Medicare Supplement Insurance, Medicare Options & New Part D. ohio shopper s guide series

Transcription

1 ohio shopper s guide series Medicare Supplement Insurance, Medicare Options & New Part D This guide: Describes how & when to apply for Medicare Describes the new prescription drug benefit Explains options for health plans used with Medicare Includes sample premiums for supplements Shows selected Medicare Advantage offerings Lists company names and phone numbers Bob Taft Governor Ann Womer Benjamin Director

2 From Ohio Governor Bob Taft and Department of Insurance Director Ann Womer Benjamin: The Ohio Department of Insurance has produced this Ohio Shopper's Guide about Medicare and other related information to help people learn about the health care options available to a person on Medicare in Ohio. This guide provides both an overview and detailed insight into Medicare, which was created by the Federal government in 1965 to provide health insurance for seniors and those living with disabilities. Questions about Medicare, Medicare Advantage, Medicare Prescription Drug Coverage (Part D), and Medicare Supplemental (MedSup) insurance, when to enroll and what type of coverage is available are all addressed. Further, sample premiums are provided for MedSup plans, which help fill some Medicare coverage gaps, and Part D. Considerable time and effort went into researching the relevant information and designing this publication. We hope you find it useful. If you have any questions or need additional information, the Department's Ohio Senior Health Insurance Information Program (OSHIIP) is ready to help you. Most questions or issues can be addressed by one of OSHIIP's counselors or referred elsewhere for proper assistance. You can reach OSHIIP at , and the Department's web site at is also a helpful resource. Sincerely, Sincerely, Bob Taft Governor Ann Womer Benjamin Director, Ohio Department of Insurance

3 How This Guide Can Help You This guide is designed to help you understand your Medicare options. Choosing the right plan is an important decision. Experts at the Ohio Senior Health Insurance Information Program (OSHIIP) can be reached at to help answer your questions. OSHIIP is a free service of the Ohio Department of Insurance. Medicare Medicare is a fee-for-service health plan that lets you go to any doctor, hospital, or other health care provider who accepts Medicare. You must pay any applicable deductible. Medicare then pays its share of the Medicare-Approved Amount, and you pay your share (coinsurance). The Original Medicare Plan has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). Medicare Supplemental Insurance Medicare Supplemental Insurance, also called "MedSup" or "Medigap" policies, are plans designed to help you pay some of the medical costs that the Original Medicare Plan (fee-for-service) doesn't cover. A MedSup policy is a health insurance policy sold by private insurance companies (or insurers). There are twelve standardized plans labeled Plan A through Plan L. MedSup policies only work with the Original Medicare Plan. Medicare Advantage Medicare Advantage is a program that offers beneficiaries additional health care options. Medicare Advantage plans are offered by private companies in contract with the Medicare program. Medicare Advantage plans must offer the benefits offered by Original Medicare, but may also offer additional benefits. Everyone who has Medicare Parts A and B is eligible, except those who have End-Stage Renal Disease. Medicare Part D The new Medicare Prescription Drug Coverage benefit - called Part D - helps people on Medicare pay prescription costs and and is offered by numerous private companies and Medicare Advantage plans. People with Medicare will decide whether or not to enroll in Part D. Anyone who is entitled to Medicare Part A and/or enrolled in Medicare Part B is able to enroll in a Part D plan. Editor s Note: Words in green are defined in the glossary on pages Frequently, the Ohio Department of Insurance relies on other sources for the information distributed by its employees, volunteers or representatives. The information is believed to be accurate but it may change without notice. The Department makes no guarantee concerning its accuracy or validity. The Department disclaims any responsibility for the use of, or reliance on, the information. 1

4 Chapter 1: A Quick Look at Medicare p. 3 How and When to Enroll in Medicare Your Rights as a Medicare Enrollee Medicare Part A Medicare Part B Ways to Fill Medicare s Gaps Chapter 2: Prescription Drug Plans Part D p. 8 Eligibility and Enrollment Formularies Financial Help Premium and Plan Information Chapter 3: Medicare Supplement Insurance Policy Basics p. 15 What is a Medicare Supplemental Insurance Policy? Open Enrollment Can I Keep My Same Doctor if I Buy a MedSup Policy? TABLE OF CONTENTS Chapter 4: More Detailed Medicare Supplement Chapter 4: Policy Information p. 23 MedSup Plans A-L Standardized Since 1992 Plan A: Bargain Basic MedSup Shopping List Standard MedSup Plans Chart A-L New in 2006 Plans K and L Guaranteed Issue Opportunities Chapter 5: Coverage Charts p. 33 Covered Services and Premium Information for Medicare Part A and Part B Monthly Medicare Supplement Insurance Premiums Medicare Select Company Listings Medicare Advantage Plans by County Chapter 6: Medicare Advantage p. 51 Types of Medicare Advantage Plans Joining a Medicare Advantage Plan Open Enrollment Chapter 7: Glossary of Terms p. 59 Chapter 8: Resources p. 61 OSHIIP Counseling Directory Rating Firm Information Ohio Medicare Partners 2

