Medicare Supplement insurance, commonly referred to as “Medigap,” is available for purchase by anyone enrolled in Medicare. Its purpose is to cover some of the out-of-pocket expenses associated with Medicare benefits.
The recent legislative changes have led to revisions in all Medigap Plans. Some lettered plans underwent modifications, others were discontinued, and new plans were introduced. While these new plans won’t take effect until June 1, 2010, they may be promoted and marketed in early 2010.
If you are satisfied with your current Medigap Plan, you have the option to retain it by continuing to pay premiums. Consider acquiring a new plan only if your existing one no longer suits your needs or if the premium is excessively high, and a new plan with lower premiums meets your requirements.
Existing Medigap Plans purchased before June 1, 2010, remain unchanged. They are guaranteed renewable as long as premiums are paid, and their benefits remain unaffected by legislative changes.
To understand how these changes may impact you, it’s essential to identify your Medigap Plan type. If you are unsure, consulting your insurance agent or the issuing company can provide clarification.
Effective June 1, 2010, the following changes were made to Medigap Plans:
- Introduction of two new Medigap Plans (M and N) with new cost-sharing rules.
- Addition of hospice benefits to Plans A through D, F, and G (Plan E discontinued).
- Increase in excess charges coverage to 100% for Plan G.
- Discontinuation of Plans E, H, I, J (including high-deductible Plan J).
- Removal of preventive care benefits from all plans due to Medicare coverage.
- Elimination of Home Recovery benefit from all plans due to underuse.
Other changes to Medigap rules include:
- Expansion of “guaranteed issue” coverage to buy a policy without health screening or waiting period when employer-provided insurance stops covering Medicare’s 20% co-insurance.
- Extension of “open enrollment” rights to include COBRA and CalCOBRA situations.
- Prohibition of medical information requests during “guaranteed issue” or “open enrollment” applications, except for the initial Medicare Part B enrollment.
If you already have Medigap insurance, a 60-day “open enrollment” period follows each birthday, allowing the purchase of a new policy without medical screening or waiting period, provided it offers the same or fewer benefits than the existing policy. The new law specifies equivalent plans for clarity.