Medicare Supplemental

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Medicare is a federal health insurance program that is made up of two separate sections. They are entitled Part A (Hospital Insurance) and Part B (Supplementary Medical Insurance).

Part A of Medicare is automatically available to all persons over the age of 65 that are entitled to receive Social Security or Railroad Retirement benefits. Elderly not covered by Social Security may elect to join Medicare Part A if they pay a monthly premium. Part A covers inpatient hospital services for a maximum of 90 days for each benefit period. The benefit period is the time period during which benefits are received starting on the day of admittance and ending 60 days after being released.

Benefits are payable directly to the hospital or medical provider. An annual deductible must be satisfied. A second daily deductible must be satisfied while in a hospital or extended care facility from the 61st to 90th day of treatment. Benefits under Part A include prescription drugs while hospitalized. Skilled nursing, hospice and post-hospital home health care are provided beyond hospitalization if deemed medically necessary.

Part B (Supplementary Medical Insurance) is a voluntary medical insurance plan. Individuals pay a monthly premium, deductible, and 20 percent of the medical expenses. The remaining 80 percent is paid by Part B. Part B only covers charges for physicians, surgeons, and other health services. Part B does not cover eye and hearing exams, foot care, immunizations, or physical exams.

Medicare Supplemental Insurance

Medicare Supplemental policies are also know as Medigap plans. Most health insurance policies do not cover all expenses, and this especially includes Medicare. A Medicare Supplemental insurance policy is designed to pay for these expenses not covered by Medicare. Please keep in mind that Medicare Supplements typically do not cover long term care expenses.

There are ten government regulated policy types. These standardized policies are labeled Plan A to Plan J. The difference between these plans is based upon there levels of coverage. The state in which you live determines which plans are available in your state.

Medigap policies cover charges not covered for hospitalization between the 61st to 90th day of treatment. These policies are also required to cover a minimum of 20 percent of eligible expenses of Part B.

Medicare Supplement policies may not exclude pre-existing conditions.
Other Types of Medicare Supplements

There are several other forms of Medicare Supplement policies, but they all must adhere to the same standards as regulated by the NAIC (National Association of Insurance Commissioners). The plans can be structured as HMO's, PPO's, or POS's.

Services Not Covered by Medicare

Custodial care, such as help walking, getting in and out of bed, dressing, bathing, toileting, shopping, eating, and taking medicine (these are commonly referred to as activities of daily living)
More than 100 days of skilled nursing facility care during a benefit period following a hospital stay (the Medicare Part A benefit period begins the first day you receive a Medicare-covered service and ends when you have been out of the hospital or a skilled nursing facility for 60 consecutive days)
Private duty nursing care
Most outpatient prescription drugs, although a Medicare-endorsed prescription drug discount card will be available sometime in 2004
Homemaker services
Most dental care and dentures
Health care received while traveling outside the United States, except under limited circumstances
Cosmetic surgery and routine foot care
Routine eye care, eyeglasses (except after cataract surgery), and hearing aids.

Purchasing the right insurance that meets your needs can be challenging. Insurance can be one of the most important ongoing purchases you make to protect yourself and your family from financial hardship. Since your needs and financial situation change over time, it is important to understand and review your insurance policies annually to decide if the same policies are still right for you.