5 Chapter 1: A Quick Look at Medicare How and When To Enroll in Medicare Before your 65th birthday, you must decide whether or not to enroll in Medicare. If you are already getting Social Security or Railroad Retirement, Medicare will enroll you automatically. Your Medicare enrollment period begins three months before the month you turn 65. Your Medicare enrollment period continues through your birthday month. Your Medicare enrollment period ends three months after your birthday month. MEDICARE ENROLLMENT EXAMPLE If your 65th birthday is 4/10/2006, and you apply for Medicare in... January, February or March Medicare starts April 1 April May June July Medicare starts May 1 July 1 Sept. 1 Oct. 1 But, if you miss your enrollment period and apply... after July You can t enroll until next January; your coverage starts the following July You ll pay a 10% penalty each year you wait. Medicare Enrollment It is better to apply before your birth month! If you apply before your birth month, your Medicare coverage begins on the first day of your birth month. If you apply during your birthday month or the next three months, coverage may be delayed for up to 6 months. To apply for Medicare, call your local Social Security office, or call the Social Security Administration at The cost of the Medicare Part B monthly premium will go up 10% for each 12-month period that you were eligible for Medicare Part B but didn't sign up for it, unless you or your spouse are currently employed and covered by that employer s group health plan. This exception qualifies you to enroll during a Special Enrollment Period without penalty. 3

6 If you didn't sign up for Medicare Part B when you were first eligible, you may sign up during two enrollment periods: 1. The General Enrollment Period For Medicare Part B This period runs from January 1 through March 31 of each year. During this time, you can sign up for Medicare Part B at your local Social Security office. If you get benefits from the Railroad Retirement Board (RRB), call your local RRB office or If you enroll during the general enrollment period, your Medicare Part B coverage will start on July 1 of the year you sign up. 2. The Special Enrollment Period For Medicare Part B This period is available if you waited to enroll in Medicare Part B because you or your spouse were working and had group health coverage through an employer or union based on current employment. Most people who sign up for Medicare Part B during a Special Enrollment Period don't pay higher premiums. Medicare Enrollment If this exemption applies to you, you can sign up for Medicare Part B: Any time you are still covered by an employer or union group health plan, through your or your spouse's current or active employment, or During the eight months following the month that the employer or union group health plan coverage ends, or when the employment ends (whichever is first). Note: When you sign up for Medicare Part B, you automatically begin your MedSup open enrollment period. Once your MedSup open enrollment period begins, it cannot be changed or restarted. See pages to learn more about your MedSup open enrollment period. 4

7 If you are disabled and working (or you have coverage from a working family member), the Medicare Part B Special Enrollment Period rules may also apply. IMPORTANT: If you are eligible but don't sign up for Medicare Part B during the Special Enrollment Period, you will only be able to sign up during the General Enrollment Period, and the cost of Medicare Part B may go up. For more information about signing up for Medicare Part A and Part B, call the Social Security Administration at TTY users should call If you get benefits from the Railroad Retirement Board, call your local RRB office or Note: If you have End-Stage Renal Disease (ESRD), different rules for enrollment may apply. Medicare Your Rights as a Medicare Enrollee Enrollment Whether you are enrolled with Original Medicare or another Medicare option, you are entitled to certain rights and protections: Protection from discrimination in marketing and enrollment practices; Information regarding what is covered and what your costs will be; Information about what treatment options are available to you; Appeal decisions denying or limiting payments for care; Know how doctors are paid by your health plan; Choose a women s health specialist; Receive a treatment that includes direct access to a specialist for serious or complex conditions; Receive emergency care; Be admitted to the hospital; and Remain in the hospital. 5

8 Medicare Part A How Medicare Works Medicare is a health insurance program, administered by the Centers for Medicare and Medicaid Services (CMS), for individuals who are 65 or older, disabled or who suffer from End-Stage Renal Disease (ESRD). Medicare has two parts: Part A Hospital Insurance. Most people don't have to pay for Part A. Part B Medical Insurance. Most people pay a monthly premium for Part B. Medicare Part A Medicare Part A (Hospital Insurance) helps pay for the following: Inpatient hospital care, Skilled nursing facility care, Hospice care, and Some home health care. You will not pay a monthly payment (called a premium) for Medicare Part A if you or your spouse paid enough Medicare taxes while working 40 quarters. You will have premium-free Medicare Part A. Even if you (or your spouse) didn t pay Medicare taxes while you worked and you are age 65, you may be able to buy Medicare Part A. For persons working quarters the Part A premium is $ per month (in 2006). For persons working less than 30 quarters the Part A premium is $ per month (in 2006). NOTE: Non-U.S. citizens can purchase Part A after they have lived in the U.S. for at least five consecutive years. Although Medicare Part A is premium-free for most, there are out-of-pocket costs for services. These costs include: $ hospital deductible per benefit period $ daily copay for hospital days per benefit period $ daily copay for hospital days per benefit period $ daily copay for inpatient skilled nursing days per benefit period Part A inpatient services are paid based on a benefit period. A benefit period begins when a Medicare patient is admitted to the hospital. A benefit period ends when the Medicare patient is home from inpatient care for more than 60 consecutive days. Medicare Part B Medicare Part B (Medical Insurance) helps pay for the following: Doctors' services, Outpatient hospital care, Some other medical services that Medicare Part A doesn't cover (like some home health care including durable medical equipment), and Preventive Care Medicare Part B helps pay for medically necessary services and supplies. If you choose to enroll in Medicare Part B, you pay the Medicare Part B premium of $88.50 per month (in 2006). Medicare Part B also has an annual deductible of $ (in 2006). After meeting the deductible, Part B generally pays 80% of medically necessary services. 6

