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MEDICARE AND MEDICARE SUPPLEMENT FAQs

There are many questions associated with Medicare Parts A and B as well as Medicare Supplemental plans, such as;  What is the difference between Medicare Parts A and B? Do I automatically receive Medicare Parts A and B? Do I need a Medicare Supplemental policy? Is there a waiting period? Are there protections for consumers? Here are some answers to these and other frequently asked questions.

What are the differences between Medicare Parts A and B?

Medicare Part A (hospital insurance) helps pay for inpatient  hospital care, skilled nursing facility care, hospice care and home health care.  Medicare B (medical insurance)  helps pay for doctors services, outpatient hospital care and some other medical services that part A does not cover (as long as it is medically necessary).  Medicare does NOT cover the cost of prescriptions filled in a retail pharmacy.

Do I automatically receive Medicare parts A and B when I become eligible and what is the cost if any?

Generally, you are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment and you are 65 years old and a citizen or permanent resident of the United States. If you are receiving Social Security Benefits, you are automatically enrolled in Part A. You might also qualify for coverage if you are a younger person with a disability or with End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).

You can get Part A at age 65 without having to pay premiums if:

  • You are already receiving retirement benefits from Social Security or the Railroad Retirement Board.
  • You are eligible to receive Social Security or Railroad benefits but have not yet filed for them.
  • You or your spouse had Medicare-covered government employment.

If you are under 65, you can get Part A without having to pay premiums if:

  • You have received Social Security or Railroad Retirement Board disability benefit for 24 months.
  • You are a kidney dialysis or kidney transplant patient.

While you do not have to pay a premium for Part A if you meet one of those conditions, you must pay for Part B if you want it. The Part B monthly premium in 2003 is $58.70. It is deducted from your Social Security, Railroad Retirement, or Civil Service Retirement check. If you do not get any of the above payments, Medicare sends you a bill for your Part B premium every 3 months.

It is important to know that if you are over age 65 Part B need not be purchased if you are receiving medical insurance through your employer group. However, once the group coverage is terminated (i.e. retirement) you should enroll in Part B. If you did not take Part B when you were first eligible for Medicare, you may sign up during the General Enrollment Period. The General Enrollment Period runs from January 1 through March 31 of each year with the effective date of the coverage being July 1st of that year.

Remember, the cost of your Part B may go up 10% for each 12-month period that you could have had Part B but did not take it, and you will have to pay this extra amount as long as you have Part B, except in special cases.

I am over age 65 and actively working. What are my choices?

If you are employed by a company with less than 20 employees: Medicare is primary and the group plan is secondary. Since the group plan would pay second to Medicare, you might want to consider dropping the group plan if it is too costly and/or benefits are not worthwhile versus what a Supplemental plan will cost and pay.

One deciding factor when weighing group coverage vs. Supplemental coverage is that Medicare does not cover prescription drugs purchased in the retail pharmacy. With this known, most group plans cover this cost with no limitations while some Supplemental plans cover this cost only to a maximum of $1,500 or $3,000 per year. Please see the section in this document that highlights Supplemental plan limitations.

If you are employed by a company with more than 20 employees: The group plan is primary and Medicare is secondary. To purchase a Supplemental plan would not be recommended as an option as it would be the third payer behind the group plan and Medicare.

What is a Medicare HMO?

A Medicare HMO is an HMO that has contracted with the federal government under the Medicare+ Choice program to provide benefits to persons eligible for Medicare that choose to enroll in the HMO, instead of receiving their benefits and care through the traditional fee for service Medicare program. It is important to remember that both Medicare parts A and B are required if a Medicare HMO is desired. If a Medicare HMO is purchased, you will assign payment of benefits to the HMO.

Why do I need a Medicare Supplemental policy?

Although Medicare covers many health care costs, you still have to pay Medicare's coinsurance and deductibles. There also are many medical services that Medicare does not cover. A Medicare Supplemental policy provides reimbursement for the out-of-pocket costs that are not covered by Medicare and which are the beneficiary's share of health care costs. There are ten standard Medicare Supplemental policies, and each offers a different combination of benefits.

When can I enroll in a Medicare Supplemental Plan?

