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What Really Is a “Medigap” Plan?

Many people confuse the term “Medicare Supplement Plans” with “Medigap Plans”. It should be noted that Medicare supplement plans fill in some gaps in coverage in original Medicare which is known as “Medigap”.

There are 10 standardized Medigap plans available for senior citizens, each marked with the letters A to N.  And these plans are only available through private insurance companies, and it is not necessary for the insurance companies to sell all the 10 Medicare supplement plans. Every insurance company selling Medicare Supplement policy have to offer at least Plan A and if they offer any other policy than they must also offer either Plan C or Plan F.

Please note that Medicare Supplement plans can be used only to pay Original Medicare expenses. These plans can be used to cover expenses that you may have in Part C Medicare. If you enroll in Medicare Advantage plan, you can keep your Medigap plan as long as you keep paying the monthly fee, but you will not be allowed to enjoy Medigap plans on the cost of Medicare advantage plans. There are few things that you need to keep in mind before going for Medigap plans.

First and foremost, the beneficiaries must be enrolled in Medicare Plan A and Plan B. Secondly, if the beneficiary has a Medicare advantage plan than they can apply for Medicare policy and you will have to leave Medicare Advantage plan before you can enroll in Medigap. These Medigap policies are only able to cover one person. If anyone from your family want to avail then they will have to enroll themselves.

Monthly premiums will have to be paid to private insurance companies in addition to monthly Plan B premium. You are not bound by any insurance company, you can select any insurance company you like that is licensed in your state. Each standardized Medigap policy is guaranteed renewable, even when suffering from health problems. This means that the company cannot cancel Medicare Supplement insurance contracts as long as you pay the premiums. Medicare supplement plans allow you to use any provider that can accept Medicare. Among all the states of America, Arizona is considered as one of the best places to live after retirement. Arizona provides the best Medicare and Medigap help to senior citizens.

There are two specific Medigap plans (Plan k and Plan L) which are capable of covering out of pocket limits, because once your basic health care costs reaches the limit, your Medigap plan will cover 100% of all the expenses for the rest of your year. It is worth mentioning that original Medicare don’t have the ability to include a yearly out of pocket limit. Remember, Medicare supplement plan is meant to work side by side with your original Medicare coverage. You only need to remain enrolled in original Medicare to take the benefits of Medigap.

Although private insurers are required to offer the same benefits for each Medicare plan, these companies can change the costs of premiums they charge for this coverage. So if you are looking for Medigap coverage, you must contact different insurance companies to find a Medicare Supplement plan that is appropriate for your medical and financial needs. Remember that insurance companies use different methods to price their Medigap plans. Pricing method that company uses may affect the amount of premium you pay when you first enroll in a Medicare Supplement plan, as well as your long-term costs.

Medigap can be used only by people enrolled in traditional Medicare only. It is not a Government-run program but you can buy private insurance to cover some or most of your expenses in traditional Medicare. Medicare advantage plans consist of variety of private health plans for every type of needs. HMOs and PPOs are the most commonly used among the beneficiaries. Most of the plans include drug prescription coverage at no extra cost. Some plans are capable of covering routine hearing and vision services but not all. By law, all plans have annual limits for out-of-pocket costs.

Another difference from the traditional program is that most plans require you to go to the doctors and hospitals within their network and if you want to go out of the network, you will have to pay extra.

If you enroll in Medicare Advantage health plan, you can’t use a Medigap policy to cover your expenses, and it is illegal to sell insurance Medigap policy if you are enrolled in a Medicare Advantage plan. If you want to stay in traditional Medicare, you will need a separate Part D plan to get prescription drug coverage and pay an extra premium for it. A Medigap does not cover drugs outputs of- pocket.

Some states even offer Medigap plans for beneficiaries under 65 years of age who are eligible for Medicare because of disability or under certain conditions. Federal law doesn’t allow states to sell Medicare Supplement insurance for under 65 years, but depending on where you live, some states offer Medigap coverage for beneficiaries under 65 years of age. Every state can have its own eligibility criteria and terms. If you are a Medicare beneficiary under 65 years of age and interested in purchasing a Medicare Supplement insurance, contact your state insurance department to find out if you qualify for Medigap coverage in your state or not.