9 Ways to Fill Medicare s Gaps Retirement Plans Although there isn t a legal requirement to offer employees retirement benefits, some employers and unions offer health insurance plans to their retirees. There are numerous variations of health insurance coverage and benefit structures vary greatly. The plan s benefit booklet or policy will explain what benefits are included and if the plan coordinates with Medicare. Retirement plans may serve as additional insurance to help pay the gaps in Medicare coverage, such as deductibles and co-payments. However, these plans do not have to follow the state or federal rules that apply to individual Medicare supplement insurance policies. Sometimes retirement plans will deduct Medicare payments for claims before it will calculate what it will pay. Check with your former company s benefit specialist or your union representative to determine what your coverage includes and how your plan may or may not work with Medicare. Medicaid Ohio s Medicaid program is funded by both the federal and state governments and provides care for many low-income citizens. Special provisions exist for people who are age 65 or older, have disabilities or are blind. People with Medicare and Medicaid generally do not have to pay Medicare s deductibles or co-payments. If a doctor accepts a Medicaid card, Medicaid pays the entire bill. However, not all doctors accept Medicaid patients. It is important to check that a doctor will accept Medicaid s payment before receiving medical care. Ways to Fill Medicare s Gaps Medicare Supplement Insurance Most people with original Medicare (not a Medicare Advantage plan) have secondary insurance called Medicare Supplement insurance. Medicare Supplement insurance is also called Medigap or Med Sup insurance. These are individual insurance plans that are specifically designed to pay for most of Medicare s deductibles and co-payments. There are many insurance companies licensed and approved to sell Medicare Supplement insurance in Ohio. The Ohio Department of Insurance contacted each of these companies to provide information to include in this publication. Most companies responded and we have included their plan and premium information in Chapter 5. 7

10 Chapter 2: Prescription Drug Plans Part D The Medicare Modernization Act (MMA) was signed into law December 8, This law made the biggest changes to Medicare in its 40-year history. The MMA expands Medicare s preventive benefits and changes the formula for calculating the Part B deductible. An important part of the law is the new Medicare Prescription Drug Coverage benefit - called Part D - which helps people on Medicare pay prescription costs. Medicare s Prescription Drug Plans - Part D This new coverage began on January 1, 2006 and is offered by numerous private companies and Medicare Advantage plans. A prescription drug plan (PDP) must meet certain federal requirements before it is approved by Medicare as a Part D plan. The Centers for Medicare & Medicaid Services (CMS) is the federal agency that administers the Medicare program, including Part D. Eligibility and Enrollment All people with Medicare are eligible. People with Medicare will decide whether or not to enroll in Part D. People who also have Medicaid are auto enrolled. Anyone who is entitled to Medicare Part A and/or enrolled in Medicare Part B is able to enroll in a Part D plan. It does not matter how much income or resources a person has to receive prescription drug coverage. Enrollment in a Part D plan is voluntary for most people. For people already on Medicare, the open enrollment period started last November 15th and ends May 15, Those who enrolled before December 31, 2005 had coverage in place as of January 1, Those who enroll by May 15, 2006 will have coverage beginning the first day of the month after enrolling. Those new to Medicare will have an initial enrollment period of seven months, which matches the enrollment period for Part B. The sevenmonth enrollment period includes the three months prior to a person s birth month, his/her birth month and the three months after a person s birth month. People who miss their initial enrollment period can choose a plan during Medicare s Annual Election Period (November 15 December 31). Their Part D coverage will begin on January 1st of the next calendar year. 8

11 Enrollment Methods People with Medicare, or someone on their behalf, can enroll in a Part D plan in several ways: Mailing an enrollment form to the PDP Contacting the plan by phone or fax Calling MEDICARE or OSHIIP at Enrolling online using Medicare s web site at Penalty Those who choose not to join Part D during the initial enrollment period (11/15/05 5/15/06) and enroll at a later time may face a penalty of 1% in premium cost for each month of delay. This permanent penalty is similar to the penalty for late enrollment in Part B. Creditable Coverage People with other sources of drug coverage (such as retiree coverage) which are as least as good as Medicare s benefit can keep their current coverage without paying a penalty if they choose to enroll at a later time. Annual Election and Special Enrollment Periods People already on Medicare could enroll between Nov. 15, 2005 and May 15, 2006, without a penalty. Generally, those enrolling during this time period could change plans only once between January 1, 2006 and May 15, They may choose another plan from November 15 to December 31 for the following calendar year. Part D - Continued However, the events listed below would trigger a special enrollment period that would enable the person to change plans within the same year: The person permanently moves to a region that doesn t offer the same PDP The person joins or leaves a Medicare Advantage plan The person enters or leaves a long-term care facility The PDP plan sponsor stops offering the plan A person s former employer or union discontinues its drug benefit Those who live in Ohio for only part of the year, may choose only one plan. Therefore, it is very important that they make sure the PDP is available in both areas. 9