In New York State, when you are enrolled in Medicare, you can purchase a Medicare Supplemental policy at any time. You are guaranteed that you can buy a policy even if you are Medicare-eligible due to medical disability and are under age 65. You cannot be turned down or charged higher premiums because of poor health.

What effect does a "pre-existing condition" have on purchasing a Medicare Supplemental policy?

You are protected under New York State law from being denied a Medicare Supplemental policy because of a prior health problem.

  • If you purchase a policy when you become 65, you will not have any period of non-coverage due to a health condition.
  • If you purchase a Medicare Supplemental policy at an older age, you may have a six-month period of non-coverage for a particular pre-existing condition, after which your coverage will be total.
  • If you switch from one Medicare Supplemental plan to another, you have full coverage for all health problems, if you had the previous policy for at least six months.

Can I go to my usual doctor and hospital for care?

Yes. Unlike some types of health coverage that restrict where and from whom you can receive care, Medicare Supplemental policies generally pay the same supplemental benefits regardless of your choice of health care provider. If Medicare pays for a service, wherever provided, the standard Medicare Supplemental policy pays its regular share of benefits.

What paperwork will I receive from my Medicare Supplemental insurer?

A Medicare Supplemental insurance company is required to send you an Explanation of Benefits to prove that it paid its portion of your claims for your health benefits. Combined with the Explanation of Medicare Benefits, which you may receive from Medicare, you will have the total information about how your health care claim was processed.

What are the protections for consumers?

Medicare Supplemental insurance is regulated by New York State and Federal law. It must be clearly identified as Medicare supplement insurance. Insurance companies are not allowed to change the combination of benefits or the letter designation of any of the plans.

Insurance companies must give you at least 30 days to review a Medicare Supplemental policy. This is the "free-look" provision. If you decide you don't want the policy, send it back to the agent or company within 30 days and ask for a refund of all premiums you paid.

All standard Medicare Supplemental policies are guaranteed renewable. The insurance company cannot refuse to renew your policy unless you do not pay the premiums or you made material misrepresentation on the application.

You do not need more than one Medicare Supplemental policy. State law prohibits an insurance company or salesperson from selling you a second Medicare Supplemental policy that duplicates the coverage of one you already have, unless you plan to discontinue your current policy.

You can switch standard Medicare Supplemental policies whenever you need a different level of benefits. When your health needs are greater, you can buy a plan which better meets those needs. The new policy would replace the previous one. (You must sign a statement saying that you intend to replace your current policy and will not keep both policies.) DO NOT CANCEL AN EXISTING POLICY UNTIL THE NEW ONE IS IN FORCE. In addition, before switching policies, be sure to check into a POSSIBLE refund of premiums you already have paid. Most insurance companies WILL NOT REFUND premiums paid.

What if I have a complaint?

If you have a concern or a complaint about the marketing or sales of Medicare Supplemental and other types of insurance policies, contact the New York State Department of Insurance Consumer Services Hot Line at 1-800-342-3736 or in New York City call 212-480-6400.

Medicare Supplemental
Benefits

A

B

C

D

E

F*

G

H

I

J*
_______________________________________________________

Basic benefits

Part A: Inpatient hospital deductible

—

Part A: Skilled-nursing facility co-insurance

—

—

Part B: deductible

—

—

—

—

—

—

—

Foreign travel emergency

—

—

At-home
recovery

—

—

—

—

—

—

Part B: excess
charges

—

—

—

—

—

100%

80%

—

100%

100%

Preventive
care

—

—

—

—

—

—

—

—

Prescription
drugs

—

—

—

—

—

—

—

Note: Not all Supplemental Plans are offered in all States or offered by all carriers.
* Plans F and J have a high-deductible option.
A dash in a column means that benefit is not offered.

