilled nursing facility, potentially resulting in thousands of dollars in uncovered services.

Take care of your clients and avoid risking your reputation by advising your clients on hospital observation status. RB Insurance’s Hospital Indemnity carriers now cover observation stays in the same manner as fully admitted days — click on the Indemnity Products tab on our Carriers page to learn more about immediate contracting opportunities. And for a more detailed presentation regarding observation status, see this AARP article on the subject

RB Insurance-affiliated Agents can call (800) 997 3107 or email me to schedule a special training session that will help you avoid the pitfalls of observation status. Like my post? Simply subscribe to receive a few more, once a week in your Inbox.