12 Plan Overview There are two ways to get Part D coverage, buying a stand-alone plan offered by private companies or by enrolling in a Medicare Advantage plan. Plan sponsors must be approved by Medicare and apply for federal contracts each year. The number of plans offered in any particular area can change from year to year. Numerous plans are available in Ohio and a listing, current when this booklet went to print, appears on pages Formularies A formulary is a list of drugs that the plan agrees to help pay for. In order to be covered by Medicare, a drug must be available only by prescription, be approved by the Federal Drug Administration (FDA), used and sold in the USA and used for a medically necessary reason. Part D covered drugs include prescription drugs, biological products and insulin. Medical supplies associated with the injection of insulin are also covered. Medicare s Prescription Drug Coverage Part D plans must cover both generic and brand name drugs. However, any one particular formulary does not have to cover all drugs. That s why comparison shopping is so important. The Center for Medicare & Medicaid Services (CMS) reviews all plan formularies to ensure that they cover all or substantially all medications in these six categories: Cancer medications HIV/AIDS treatments Antidepressants Antipsychotic medications Anticonvulsive treatment for epilepsy and other conditions Immunosuppressants Some drugs are not required to be covered by Part D plans. Plans, however, can choose to cover them at their own cost or share the cost with enrollees. These include drugs for: Anorexia, weight loss/weight gain Fertility Cosmetic or lifestyle purposes Symptomatic relief of coughs and colds Prescription vitamin and mineral products (except prenatal vitamins & fluoride preparations) Nonprescription drugs Barbiturates Benzodiazepines 10

13 Medicare prescription drug plans may also impose other restrictions on some prescriptions, such as quantity limitations, prior authorization and step therapy. Drugs covered under Part A or Part B will continue to be covered as before. Pharmacy Networks All Part D plans have pharmacy networks, or pharmacies that have agreed to accept the plans payment. Every pharmacy will not accept every plan. However, most pharmacies accept several plans. It is important to check with your pharmacy to determine which plans it will accept. If you travel out-of-state, remember to check that the plan you select can be used at the other location. Convenience Many plans offer a mail order option. Generally, mail order options provide a 90-day supply of medications and can offer a reduced co-pay. Medicare s Financial Help Those with limited incomes and resources can qualify for help in paying the out-of-pocket costs associated with Part D plans. Those with the least income and resources will get the most help. Many who qualify for this help will not have to pay a monthly premium or annual deductible. Also, the amount they will pay cannot be more than $5 per prescription, and in some cases will be much less. Prescription Drug Coverage Those with slightly higher income and resource levels will be responsible for a lowered monthly premium, deductible and only 15% of their drug costs. There will be no gap in coverage for those receiving the extra help. 11

14 Income & Resources Income guidelines for 2006 are: $14,700 a year ($1,225 monthly) if single $19,800 ($1,650 monthly) if married Income includes all money received through wages, retirement benefits including Social Security, Railroad Retirement, the federal government and any other sources usually reported for tax purpose. Income limits may be higher if a person supports other family members. Resource limits for 2006 are: $11,500 if single $23,000 if married Medicare s Prescription Drug Coverage When counting resources, the federal government does not include a person s house, vehicles or any prearranged burial services. All other resources are counted, including savings, investments, etc. Need more Information? The Social Security Administration (SSA) administers the extra help program. If you think you may qualify for extra help, call SSA at , or contact your local Social Security office for an application or apply online at Please call the Ohio Senior Health Insurance Information program (OSHIIP) at for a drug comparison report and/or a list of Medicare prescription drug plans. 12

15 Ohio Premium and Plan Information 13

16 Ohio Premium and Plan Information continued Please contact the Department s Ohio Senior Health Insurance Information Program (OSHIIP) at for the most recent Part D information and enrollment assistance. 14

17 Chapter 3: Medicare Supplement Insurance Policy Basics What Is A Medicare Supplemental Insurance Policy? A Medicare Supplemental Insurance policy, also called a MedSup or Medigap policy, is a health insurance policy sold by private insurance companies to help pay health costs that the Original Medicare Plan doesn t cover. Before 1992, every insurance company designed its own MedSup benefit plans. Consumers were faced with many plans offering different coverages, with no easy way to compare the plans and determine the best plan for their needs. To eliminate confusion, there are now twelve standardized MedSup plans called "A" through "L." The plans are standardized to offer the same benefits regardless of what company offers them. The only differences between companies are cost and customer service. Plan A covers only the basic (core) benefits (listed on page 26). These basic benefits are included in all the plans, A through J. Plan J offers the most benefits. When you buy a MedSup policy, you will pay a premium to the insurance company. This premium is in addition to the Medicare Part B premium you must also pay. As long as you pay your premium, your MedSup policy is guaranteed renewable, which means it is automatically renewed each year. What Is A Medicare Supplemental Insurance Policy? If you buy a MedSup policy, it only covers your health care costs. It doesn't cover any health care costs for your spouse. IMPORTANT: MedSup policies only help pay health care costs if you have the Original Medicare Plan. You don't need to buy a MedSup policy if you are in a Medicare Advantage plan. It is illegal for anyone to sell you a MedSup policy if they know you are in one of these plans. It is also illegal for an insurance company to sell you a MedSup policy if you have Medicaid except in certain situations. 15

