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Medicare Part D plans

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.

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.

Medicare Advantage Plan v. Medicare Supplement: Which One Is Right?

Medicare InsuranceIf you are new to Medicare, or will be joining the ranks of the Medicare-eligible in 2011, you may not know much about Medicare, Medicare Advantage Plans and Medicare Supplemental Insurance, also known as Medigap.  In addition, you’ll probably want to take a crash course in Medicare Part D plans, just to be on the safe side.

Traditional Medicare coverage is designated as Medicare Part A and Medicare Part B.  Part A coverage, which pays for hospitalization, has no additional premium, provided that you are age-eligible for Medicare.  Part B coverage has a premium attached to it. In 2010, the monthly premium was about $111, and is deducted from your monthly Social Security check, Railroad Retirement or Office of Personnel Management payment. If you receive none of these payments, you’ll get a quarterly bill in the mail for your Part B premiums.

You can choose some other Medicare options, including a Medicare Advantage Plan (Medicare Part C), an optional Medicare Part D plan for prescription drug coverage, and a range of Medicare Supplemental Insurance plans, collectively known as Medigap insurance.  Medicare Advantage plans take the place of Medicare Part A and Part B coverage and operate much like an HMO plan does.  Medicare Advantage plans generally offer some additional coverage that traditional Medicare plans do not.

You may also be required to enroll in a Medicare Part D plan if you choose to go with Medicare Advantage coverage.  With Medicare Advantage, you’ll still pay your Medicare Part B and Part D premiums. You may also have to pay additional premiums for a Medicare Advantage plan, depending upon the level of coverage you choose.

You can also choose to enroll in one or more Medicare Supplemental Insurance plans. Medigap plans are designated by letter (e.g., Medigap A, Medigap B, etc.) Each letter plan offers a different level of coverage but all Medigap letter plans are the same, regardless of the insurer that provides them. For example, all Medigap A plans have identical coverage; all Medigap B plans also have identical coverage, etc.) Insurers are not required to offer all Medigap insurance plans, and the premiums among insurers can vary.

Medigap supplemental insurance is designed to provide coverage for certain services that Medicare Part A, Part B and/or Part D don’t pay for, or don’t cover completely.  To take advantage of a Medigap insurance plan, you must be enrolled in both Medicare Part A and Part B. You will pay additional premiums for these services to a private insurance provider, and the additional insurance is strictly optional.  Many Medicare beneficiaries choose not to buy supplemental coverage either because they don’t need it or can’t afford it. Also, each recipient must have his or her own Medigap plan. Your Medigap insurance will not provide benefits to your spouse.

Since each beneficiary’s situation is different, your best strategy is to read all information about Medicare prior to enrolling in a plan. When you become eligible, you will receive a Medicare information booklet in the mail. This document has all of the basic information you’ll need about Medicare. You can also visit the Medicare Web site if you have Internet access to find out more information about Medicare coverage, Medicare Advantage plans and Medicare Supplemental Insurance.

Choose the insurance options that offer the best combination of coverage and cost, based on your income, your current health, and the coverage you’re likely to need in a given year. As you age, you may want to review your coverage and make changes to meet your evolving health 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.

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