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Differences Between Medicare and Medigap

One of the benefits of our medicine system is there are tools the elderly can use to take better care of themselves. The main thing which confuses seniors is the difference between Medigap and Medicare and which plan is the best for them.

It is extremely important to realize the fact that Medicare is not sufficient to cover all your medical expenses. This is the reason why Medicare supplements are created to fill the gaps in between the original Medicare coverage. These Medicare supplements are also known as Medigap insurance. Every state can differ in terms of Medigap policies, the Medigap plans in Arizona are regulated by the State of Arizona and the federal government.
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There are basically twelve (12) standardized Medicare Supplement plans naming from (A to L) that is covering the entire United States. These 12 Medicare supplements plans have their own set of basic and extra benefits. All insurance companies are obliged to sell Plan A and B as a rule of law. One thing which is common among the Medigap plans is that you cannot be charged differently from others in a particular state for a Medigap insurance plan. For example, if you pay $200 amount for Plan D in Miami, everyone will be paying the exact same amount everywhere in United States. Your Medicare supplements can only cover your expenses, you will have to buy separate policy even for your spouse.

One thing should be kept in mind is you don’t need to buy Medigap insurance policy if you are covered under a group of health insurance plan. And it is not necessary that all 12 plans may be available in all the areas.

Differences between Medigap and Medicare

Many people confuse themselves with the Medicare and Medigap advantages. Basically, Medigap refers to a bunch of supplemental insurance plans that works with the combination of regular medical benefits. Many medical options such as hospital accommodation or international transport are usually not covered in Medicare plans however they are covered in Medigap plans.

Expensive payments are also often covered in Medigap that are charged to Medicare patients without Medigap. Different insurance companies which sell Medigap plans give the same benefits all over the country. Insurance companies can be different but the policies, terms and conditions and the benefits will be same all across the United States. Another thing to keep in mind is that Medicare advantage plans replaces the original Medicare because these Medicare plans are run by private companies and must be able to provide the same coverage as Medicare A and Medicare B.

Some Medicare advantage plans also offer dental, vision, ENT or prescription coverage. Medicare plans are usually much cheaper than Medigap plans, if you are short on funds or you have planned to settle at one place, than Medicare is the best choice for you.

According to the latest research, Medigap plans are typically more expensive than the Medicare advantage plans. Medigap offers a variety of additional coverage to Medicare whereas the coverage of Medicare and Medicare advantage is almost same. Medicare offers a smaller network of doctors but Medigap allows the access to a larger network of doctors. In short, Medicare is recommended for those who are on a tight budget and if your pocket allows you than you must go for Medigap.

Medigap and Medicare plans have same prices almost across whole of the United States and these prices are set using the below mentioned three methods:

Community-Rated method: This method charges everyone the same premium regardless of their age or sex.

Age-Rated method: This method sets the price based on your age when you purchase the plan.

Attained-Age-Rated method: This method will increase the cost each year as you age.

Before buying any plan for yourself, you should understand the levels of coverage from (A-L). Plan F covers everything that Medicare fails to cover, so you do not have to pay any extra costs for doctor/hospital. Lower levels of coverage involve a corresponding lower premiums but doesn’t fill like the Plan F. Another thing to remember is that only you can determine which is the best plan for you as there several type of “pay now or pay later” plans. For example, Pay Now Medigap plans are the most expensive each month. however they will save you a great portion of money if you need extensive medical treatment or service. If you think that your budget can afford a Medigap plan, than they are the best way to protect your health. Pay Later Medicare will always seem to be less expensive in short run because of their lower monthly premiums. Extra services including hospital accommodation, transport or other prescriptions are much more expensive with Medicare plans than with the Medigap plans.

If you are interested in any of the Medicare or Medigap plans, visit AZ Medicare, the best Medicare insurance for Arizona residents. For senior citizens, Medicare only covers 80% after your deductibles have been paid. Medicare plans usually don’t include Plan D which is the drug plan, but it may be included in your Medigap plans.

Medicare advantage plans further include several types of plans, some of which are:

Health maintenance Organization (HMO) plan: Your choice is restricted for hospitals and doctors in this plan, except for emergencies.

