What to Expect with New Medicare Supplement Changes
With the Medicare Prescription Drug Improvement and Modernization Act of 2003 taking effect June 2010, Medicare supplement plans will undergo several major changes. This will include the elimination of four current plans for new enrollments and the addition of two new plans. The new plans are designed to lower out-of-pocket expenses for consumers and provide for additional benefits.
Medicare supplement plans, which are also known as Medigap plans, are meant to cover the out-of-pocket costs associated with Medicare Parts A and B. Individuals qualify for Medicare health insurance if they are 65 years of age or older, or if they are eligible to receive benefits due to a disability.
Currently, there are twelve different supplement plans, which are labeled Plans A through L. While the plans all share the same benefits, premiums for the plans vary according to the issuing insurer.
Medicare Supplement Plan Additions And Changes
The two additional plans that will be added are labeled as Plans M and N.
Plan M is also similar to the current Plan F in terms of benefits with several important changes. Plan M will cover only half of the Part A annual deductible ($1,100 for 2010) and none of the Part B annual deductible ($155 for 2010). Also, it will not cover any Part B excess charges. Plan M is expected to cost around 15% less than Plan F.
Plan N will offer a similar benefit structure to the current Plan F. Differences include a $20 co-payment for visits to the doctor and a $50 co-payment for emergency room visits. Like Plan M, it will not cover the Part B deductible nor offer Part B excess coverage, but will cover 100% of the Part A deductible. With these benefit changes, Plan N will cost approximately 25% less than Plan F.
All Medicare supplement plans will now include a hospice care benefit. In addition, Plan G will now cover 100% of Part B excess charges versus its current 80% coverage.
Eliminated Medicare Supplement Plans
Plans E, H, I and J will no longer be offered. Also, preventative care and at-home-recovery benefits will also be removed from Plan G. According to government studies these benefits were seldom used and deemed unnecessary.
All seniors are strongly encouraged to review their current plans. Specifically, they should check with an agent to learn about lower rate options and whether or not their current plans will be affected by the change.
It’s important to note that if you have a Medicare supplement plan currently, you can stay enrolled on it due to a grandfathering clause and your benefits won’t change. However, since these plans will no longer be offered to the public, future rates are likely to be higher than with the new modernized plans.