18 Why Might I Want To Buy A MedSup Policy? You may want to buy a MedSup policy because the Original Medicare Plan doesn't pay all of your health care expenses. The chart below gives some examples of these gaps. Hospital Stays $952 for the first 60 days $238 per day for days $476 per day for days Skilled Nursing Up to $119 per day for days Facility Stays Why Might I Want To Buy A Blood Medicare Part B yearly Deductible Medicare Part B covered services Cost of the first 3 pints $124 per year 20% of Medicare-approved amount for most covered services 50% of the Medicare-approved amount for outpatient mental health treatment* Co-payment for outpatient hospital services MedSup Policy? If you are in the Original Medicare Plan, a MedSup policy may help you: Lower your out-of-pocket costs (deductibles and co-payments), and Provide more health insurance coverage. What you pay out-of-pocket in the Original Medicare Plan will depend on the following: How often you need health care, What type of health care you need, Whether you buy a MedSup policy, Which MedSup policy you buy, and Whether you have other health insurance. Before you buy a MedSup policy, find out if you are a Qualified Medicare Beneficiary (QMB). People on Medicare are eligible for QMB if they meet certain limits for income and assets. Generally, individuals or families at or below 100% of the federal poverty level do not need a MedSup policy because Medicaid will pay the Medicare Part A and Medicare Part B deductible, all Medicare co-payments and the Medicare Part B premium. See page

19 When Is The Best Time To Buy A MedSup Policy? The best time to buy a MedSup policy is during your MedSup open enrollment period. Your MedSup open enrollment period lasts for six months. It starts on the first day of the month in which you are both Age 65 or older, and Enrolled in Medicare Part B. Once the six-month MedSup open enrollment period starts, it can't be changed. During an open enrollment period, an insurance company can't Deny you insurance coverage because of your health, Place conditions on a policy (like making you wait for coverage to start), or Charge you more for a policy because of past or present health problems. If you buy a MedSup policy during your MedSup open enrollment period, the insurance company must shorten the waiting period for pre-existing conditions by the amount of previous health coverage you have. This is called creditable coverage. See page 18 for more information about pre-existing conditions. If you want to know more about creditable coverage, see pages If you are disabled or have End-stage renal disease (ESRD), see pages When Is The Best Time To Buy A MedSup Policy? What If I Missed My MedSup Open Enrollment Period? If you apply for a MedSup policy after your open enrollment period has ended, the MedSup insurance company is allowed to use medical underwriting to decide whether to accept your application. If you are in good health, the insurance company is likely to accept your application, but there is no guarantee that you will get the policy. Should I Enroll In Medicare Part B And Start My MedSup Open Enrollment Period If I Am Age 65 Or Older And Still Working? You may want to wait to enroll in Medicare Part B if you or your spouse are working and have group health coverage through an employer or union. Your MedSup open enrollment period won't start until you sign up for Medicare Part B. (Remember, once you are age 65 or older and enrolled in Medicare Part B, the MedSup open enrollment period starts and can't be changed.) 17

20 Will My Pre-existing Condition Be Covered If I Buy A MedSup Policy? A pre-existing condition is a health problem you had prior to the starting date of a new policy. An insurance company can refuse MedSup coverage for those health problems for up to six months. This delay is called a "pre-existing condition waiting period." The insurance company can only use this kind of waiting period if your health problem was diagnosed or treated during the six months before the policy started. Open enrollment period Will My Pre-existing Condition Be Covered If I Buy A MedSup Policy? If you buy a policy during your MedSup open enrollment period, and you had at least six months of previous health coverage that qualifies as "creditable coverage" (see below), the company cannot give you any pre-existing condition waiting period. If you had less than six months of creditable coverage, this waiting period will be reduced by the number of months of creditable coverage you had. Special MedSup Protections (Guaranteed issue rights) If you buy a MedSup policy when you have special MedSup protections or guaranteed issue rights, the insurance company can't use a pre-existing condition waiting period. To find out if you will have a pre-existing condition waiting period if you switch MedSup policies, see the next page. What Is MedSup Creditable Coverage? Creditable coverage is any previous health coverage you have that can reduce the time you have to wait before your pre-existing health conditions will be covered by a new policy. Note: Whether you can use creditable coverage depends on whether you had any "breaks in coverage." If at any time you had no health coverage of any kind for more than 63 days in a row, you can only count creditable coverage that you had after that break in coverage. 18

21 Example: Creditable Coverage Mr. Smith is 65 and has heart disease. His Medicare Part A and Part B started November 1, Before this date, he had no health insurance coverage. On March 1, 2006, Mr. Smith buys a MedSup policy. His MedSup insurance company refuses to cover his heart disease condition for six months (the pre-existing condition waiting period). However, since Mr. Smith had Medicare Part A and Part B from November 1 to March 1, the insurance company must use his four months of Medicare coverage as creditable coverage to shorten this six-month waiting period. Now his waiting period will only be two months instead of six months. During these two months, after Medicare pays its share, Mr. Smith will have to pay the rest of the costs for the care of his heart disease. He will also have to pay his MedSup premiums. If I Have Medicare But Am Under 65, Can I Buy a MedSup Policy? You may have Medicare before age 65 due to the following: A disability, or ESRD (permanent kidney failure requiring dialysis or a kidney transplant). If you are under age 65 and disabled or have ESRD, you may not be able to buy the MedSup policy you want until you turn 65. Federal law doesn't require insurance companies to sell MedSup policies to people under age 65, although currently two Ohio companies offer MedSup insurance to residents who fall under this category. If I Have Medicare But Am Under 65, Can I Buy a MedSup Policy? During the first six months after you turn age 65 and are enrolled in Medicare Part B, you will enter your MedSup open enrollment period. It doesn't matter that you have had Medicare Part B before you turned age 65. During this time: You can buy any MedSup policy (including those policies that help pay the cost of prescription drugs), and Insurance companies cannot refuse to sell you a MedSup policy due to a disability or other health problem, or charge you a higher premium than they charge other people who are 65 years old. 19