Preferred Provider Organization (PPO) plan: You can choose doctors or hospitals outside the scope but it will cost you more in addition to the medical care within PPO.

Private Fee-for-Service (PFFS) plan: You are free to select your hospital or doctor in any way you want. The plan will determine the sharing of expenses.

Arizona Medicare Advantage Plans

According to the latest statistics, a huge amount amount of retired people find Arizona the best place to live because of the warm climate and medical facilities. Millions of residents are depending upon the Medicare for health and life insurances. Since basic Medicare plan doesn’t cover everything, people may want Medigap or Medicare advantage plans.

Arizona is only state which has the most amount of Medicare recipients. Phoenix, Tucson and Mesa are the largest cities of Arizona and there are about 15% Arizonians who are 65 years and up receiving Medicare and about 14% Arizonians receiving Medicare. Almost all seniors are dependent on Medicare benefits for health insurance. Among all the senior citizens, approximately 30% will choose the Arizona Medicare Advantage plans. The other 25% will choose Medigap plan instead. The remainder may have a different public or private coverage, but most do not just rely on Part A and Part B Medicare, because they want to ensure that health care costs remain affordable.

Anyone choosing Medicare insurance or any other type of health insurance needs to strike a balance between premiums and benefits. Medicare Advantage plans for Arizona are attractive because many still have a very low or even $ 0 premium surcharge. Medicare Advantage plans also include Part D drug coverage at no additional cost.

On the other hand, these cheaper plans have many co-pays and deductibles. Also many recipients operate on a tight budget during retirement. Everyone has their own plans for retirement, for some people it makes more sense to pay a hefty amount for the Medigap insurances that covers all the health expenses that are not originally covered in Medicare.

Interestingly, Medicare supplement insurance plans C and F are usually the most expensive but they are also the most popular among the people who purchase supplements.

As a beneficiary, you are free to enroll in any Medicare Advantage plans you like. All the plans offer health benefits under Part A and Part B both. Many Medicare Advantage plans also cover prescription drug coverage (Part D). Additional benefits can also be utilized by paying an extra cost on your Medicare advantage plan. You may qualify for these plans if you are entitled to Medicare Part A and enrolled in Medicare Part B.
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There are many private companies who offer Medigap plans for senior citizens. People can easily sign up for one of several Medicare advantage plans if they want to receive the most of their medical insurance coverage company. Keep in mind that if you are going for Medicare advantage plan, you must be enrolled in Medicare Part A and B.

Secondly, you must be living in the area where they have Medicare network providing advantage plans. Most Medicare Advantage plans have prescription drug coverage built into the plan. This is not always the case, because it may be what is called stand-alone Part D plan.

Many people join the Medicare advantage plan as soon they turn 65. This process is called open enrollment period when you have only six months to enroll in the plan. After registration, if you want to change your plan, you’ll have to wait until the annual election period, which occurs every year from October 15 to December 7th. During this time, you can switch plans or return to original Medicare options, for this year you will not be able to move out of your plan, or join a new Medicare Advantage plans for 2016 outside of that enrollment period.

Type of Medicare Advantage Plans:

Below listed are some of the main advantage plans available across the United States:

Health Maintenance Organization (HMO):
Health Maintenance Organization plan only allows  you to select certain doctors and hospitals within the network. Unless it’s an emergency, only then can you go to those approved locations. If you plan to visit someone outside your network, it will not be covered under your plan and it will be charged separately.

Preferred Provider Organization (PPO):
Preferred Provider Organization plan allows you to save your money by selecting the specified doctor and healthcare provider or hospital. You will be required to pay a bit more if you wish to go to those that are not on the list of approved providers.

 Private Fee for Service (PPFS):
Private Fee for Service a plan which does not require you to go to an approved list of providers. Instead, you will have the choice to select any provider you want. The only drawback is that there are very few people who accepts the PPFS plan.

Special Needs Plans (SNPs):
Special Needs Plans are basically designed for the people who have some specific and severe disabilities and diseases. The list of accepted providers is made on the needs of the subscriber and who will be able to fulfill their needs.