PLAN A (the basic policy) -- consists of these basic benefits:

  • Coverage for the Part A coinsurance amount ($210 per day, in 2003) for days 61 through 90 of hospital stays in each Medicare benefit period.
  • Coverage for the Part A coinsurance amount for days 91 through 150 of a hospital stay ($420 per day, in 2003) for each of Medicare's 60 lifetime reserve days that may be used once.
  • After all Medicare hospital benefits are exhausted, coverage for 100 percent of the Medicare Part A eligible hospital expenses. Coverage is limited to a maximum of 365 days of additional inpatient hospital care during the policyholder's lifetime. Policyholder may be responsible for payment when Medigap hospital benefits are exhausted.
  • Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood or equivalent quantities of packed red blood cells per year unless this blood is replaced.
  • Coverage for the coinsurance amount for Part B services (generally 20 percent of Medicare-approved amount) after $100 annual deductible is met.

PLAN B -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).

PLAN C -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003).
  • Coverage for the Medicare Part B deductible ($100 per calendar year, in 2003).
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deductible, subject to a lifetime maximum benefit of $50,000.

PLAN D -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003).
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deductible, subject to a lifetime maximum benefit of $50,000.
  • Coverage for at-home recovery. The at-home recovery benefit pays up to $1,600 per year for short-term, at home assistance with activities of daily living (like bathing, dressing, personal hygiene, etc.) for those recovering from an illness, injury or surgery.

PLAN E -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003).
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deductible, subject to a lifetime maximum benefit of $50,000.
  • Coverage for preventive medical care. The preventive medical care benefit pays up to $120 per year for things like a physical examination, serum cholesterol screening, hearing test, diabetes screenings, and thyroid function test.

PLAN F -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003).
  • Coverage for the Medicare Part B deductible ($100 per calendar year, in 2003).
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deductible, subject to a lifetime maximum benefit of $50,000.
  • Coverage for 100 percent of Medicare Part B excess charges. _*_

PLAN G -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003).
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deductible, subject to a lifetime maximum benefit of $50,000.
  • Coverage for 80 percent of Medicare Part B excess charges. _*_
  • Coverage for at-home recovery. The at-home recovery benefit pays up to $1,600 per year for short-term, at home assistance with activities of daily living (like bathing, dressing, personal hygiene, etc.) for those recovering from an illness, injury, or surgery.

PLAN H -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003)
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deductible, subject to a lifetime maximum benefit of $50,000.
  • Coverage for 50 percent of the cost of prescription drugs up to a maximum of $1,250 per year after the policyholder meets a $250 deductible per year (basic prescription drug benefit).

PLAN I -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003).
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deductible, subject to a lifetime maximum benefit of $50,000.
  • Coverage for 100 percent of Medicare Part B excess charges. _*_
  • Coverage for at-home recovery. The at-home recovery benefit pays up to $1,600 per year for short-term, at home assistance with activities of daily living (like bathing, dressing, personal hygiene, etc.) for those recovering from an illness, injury, or surgery.
  • Coverage for 50 percent of the cost of prescription drugs up to a maximum of $1,250 per year after you meet a $250 deductible per year (basic prescription drug benefit).


PLAN J -- includes the basic benefits plus:

  • Coverage for the Medicare Part A inpatient hospital deductible ($840 per benefit period, in 2003).
  • Coverage for the skilled nursing facility coinsurance amount ($97 per day, for days 21 through 100 per benefit period, in 2003).
  • Coverage for the Medicare Part B deductible ($100 per calendar year, in 2003).
  • 80 percent coverage for medically necessary emergency care in a foreign country, after a $250 deduction, subject to a lifetime maximum benefit of $50,000.
  • Coverage for 100 percent of Medicare Part B excess charges. _*_
  • Coverage for at-home recovery. The at-home recovery benefit pays up to $1,600 per year for short-term, at home assistance with activities of daily living (like bathing, dressing, personal hygiene, etc.) for those recovering from an illness, injury, or surgery.
  • Coverage for preventive medical care. The preventive medical care benefit pays up to $120 per year for things like a physical examination, serum cholesterol screening, hearing test, diabetes screening, and thyroid function test.
  • Coverage for 50 percent of the cost of prescription drugs up to a maximum of $3,000 per year after the policyholder meets a $250 per year deductible ("extended" prescription drug benefit).

* Excess Charge: The difference between a doctor's or other healthcare provider's actual charge (up to the amount of charge limitation set by Medicare or the state) and the Medicare-approved payment amount.

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