22 What Happens When I Turn 65? When you buy a policy during your MedSup open enrollment period, the insurance company must shorten the waiting period for pre-existing conditions by the amount of creditable coverage you have. If you had Medicare for more than six months before you turned 65 years old, you won't have a pre-existing condition waiting period because Medicare counts as creditable coverage. (See pages for more information about creditable coverage.) Choosing the right health coverage is an important - but sometimes difficult - decision. Let the experts at OSHIIP help answer your Medicare questions. Call (800) for assistance. Prescription Drug Coverage Starting in 2006, Medicare offers a prescription drug benefit. All people with Medicare will be able to enroll in plans that cover outpatient prescription drugs. For more information on Medicare s Part D benefit see page 8. After January 1, 2006, MedSup Plans H, I & J will no longer be sold with a drug benefit. A MedSup policy is not: Coverage you get from your employer or union, A Medicare Advantage plan, Medicare Part B, or Medicaid. MedSup Policies Do Not Cover The Following: Long-term care, Vision or dental care, Hearing aids, Private-duty nursing, or Outpatient prescription drugs. 20

23 Who Can Buy A MedSup Policy? To buy a MedSup policy, you must be enrolled in Medicare Part A and Part B. If you are under age 65 and you are disabled or have End-Stage Renal Disease (ESRD), you may not be able to buy a MedSup policy until you turn 65. More information about MedSup policies for people under age 65 starts on page 19. Can I Keep Seeing The Same Doctor If I Buy A MedSup Policy? In most cases, yes. If you are in the Original Medicare Plan and you have a MedSup policy, you can go to any doctor, hospital, or other health care provider who accepts Medicare. However, if you have the type of MedSup policy called Medicare Select, you must use specific hospitals and, in some cases, specific doctors to get your full insurance benefits. How Much Do MedSup Policies Cost? The amount you pay for a MedSup policy depends on certain factors. The cost can vary; By your age, By where you live By insurance company, and By the plan you choose Insurance companies have three different ways of pricing policies: age of issue, attained age, and community pricing. How Much do MedSup Policies Cost? The price of premiums that different insurance companies charge for exactly the same coverage can vary widely. When you compare premiums, be careful you are comparing the same MedSup policies. 21

24 Other Factors That May Affect Your Cost Whether you are male or female (Some companies offer discounts for females) If you smoke or use tobacco products (Some companies offer discounts for non-smokers) Whether you are married (Some companies offer discounts for married couples) Whether the insurance company uses medical underwriting. This is a process that an insurance company uses to review your health and medical history and decide whether to accept your application for insurance, how much to charge you and whether to make you wait for some benefits Insurance companies may "medically underwrite" any MedSup policy unless you are in your MedSup open enrollment period (see page 17) or you have special rights to buy a MedSup policy (see page 18) How Much Do MedSup Policies Cost? Whether you buy a High Deductible Option Policy, insurance companies may offer a "high deductible option" on MedSup Plans F and J (see chart on page 24). High deductible option policies often cost less, but if you get sick, your out-of-pocket costs will be higher If you have a Medicare Select policy and you don't use a Medicare Select hospital or doctor for non-emergency services, you will have to pay some or all of what Medicare doesn't pay. Medicare will pay its share of approved charges no matter what hospital or doctor you choose. 22

25 Chapter 4: More Detailed Medicare Supplement Policy Information MedSup Plans: Standard Since 1992 The Standard Plans Companies once designed their own benefit plans. The dozens of plans were similar, but not identical. Since 1992, companies must sell identical benefits under policies now using letters A through L. A company may add a brand name to its policies, but Plan C from one company has the same benefits as Plan C from another. Plans A through L The chart on page 26 shows the benefits that must be included in these plans. In 1999, Medicare added new versions of Plan F and Plan J. These variations each carry a $1,790 deductible (in 2006) but other than that, they work just like the original Plans F and J. If you bought a Medicare Supplement policy before 1992 Standardization does not affect a policy you already have. You do not have to trade it for a standard policy. In fact, your old plan could actually be better than any of the standards! MedSup Overview Every company that sells MedSup must offer Plan A. All of the other standard plans must include Plan A s basic benefits, listed below. Plan A: Bargain Basic Plan A is very basic. It has the fewest benefits and lowest prices. While it does not patch all the holes, Plan A fills some of the biggest gaps in coverage by Medicare. Hospitalization (Medicare Part A) After you pay the $952 (2006) deductible, Plan A combines with Medicare to cover all Medicare-approved hospital charges. Plan A will also cover hospitalization for 365 days after all Medicare benefits are exhausted. Medical Bills (Medicare Part B) After you pay the $124 annual deductible, you re covered for 100% of Medicare-approved medical expenses (Medicare pays 80%, Plan A pays 20%). Because of the balance billing ban, that s your full bill if you are treated by an Ohio practitioner. 23