Every Medicare advantage plan is created to operate on a network. It means that all health care providers will be located within a specific area. You are required to live in the local area if you want to get covered by a certain plan. If you move to a new area, you may change your provider or insurance plan, depending on where you moved and what type of network is used.

Medicare Part D Premiums Will Jump In 2011

For Medicare enrollees who are hoping to catch a break on their prescription drug costs, 2011 doesn’t hold out much promise. Industry analysts say that most major Part D prescription drug plans will increase their premiums for coverage in the 2011 year. Right now, Medicare Part D enrollees pay about $32 on average per month for prescription drug benefits, but a study conducted by Avalere Health says Part D subscribers should plan to pay about 10% more for prescription coverage in 2011.

Part D premiums aren’t limited, so some prescription drug plan costs could rise much more than average. The study cites one plan whose premiums will increase by nearly half for 2010. Avalere Health reviewed the top 10 Part D prescription drug plans, which serve about 70% of beneficiaries who are enrolled in the optional coverage plans.

The study also estimates that about 3 million Part D subscribers will need to switch their current Part D plan for 2011. Most of those beneficiaries should be able to find comparable coverage with their current provider, but about 300,000 beneficiaries may need to find a new provider altogether. Federal regulations require that Part De providers consolidate coverage into “non-duplicative plans” but some industry analysts say that consolidation may mean some beneficiaries will see higher premiums if they stay with their current insurer.

The AARP will eliminate its MedicareRx Saver plan, requiring about 1.5 million subscribers to enroll is the organization’s MedicareRx Preferred plan, which has a premium cost that is 15% higher than the Saver plan. Those already enrolled in the Preferred plan will see a drop of about 11% in the cost of their annual premiums.

The Centers for Medicare and Medicaid Services say the concern could be nothing more than a tempest in a teapot. According to the agency’s figures, most Medicare Part D subscribers will see an average increase of no more than 3% (about $1) per month in their premium costs, even if they need to switch plans.

One reason for the increase in premiums is the improved “gap” coverage beneficiaries will receive beginning in 2011. In the past, seniors who exceeded pre-established spending limits on prescription drug benefits had to pay the entire cost of their prescriptions until they became eligible for catastrophic drug coverage. Beginning this year, those who exceed the plan limits on spending will be eligible to buy prescription drugs at a reduced rate while in the coverage gap. By 2020, the gap should be entirely eliminated.

3.75M Medicare Recipients Will Get Donut Hole Check In 2010

According to figures released by the administration, more than 750,000 checks for $250 have already been mailed this summer to Medicare recipients who have exceeded their basic Medicare Part D benefits. The so-called “donut hole” is a gap in prescription drug coverage that will cause beneficiaries to pay the entire cost of their prescription drugs once their basic benefits are exhausted but before catastrophic drug coverage kicks in. Basic Medicare Part D coverage is exhausted when the beneficiary and his or her insurance company have spent a combined total of $2,830 on prescription medications in a single coverage year.

The problematic coverage lapse isn’t a minor issue. An estimated 3 million more checks will be mailed out before the end of the year, as more seniors qualify for the one-time rebate. The $250 check is the administration’s first step toward closing the donut hole altogether, a process that’s expected to take nearly ten years. Beginning next year, the cost of most prescription drugs will be halved for beneficiaries whose basic coverage runs out. Eventually, the gap will be eliminated entirely, and beneficiaries will maintain annual prescription drug benefits with no gaps in the coverage.

As part of the “gap reduction” plan in 2011, Medicare will “streamline” its Part D plans, which may mean fewer Part D plans to choose from. One of the new Part D rules for 2011 limits carriers from offering more than one Part D plan in a single coverage area. Medicare’s goal with the new rules is to reduce the number of confusing choices that confront beneficiaries during the annual enrollment period, but this may force nearly three million seniors enrolled in popular drug plans, such as the multiple Part D options offered by AARP and CVS-Caremark, to switch plans.

The AARP released a study last month that contradicted the Medicare administration claims that reforms will lower the cost of prescription drugs. In the AARP’s study of brand name drug costs, the organization said that in the last five years, the cost of the most popular prescription medications rose by 41.5%, more than tripling the 13.3% rise in the consumer price index for the same time period. Drug makers say that the AARP is being alarmist regarding the price of brand name drugs because about three-fourths of consumers in the US use lower-cost generic drug formulations.

