Folks who are disabled and under age 65 are so grateful when they eventually qualify for Medicare. Unfortunately, many don’t realize that it’s important for them to investigate MediGap plans. Further, it’s very important that they think long and hard before denying Part B coverage, especially if they have no other medical coverage.
We had a case last week that drove this point home again. Recently diagnosed with advanced stage ovarian cancer and referred to a specialist in Sacramento, this woman was told the doctor did not want to treat her until she had supplemental coverage. Her primary care physician referred her to us.
She is covered by Medicare Part A due to a disability, but did not enroll in Part B when she first became eligible. She felt that the $105 monthly premium was too expensive. Unfortunately, she cannot buy a Medicare Supplement policy at this time because she does not have Medicare Part B.
She recently took advantage of the special enrollment period for late entrants, but her Part B coverage will not be effective until July. Likely she will also pay an increased premium to Medicare.
If she were to have surgery as an inpatient in the hospital, the hospital costs would be covered by Medicare Part A, but not all of the physician expenses. So now she must either be able to wait for the surgery until late summer or be able to negotiate with the physicians to pay the costs, hopefully at the Medicare allowed amount. She is not eligible for Covered CA or any individual coverage because she has Medicare.
Further when she enrolls in MediGap plan there will be a waiting period of 3 months for pre-existing conditions because she had a break in coverage.
While it is rare that people do not enroll in Medicare Part B when they are disabled, it is common that they do not enroll in a MediGap policy. If one does not enroll during the 6 month open enrollment period, they are not guaranteed a policy. The mere fact that one qualifies for Medicare under age 65, identifies that there are medical issues, so insurance companies aren’t anxious to “buy a claim”.
Fortunately California is one of 27 states that currently require insurers to provide plans to those under 65. But the guaranteed issue rules still apply. This means that the individual has to apply within six months of eligibility: three months before and three months after the effective date of Medicare.
Unlike health plans that are regulated by the ACA (Affordable Care Act, aka Obamacare) Medicare does not have a stop loss feature. This means there is no point at which Medicare will pay 100% of costs. That is why these policies are very important. They fill in the gaps and give Medicare beneficiaries some assurance that they can limit their out of pocket expenses.
It can be particularly confusing to deal with the alphabet soup of the Medicare program and the MediGaps plans.
Simply Medicare is distinguished by four parts: A, B, C & D.
Part A covers: Inpatient hospital, Skilled Nursing, Hospice and Home Health Care. In most cases there is no charge to the participant for this benefit.
Part B covers: Physician & Professional Services, Outpatient Care, Durable Medical Equipment and Preventive Service. The standard rate for this coverage is about $105 monthly. Higher income earners can pay more.
Part D is the Prescription Drug Benefit. The benefit levels are determined by the government but the plans are effectively outsourced to insurers. Premiums can range from $15-150 monthly in our area.
Part C is Medicare Advantage. Again, Medicare outsources the administration to insurers and benefits are required to be equivalent to Medicare. We do not market any of these plans in Shasta County as I am not satisfied that the provider lists are adequate.
MediGap plans are standard lettered plans A-N. The good news is that the benefits are the same, so comparison shopping is easier. Once enrolled an insured individual has an open enrollment period in their birthday month every year. This means they can make a lateral change without medical underwriting. But if one wants to increase benefits, they must satisfy the insurer’s underwriting standards and be free from chronic costly health problems.
Deadline reminders
February 14, 2015: Deadline to dis-enroll from any Medicare Advantage plan (with or without Part D drug coverage), switch back to Original Medicare and also enroll in a Part D plan to add prescription drug coverage.
February 15, 2015: Last day of open enrollment for individual policies on or off the Exchange. To enroll after this date you must have a qualifying event such as involuntary loss of other coverage or family life change event. As of deadline, nothing has come out re: extending that date.
Margaret Beck is a Redding-based licensed insurance broker who can be reached at 530- 225-8583. All information in her column is provided to the best of her knowledge, subject to final regulation by the respective agencies.
Beck’s column is also published in the Redding Record Searchlight.