26 Excess charges (or balance billing) are BANNED IN OHIO. Ohio law prohibits medical practitioners and their employees from charging mre than medicare approves. MedSup Plans F,G,I and J include coverage for excess charges. Unless you spend a lot of time in another state that allows excess charges, this coverage is not useful to you. Excess charges coverage often increases your annual premium for a MedSup policy. Look at the chart on page 26. Take away excess charges coverage and note that Plan F is just like Plan C and Plan G is just like Plan D. Pay only for what you need. If you feel you have been overbilled by a health care practitioner, contact the Ohio Department of Health at Blood Plan A combines with Medicare to cover all blood expenses (except the Part B deductible of $124 both in and out of the hospital. MedSup Overview Plan A or Part A? Don t confuse MedSup Plan A and Medicare Part A. Although the names are similar... Plan A is a MedSup policy Part A is the name for Medicare s hospitalization coverage Plan A fills most holes in Part A 24

27 MedSup Shopping List Adding Benefits to Plan A s Basics The basic beenfits are identical in each of the standard MedSup policies. So when shopping, you can focus on the extra benefits that help fill the rest of the gaps in Medicare coverage, such as... Deductibles Copayments Medical expenses that Medicare does not cover MedSup Plans B through J have different combinations of the extra benefits below: Part A deductible ($952 per benefit period in 2006): Plans B - J Part B deductible ($124 per calendar year in 2006): Plans C, F & J Skilled Nusing Care: starts paying after Medicare has paid for your first 20 days in a skilled nursing facility. MedSup pays your coinsurance for the next 80 days ($119 per day in 2006). It pays for those 80 days only: Plans C through J Excess Charges under Part B: pays either 80% or 100% of the amount a doctor can legally add to a Medicare approved charge. Plans F, G, I, & J At-home recovery: pays up to $1,600 per year to help with activities of daily living (known as ADLs) while you recover at home from an illness. You must qualify for Medicare home health care to collect on this benefit. Plans D, G, I and J Preventive Care: annual limit of $120 for physical exam, cancer screening, etc. Plans E and J Foreign Travel Emergency: emergency care when traveling outside the U.S. Deductible is $250; pays 80% up to $50,000 lifetime limit. Plans C through J MedSup Shopping List Prior to 2006, Plans H, I and J were sold with a prescription drug benefit. The drug benefit in these plans was determined to be noncreditable. Since January 1, 2006, H, I and J policies are sold without a drug benefit. Refer to the Chart of Standard MedSup Plans The chart, which shows benefits for each of the MedSup standard plans, is on page 26 of this guide. The company s sales material must include the chart. Pick the plan that best meets your needs Shop for price and service 25

28 The Standard MedSup plans - A through L Plan A Plan B Plan C Plan D Plan E Plan F* Plan G Plan H Plan I Plan J* Plan K ^ Plan L ^^ Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Basic Benefits Skilled Nursing Copay Skilled Nursing Copay Skilled Nursing Copay Skilled Nursing Copay Skilled Nursing Copay Skilled Nursing Copay Skilled Nursing Copay Skilled Nursing Copay Skilled Nursing Copay 50% Skilled Nursing Copay 75% Part A deductible Part A deductible Part A deductible Part A deductible Part A deductible Part A deductible Part A deductible Part A deductible Part A deductible Part A deductible 50% Part A deductible 75% Part B deductible Part B deductible Part B deductible Part B excess 100% Part B excess 80% Part B excess 100% Part B excess 80% Foreign travel emergency Foreign travel emergency Foreign travel emergency Foreign travel emergency Foreign travel emergency Foreign travel emergency Foreign travel emergency Foreign travel emergency At home recovery At home recovery At home recovery At home recovery Preventive Care Preventive Care Only the plans shown here can be sold *Separate versions of Plan F & Plan J are available with a $1,790 deuctibles (2006). ^Plan K has an out-of-pocket limit of $2,000 (2006) for Medicare-covered services. ^^Plan L has an out-of-pocket limit of $4,000 (2006) Every company must have a chart like this in its sales material for Medicare-covered services. Every company must offer Plan A The basic benefits listed below must be part of every plan Hospitalization: Part A coinsurance plus coverage for 365 additional days after Medicare benefits end Medical expenses: Part B coinsurance plus coverage for 365 additional days after Medicare benefits end Medical expenses: Part B coinsurance (20% of Medicare-approved expenses) Blood: first 3 pints of blood each year 26