Select the Best Medicare Supplement Plan for Yourself

Many of us spend a lot of time trying to understanding the difference between Medicare and Medigap plans. Today, you will clearly get to know the difference between these two. This article will also help you to wisely select your plan.

Basically, Medicare supplement plans are also known as Medigap plans or policies and they can cover some of the costs that original Medicare coverage doesn’t include. Originally, the government provides Part  A and Part B of Medicare coverage to all the eligible individuals. However, this Medicare coverage might not fulfill your demands at later stage so you will need to decide at some point whether the traditional coverage is enough for you which is provided by the government or you need some other Medicare supplement plans.
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Medicare and Medigap plans are federal healthcare programs which is designed to fulfill the needs and to help senior citizens during their golden years. According to the law, any senior citizen who is 65+ and currently enrolled in Medicare can apply for a Medigap plan. There are about 10 Medigap plans available to choose from. According to the Centers for Medicare and Medicaid Services (CMS), all the Medigap plans have to offer the same coverage plans, regardless of the company which is selling it or where they are located. It means that Plan A and Plan B is exactly the same in all 50 states of America.

In recent years, private Medicare plans have become more popular than the traditional plans. It has been observed that more than 10 million senior citizens has enrolled in the Medicare advantage plans. These plans actually help to combine the physician and hospital services into one package. Before selecting the perfect plan for yourself or your loved one, you need to keep in mind few things.

First of all, if there are no Medicare advantage or supplement plans are available in your region than you will be in traditional Medicare, which is administered by federal government. You can select any doctor who accepts Medicare in the traditional Medicare and you will have to pay deductibles of the cost of care. If you had a Medigap policy, those expenses would have been covered by your Medigap plan. So, a Medigap plan covers a vast variety of treatments which Medicare wouldn’t cover. There are multiple types of Medicare supplement plans.

Most plans such as health maintenance organizations and preferred provider organizations, manage to control costs. Other like HMOs and PPO, which is based on a network of doctors, so you want to make sure that your doctor and the hospital of your choice are involved in the network. You can also ask about the policy for referrals, In case of a PPO, you may want to know how much you have to pay to see doctors who are not on the network. Private plans fee-for-service provides more choice because they are not allowed to have a network of doctors and hospitals.

Sometimes, Medicare supplement plans have extra benefits like eye exams, dental care and hearing coverage. For many people, this coverage doesn’t seem to be enough, and this is where private insurance, such as Medicare Supplement plans come in. These plans may offer coverage of health services not covered for Part A and Part B. To participate in a Medicare Supplement plan a beneficiary must be enrolled in Part A and Part B, live in the state where it is offered, and generally be over 65 years. But you must make sure you understand each and every point of the Medicare advantage plan you will be selecting.

One benefit of Medigap plans is that Medigap policies are renewable, as long as you pay your monthly fees and your insurance company doesn’t go bankrupt, you cannot be dropped from your plan. Medicare has a small network of doctors, but Medigap provides access to an extensive network of doctors. In short, Medicare is designed for those on a tight budget and if your pocket allows you then you have to go Medigap.

According to the latest research, Medigap plans are usually more expensive than Medicare Advantage plans. Medigap offers a variety of supplemental insurance to Medicare, while Medicare coverage and Medicare Advantage are almost identical. Furthermore, you also need to keep in mind that if you travel a lot or migrate yearly as per job requirements or you live in an area where there are lack of medical facilities, then you must go for a Medigap policy. No doubt, there are other ways to supplement your Medicare coverage but Medigap offers the best flexibility.

With Medigap, you are free to receive care from any hospital and any doctor which accepts Medicare. If you have a need for vision or dental benefits, then you will also have to buy Medicare supplement plans for that which will be covered by your Medigap policies. Now that Medicare Part D is also here, so all Medigap plans which used to offer prescription drugs are being phased out.

Last but not the least, if you have signed up for a Medigap plan but you later realized that it wasn’t right for you, there’s no need to worry because as long as you make that discovery within a month of coverage, you can cancel the coverage for a full refund.

For Arizona residents who are confused about which plan to choose, visit www.azmedicare.info for all the details and help on Arizona Medicare Supplement plans.

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.