Medicare Prescription Drug Gap To Close By 2020

Medicare prescription drug plans can help beneficiaries reduce their out-of-pocket expenses for prescription drugs, but there’s a catch: the coverage gap. If you’re enrolled in Medicare, you know that your prescription drug coverage essentially stops when you and your insurance plan have spent a combined total of $2,830 on prescription medications.

Beyond that point, the beneficiary covers the full cost of prescription medications until drug expenditures in a calendar year reach $4,550. If your drug costs exceed this amount, catastrophic coverage kicks in and you’ll pay either $2.50 for generic drugs ($6.30 for brand name drugs) or 5% of the drug’s cost, whichever is greater.

The new healthcare legislation aims to correct this by 2020, and is also the impetus for the $250 “gap” check that some beneficiaries who have exceeded the $2,830 spending limit will receive. Some relief provisions of the new law go into effect in 2011, and allow beneficiaries who have crossed the $2,830 threshold to purchase generic drugs at a 7% discount and brand name drugs at a 50% discount.

In subsequent years, the amount of the drug discount will increase until 2020, when all drugs will be available at a 75% discount for beneficiaries “in the gap.”

The issue isn’t a small one; about 3 million Americans each year fall into the prescription drug coverage gap, also known as the “doughnut hole.” The doughnut hole isn’t a given; some insurance options can help you avoid the coverage gap.

The American Association of Retired Persons (AARP) provides a “Doughnut Hole Calculator” in both English and Spanish, to help beneficiaries determine when or if their present coverage will allow them to fall into the gap based on their current prescription drug needs.

2011 Medicare Part D Choices Require Research Says Firm

Avalere Health, a healthcare policy research firm, says that Medicare beneficiaries must do some research before making their Medicare Part D plan election for 2011.  The company says that significant changes await some enrollees, even if they elect the same Part D provider they had in 2010.  According to the company, many Medicare Part D providers have changed their formularies and co-pay costs, meaning that some drugs that were covered in 2010 may not be covered in 2011.

One of the more noticeable changes may be in the way providers structure co-pays.  According to Avalere Health, more providers are structuring their Part D plans with five or more tiers, which will allow providers to charge different co-pays for drugs in different plan tiers.  The number of tiered plans has risen from 27% in 2009 to more than 40% in 2011.  Some plans that already use tiered payment structures have two different tiers for generic drugs.

Another major change for consumers will be in their choice of pharmacy.  Some Part D plans will use preferred pharmacies and will base consumer out-of-pocket costs not only on the prescribed drugs, but also on whether or not prescriptions are filled at a participating pharmacy.  Consumers who use non-plan pharmacies may find themselves paying up to 50% more in out-of-pocket costs for prescription drugs.

More Part D plans are also using pre-authorization and limiting the quantity of medications that can be dispensed at one time, creating an overall higher cost to the consumer for pharmaceuticals in the form of additional co-pays.  The end result of these changes is a net decrease in the number of drugs covered by the top ten prescription drug plans (PDP) for 2011.

Among the top ten plans, the 2011 formularies cover between 50% and 87% of prescription drugs.  To illustrate the potential impact of changes among drug plans, Avalere’s analysis shows that while the AARP’s 2011 formulary covers four popular rheumatoid arthritis drugs with a 33% cost-share, Humana-WalMart’s 2011 formulary covers only two of the four drugs and has a 35% cost-share on the covered formulations. In addition, the cost-share at non-preferred pharmacies is significantly higher.  Enrollees must pay out-of-pocket for drugs not covered by their provider’s formulary. More information about the Avalere Health study can be found at AvalereHealth.net.

Arizona Medicare Advantage Providers Will Benefit From Bonus Plan

A recently announced bonus plan designed to reward outstanding Medicare Advantage Plans will also give a boost to average Arizona Medicare Advantage plan providers.  The original design for the bonus structure offered additional incentive payments for plans that achieved a four- or five-star ranking from the Centers For Medicare and Medicaid Services (CMS) beginning in 2012.  Changes to the bonus structure will enable three star plans to receive some incentive payments as well.

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