29 New in 2006 Plans K and L The Medicare Modernization Act of 2003 created two new standardized Medicare Supplement plans known as K and L. Plans K and L are much different from the other ten standardized Medicare Supplement plans. Generally, premiums for Plans K and L are much lower than other Medicare Supplement plans due to the higher out-of-pocket costs for the policyholder. Plan K Highlights of the standardized benefit structure of plan K include: 50% coverage of the Part A deductible ($952 in 2006) 100% of the Part A coinsurance amount for days ($238 per day in 2006) 100% of the Part A coinsurance amount for days ($476 per day in 2006) 100% of Part A expenses after exhaustion of hospital inpatient coverage 100% of Part B preventive services after annual deductible ($124 in 2006) 50% of Part B costs after annual deductible (not including preventive services) 100% after Parts A and B annual costs total $4,000 (in 2006) 50% for the first three pints of blood 50% for hospice and respite care after annual costs total $4,000 (in 2006) 50% for skilled nursing home care after annual costs total $4,000 (in 2006) Plan L Highlights of the standardized benefit structure of plan L include; 75% of the Part A deductible ($952 in 2006) 100% of the Part A coinsurance amount for days ($238 per day in 2006) 100% of the Part A coinsurance amount for days ($476 per day in 2006) 100% of Part A expenses after exhaustion of hospital inpatient coverage 100% of Part B preventive services after annual deductible ($124 in 2006) 75% of Part B costs after annual deductible (not including preventive services) 100% after Parts A and B annual costs total $2,000 (in 2006) 75% for the first three pints of blood 75% for hospice and respite care after annual costs total $2,000 (in 2006) 75% for skilled nursing home care after annual costs total $2,000 (in 2006) Plan K and Plan L 27

30 Plans K and L continued The Part A per benefit deductible and co-payments, as well as, the Part B annual deductible and co-payments are likely to increase each year. Additionally, the total annual out-of-pocket costs for plan K and L may increase from year to year. Several companies have decided to offer these new plans and are listed in the premium charts on pages 33 through 41. What Is Medicare Select? What is Medicare Select is a type of MedSup policy. If you buy a Medicare Select policy, you are buying one of the standardized MedSup plans. However, with a Medicare Select policy, you must use specific hospitals and, in some cases, specific doctors to get full insurance benefits (except in an emergency). For this reason, Medicare Select policies generally cost less than other MedSup policies. Medicare Select and Guaranteed Issue Rights? What Are Guaranteed Issue Rights? In some situations, you have the right to buy a MedSup policy outside of your MedSup open enrollment period without regard to your health status. These rights are called guaranteed issue rights because the law says that insurance companies must sell you a MedSup policy. In these situations, an insurance company Can't deny you MedSup coverage or place conditions on a policy (like making you wait for coverage to start), Must cover you for all pre-existing conditions, and Can't charge you more for a policy because of past or present health problems. In many cases, these rights also apply when your health coverage is changed. Remember, it is best not to wait until your current health coverage has almost ended before you apply for a MedSup policy. You can apply for a MedSup policy early (for example, while you are still in your health plan) and choose to start your MedSup coverage the day after your health plan coverage ends. Doing so will prevent gaps in your health coverage. 28

31 Guarantee Issue Opportunities MedSup protections apply to people with medicare who face certain situations. When a person is in one of the eight situations as explained below, the person has what is known as a guaranteed issue opportunity. There may be times when more than one situation applies when this happens the person may choose the protection that gives the best choice of policies. These situations apply to both MedSup and Medicare Select policies. Eight different situations can create a guarantee issue opportunity for people covered by Medicare. 1. Coverage through a Medicare Advantage plan ends because the plan is leaving the Medicare program. MedSup plan choices: A, B, C, F Note: If the Medicare Advantage plan terminates or stops providing Medicare services, the plan must notify the enrollee by October 2 that it will terminate December 31. In that event, the enrollee will have from October 2 until 63 days after the disenrollment date to apply for MedSup plans A, B, C or F. 2. Coverage through an employer or another type of group health plan ends. MedSup plan choices: A, B, C, F 3. Coverage ends because the person moves out of the plan s service area. MedSup plan choices: A, B, C, F Guarantee Issue Opportunities 4. When first eligible for Medicare at age 65, a person joins a Medicare Advantage plan. Within the first year, the person decides to leave and get a MedSup. MedSup plan choices: A L 5. A person who dropped a MedSup plan to join a Medicare Advantage plan or Medicare Select plan for the first time now wants to leave during the first year of joining the new plan. MedSup plan choices: A, B, C, F, K, L 29

32 6. Coverage ends because the MedSup company goes bankrupt or coverage ends through any means that is not the fault of the insured person. MedSup plan choices: A, B, C, F 7. A person with a MedSup policy, a Medicare Advantage plan or a Medicare Select plan leaves because the company misled the insured person or did not follow the rules. Examples: the marketing materials were not true or the plan did not meet quality standards. MedSup plan choices: A, B, C, F 8. A person with a MedSup policy (H, I or J) that covers prescription drugs wants to enroll in a Medicare prescription drug plan (PDP) instead and get another MedSup policy from the same company without prescription drug coverage. MedSup plan choices: A, B, C, F, K, L Guarantee Issue Opportunities Important: In some situations, you have a guaranteed issue right to buy a MedSup policy because you lost certain kinds of health coverage. You should keep a copy of any letters, notices, and claim denials you get. Be sure to keep anything that has your name on it. Also, keep the postmarked envelope these papers come in. You may need to send a copy of some or all of these papers with your application for a MedSup policy to prove you lost coverage and have the right to these MedSup protections. 30