Senior Healthcare Insurance Plans in Arizona

There is no doubt that everyone needs medical attention at some point in their life. The younger generation has the ability to stay strong and fight small medical issues. Older people don’t have the stamina and persistence and power to fight back. They need proper medical attention and if they don’t insure themselves, then, they may be spending plenty of money on medical bills. old-660831__180

Federal government has already introduced Medicare Plan A and Plan B long time ago, now for people older than 65 there are variety of supplement plans which add to traditional Medicare. Basically Medigap or Medicare supplement insurance plans covers the gap between the traditional Medicare and your medical costs. These Medicare supplement plans are sold by private companies separately. These plans are perfect for senior citizens who have expenses that will not be covered under traditional Medicare Plan A and Plan B. If the original Medicare does not cover your medical needs, you may want to look to supplement that coverage with a Medigap or Medicare Advantage plan. Both of these plans can be further supplemented with Part D drug coverage.

 Different insurance companies are allowed to sell the same Medigap plan for different amounts. Therefore, you will have to look around a little to get the best offer. If you are looking for a Medigap than you must already have Medicare Plan A and Plan B. It should be kept in mind that drug coverage is not a part of Medigap insurance plan. You will have to get the Medicare Part D separate to cover you drug prescriptions. Regarding Medicare, you must know that only Medicare Part A (hospital insurance) and Medicare Part C (Medicare Advantage) count as minimum essential coverage. If you have the minimum essential coverage you will not owe a fee for not having health insurance. Medigap itself is nothing, but it provides a lot of benefits when combined with original Medicare Part A and Part B.

In Arizona, there is a wide range of senior health insurance plans readily available. There are many options available which include health insurance plans for people who have certain health conditions, health insurance plans for people who like to travel in the US and abroad, health insurance plans for those who want to seek the best treatment from doctors in the United States accepts Medicare and health insurance plans for people with low incomes.

Arizona is the only state where majority of the people like to retire and it has the best senior citizen health insurance, Medicare, life insurance and retirement planning options. Not many people know that if you are eligible for Social Security retirement benefits, you will be automatically eligible for Part A of the Medicare as soon as you turn 65 years of age. If you receive a pension of social security benefits, you are automatically enrolled in Medicare Part B at the time you became entitled to Medicare Part A. All the Medicare Advantage plans are approved by Medicare but they are all offered through private insurance companies within the state. Sometimes these plans can be more beneficial, but might cost you a little more than the original Medicare plan.

These plans vary widely in costs and benefits from state to state, so go through your options carefully before you plan to choose one.Benefits of Medicare Plan A include hospital stays, skilled nursing and home health care. Medicare advantage plans also cover all Medicare Part B benefits, including doctor visits, outpatient care and preventive services. Many of them are also benefits as a routine hearing and vision care, fitness program, wellness service or helpline.If you plan to enroll Medicare advantage prescription drug plan than you will also get Part A and Part B coverage along with this combine in one plan. This plan is a good choice for many of the prescribers. In order to get fully insured, you may want to supplement your Medicare coverage to Medicare supplemental insurance i.e. Medigap, which generally pays the deductibles and extra payments which are not covered by Medicare Part A or B.

Medicare allows a small network of doctors but Medigap provides access to a broader network of doctors. In short, Medicare is recommended for those on a tight budget and if your pocket allows you to go for Medigap.Medigap policies are sold by private insurance companies to fill gaps in original Medicare plan. Most states have already adopted legislation restricting the sale of Medigap insurance for no more than a standard policy. The main difference between Medicare advantage and Medigap is that Medigap is used to supplement the original Medicare. These advantage plans are used to get more Medicare benefits, while a Medigap policy is only used to supplement the cost of your original Medicare benefits. Choosing the right Medigap plan depends on your medical needs and costs. If the original Medicare does not cover the actual cost of medical expenses and you have plenty of options. In most countries these options indicated by the letters A through N.

Each standardized Medigap policy must offer the same basic benefits, regardless of the insurance company selling. Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies. According to the latest research, Medigap plans are typically more expensive than Medicare Advantage plans. Medigap offers a number of additional coverage for Medicare while Medicare and Medicare Advantage are almost the same. Medicare allows a small network of doctors but Medigap provides access to a broader network of doctors. In short, Medicare is recommended for those on a tight budget and if your budget allows you to go for Medigap.

Medicare Fraud Scams Net 75 In AZ, FBI Investigations

Two people have been arrested and charged with fraudulently billing insurance companies for more than $600,000 in services that were never provided. Gevorg Melkonyan and Elina Aruryunova are accused of stealing nearly 130 identities from Medicare recipients and 12 doctors to generate phony Medicare reimbursement claims.

The Department of Insurance became involved when one of the physicians whose identity was stolen contacted them to report that patients he had never treated were calling about charges from his office that showed up on their insurance statements. Further investigation led the Department to the fraudulent claimants.

The Obama administration recently awarded $9 million in grants to help more than 50 organizations combat Medicare fraud. Much of the money will be spent on information and education programs designed to teach Medicare recipients how to spot and report potential Medicare fraud. The grants, which fund the Senior Medicare Patrol (SMP) are targeted to assist in areas where Medicare fraud is among the highest. To date, the program has reached more than 3 million Medicare recipients and has produced more than 3,000 reports of Medicare fraud, waste and abuse.

Medicare fraud is a growing problem. The National Health Care Anti-Fraud Association estimates that about 3% of total expenditures on health care are based on fraudulent claims. If the statistic is accurate, that means about $15 billion is wasted each year on fraudulent Medicare claims.

In October, the FBI launched raids that resulted in the arrests of 73 Armenians with ties to organized crime after finding billing for $163 million from nearly 120 non-existent clinics in 25 states. In this particular fraud ring, the organizers used identity information stolen from nearly 3,000 New York Medicare recipients to generate bills for services. About $36 million was paid since the operation began in 2006. Phony invoices for unreasonable tests performed by specialists tipped investigators to the fraudulent scheme.

SCAN Health Plan Hispanic Outreach Program Targets Arizona

SCAN Health Plan Arizona has unveiled an outreach program designed to help Arizona’s aging Hispanic population become more aware of its services for seniors. The program’s organizers say the goal of the effort is to help keep Hispanic Arizonans healthier and more independent for a longer period of time.

The outreach program works with other community organizations to deliver prevention and education programs and Spanish-language advertising materials to the state’s Hispanic media organizations. In addition, SCAN Health Plan Arizona will increase its participation in community health fairs, and will host open houses designed to attract Hispanic senior citizens.

Some Medicare patient advocates believe that new federal health reform legislation will result in reduced care for aging Hispanics. Under current regulations, they charge that a study by the Heritage Foundation shows as many as 41% of Arizona’s Hispanic seniors currently enrolled in a Medicare Advantage plan will lose their coverage by 2017. This is in part due to changes in a beneficiary’s ability to enroll in Medicare Advantage plans when all of the health reform provisions are in effect.

Critics charge that beneficiaries who would have chosen Medicare Advantage plans under the old system will be barred from selecting that option under the new reform rules. The majority of persons affected by the change will be low-income and minority beneficiaries, many of whom are Hispanic. The Heritage Foundation report says that nearly 5 million Americans will either lose Medicare coverage altogether or will have their coverage significantly reduced, while their out-of-pocket expenses significantly increase.

SCAN hopes to reverse this and ensure that Medicare covers all Hispanic seniors in Arizona adequately by providing outreach programs in settings that are culturally sensitive, and in ways that eliminate the language barrier. The organization has already participated in one focus group study with Hispanic seniors and health care providers to better understand the concerns of Hispanic seniors and to make sure these concerns are addressed.

SCAN (Senior Care Action Network) is a non-profit organization dedicated to providing affordable, comprehensive health care and health care advocacy for all seniors. The group is also active in the State of California.

SCAN Health Plan Arizona Expands Medicare Advantage Coverage To Pima County

Pima County, AZ residents will have an additional Medicare Advantage plan option for 2011. SCAN Health Plan Arizona will expand its coverage area to include Pima County residents, beginning January 1, 2011. Currently, the SCAN Health Plan Arizona only offers coverage in Maricopa County.

The current plan offers Medicare Advantage coverage to about 8,000 beneficiaries and has provided Medicare Advantage coverage in Arizona for three years. SCAN Health Plan Arizona says it has agreements in place with most of the leading hospitals and health care providers, and will focus its MA coverage on “affordable and accessible senior health care.” The SCAN Health Plan Arizona Medicare Advantage plan earned 3.5 out of 5 stars on its Medicare Part D (prescription drug coverage) but the Medicare Advantage plan itself does not yet have star ratings. The company’s California-based Medicare Advantage plan earned 3.5 out of 5 stars for its health care coverage and 4 out of 5 stars for its Medicare Part D coverage.

Eligible beneficiaries are those persons who are eligible for Medicare Part A and Medicare Part B, and who live in either Maricopa or Pima County. Updated plan information will be posted on the SCAN Health Plan Arizona Web site prior to the open enrollment period. Premiums for 2011 have not yet been determined, but in 2010, SCAN Health Plan Arizona did offer $0 premium plan options, exclusive of the Medicare Part B premium, which every enrollee pays. In 2010, the Medicare Part B premium was about $100 per month.

SCAN Health Plan is the nation’s fourth largest Medicare Advantage provider and serves about 130,000 enrollees in California and Arizona. To enroll in the program, eligible Medicare beneficiaries must choose the SCAN Health Arizona plan during the open enrollment period, which runs from November 15, 2010 to December 31, 2010. Coverage will begin January 1, 2011.

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.

Medicare Solvency Projected Until 2029

According to an annual analysis conducted for the trustees of the Social Security Trust Fund, changes to the delivery of health care in the United States are expected to extend the solvency of the Medicare program until at least 2029, an eleven-year extension from 2009’s prediction of insolvency in 2017. The future of Social Security is somewhat less clear, however.

While Medicare – which had largely been considered the more vulnerable of the two entitlement programs – is seemingly on a more stable path, the outlook for Social Security has not brightened much, if at all. The trustees for the Social Security Trust Fund once again predicted insolvency in 2037 just as they did in 2009. In this case, insolvency assumes that no changes are made to shore up the trust fund, delay benefits or reduce program expenses.

The trustees predict that unabated rising health care costs will place the Medicare program under extreme financial pressure and will likely force cuts in services as the program tries to balance the cost of care with the available resources. Without Congressional intervention this year, Medicare providers are looking at a potential cut of 30% in reimbursements beginning in December 2010. Providers say that reimbursements already fail to keep up with the rising cost of providing services, and a 30% cut, if enacted, will force many Medicare providers out of the Medicare program altogether.

For Social Security recipients, the trustees say that a cost-of-living increase for 2011 is unlikely, largely due to low inflation. Recipients did not see an increase in their benefits for 2010, for the same reason.

While the Medicare program is a winner under new health care reform, the Social Security program doesn’t go away empty-handed. Beginning in 2019, the law requires an additional tax to be levied on so-called “Cadillac” health care plans. At that time, employers are expected to begin reducing health care coverage to avoid triggering the tax. At the same time, compensation for certain employees will rise to offset the loss in benefits. Cash compensation is taxable to a point, and the Social Security administration is likely to see at least some additional revenue from increased wage-based compensation levels.

A bi-partisan committee is examining the Social Security program and is expected to make recommendations to the President no later than December 1. Recommended changes to the Social Security and Medicare programs could include delaying access to full benefits, increasing in tax revenues, and decreasing benefits to eligible recipients.

Medicare Part D Plans See Modest Premium Increase For 2011

Medicare says that its Medicare Part D recipients can expect to see an average premium increase of $1 per month for 2011. Despite the premium increase, changes to the Medicare Part D program will mean that many seniors will pay less overall for prescription drug coverage in 2011. The premium increase is comparable to those seen in previous years. The Medicare Part D program was introduced in 2006.

Private insurers have supplied Medicare with their bid prices for 2011 prescription drug coverage, and the agency expects to make these costs available to consumers prior to the open enrollment period, which begins in November. The cost of prescription medications will drop, in part due to promises made by the pharmaceutical industry to reduce to cost of prescription drugs paid for or subsidized in part by Medicare. In addition, 2011 represents the first year of a ten-year plan to close the “donut hole” in prescription drug coverage.

Currently, Medicare recipients must pay for prescription drug costs out-of-pocket once their prescription drug spending exceeds Medicare Part D basic coverage guidelines. Catastrophic drug coverage is available under Medicare Part D plans, but that coverage doesn’t kick in until the recipient has spent more than $3,600 out of pocket on medication expenses.

Along with the lower prices for prescription drugs, the agency aims to make choosing a Medicare Part D plan easier for seniors. The effort to streamline the prescription drug coverage options may mean, however, that millions of seniors may need to find new Medicare Part D plans. The agency will roll out information about the planned Medicare Part D changes ahead of the open enrollment period for 2011.

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