Medicare: Bridging the Gaps

Medicare participants are often shocked to see how much they owe when they receive a hospital or doctor bill. To help them pay for what Medicare doesn’t, many choose to buy private supplemental insurance known as Medigap. This Health Pages Special Report will help you understand Medigap insurance, choose the policy that best suits your needs and compare the cost of the plans available in your state.

Medigap insurance is often a necessity for people whose out-of-pocket medical expenses can run into the thousands every year. More than half of all people covered by Medicare have Medigap insurance, and most of them have suffered dramatic rate hikes within the past year. Some have seen their premiums increase by over 25 percent in one year.

Now, more than ever, being a savvy shopper is a necessity. Fortunately, federal regulations make it easier to compare Medigap policies than any other type of insurance. The challenge is getting all the facts so you can compare the plans available in your area and choose the one that best suits your needs.

Massachusetts, Minnesota and Wisconsin are the only states not required to follow these Medigap guidelines. This is because they standardized Medigap insurance before the federal legislation was enacted so they were not required to change their Medigap plans. If you live in any of these states, contact your state insurance department to find out what Medigap coverage is available. Massachusetts: 617-521-7777 Minnesota: 612-296-4026 Wiconsin: 608-266-0103

Since federal regulations mandate that all Medigap policies sold offer a standardized set of benefits, cost and stability are the most important factors to consider when deciding what company to buy from. To assist you in this effort, Health Pages has collected Medigap information from around the country–including premiums. It may surprise you to see how widely prices vary, sometimes by as much as 100% for the same coverage. When you look at the chart for your state, you’ll be able to look at all the prices available for each plan at a glance. No insurance broker will provide you with this information. But Health Pages is an independent voice that can give consumers the facts without prejudice. Our exclusive Medigap comparison charts even rank the companies by cost and tell you how financially stable each company is.

In addition, Medigap Made Easy explains everything you need to know to make an informed decision, from what Medicare doesn’t cover to each type of Medigap plan available to fill those gaps, as well as a guide to choosing the plan that best suits your individual needs. Together, this article and the Medigap comparison charts will make choosing a Medigap policy one of the most informed decisions you have ever made.

Who Qualifies for Medicare?

You are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment (payroll taxes were deducted from your paycheck), you are 65 or older, and you are a United States citizen or permanent resident. Younger people may also qualify for coverage if they have a disability or chronic kidney disease. Most senior citizens need to apply for Medicare three months before turning 65 to ensure coverage. The Social Security Administration, handles enrollment and provides information. Call their Hotline at 800-772-1213. Those who do not enroll in Medicare Part B during the initial seven-month period (three months before turning 65 plus four months after), have to wait until the next general enrollment period, which is January 1 to March 31 of each year.

What Does Medicare Cover?

Medicare, is divided into two parts (prices given are for 1997–they go up every year):

1) Medicare Part A (hospital insurance), is available free (you pay no premium) to anyone 65 or older who qualifies for Social Security benefits. It covers part of the costs of inpatient hospital care, limited care received in a Medicare-certified skilled nursing facility, home health care and hospice care.

Reimbursement is based on benefit periods. A benefit period starts when you first enter a hospital or skilled nursing facility and ends when you have been out for 60 consecutive days. There is no limit to the number of benefit periods covered in a year.

From day 1 – day 60 of each benefit period, Medicare pays for all covered services except for a $760 deductible (the amount you have to pay yourself). You can only be charged the deductible for your first admission in each benefit period.

From day 61- day 90: During each benefit period, Medicare pays for all covered services above the $190 a day deductible which comes out of your own pocket.

After day 91: Medicare includes an extra 60 hospital reserve days, which you can use if you are ever hospitalized for more than 90 consecutive days. The federal program pays for all covered services above $380 a day for each reserve day you use. That means you are responsible for $380 a day. Once all of your reserve days are used, you must pay the full cost of each day you remain in the hospital. Unlike your 90 hospital days in each benefit period, reserve days are not renewable. So if you use 10 reserve days during your first hospital stay, you only have 50 reserve days available for future hospitalizations.

Medicare Part A: Hospital Insurance Covered Services
(Prices are for 1996)

Services	Benefit	Medicare Pays	You Pay
Hospitalization. Semiprivate room and board, general nursing and other hospital services and supplies. Coverage based on benefit periods.	First 60 days	All but $760	$760
	61st to 90th day	All but $190 a day	$190 a day
	91st to 150th day*	All but $380 a day	$380 a day
	Beyond 150 days	Nothing	All costs
Skilled Nursing Facility Care. Semiprivate room and board, skilled nursing and rehabilitative services and other services and supplies.** Coverage based on benefit periods.	First 20 days	100% of approved amount	Nothing
	Additional 80 days	All but $95 a day	Up to $95 a day
	Beyond 100 days	Nothing	All costs
Home Health Care. Part-time or intermittent skilled care, home health aide services, durable medical equipment and supplies and other services.	Unlimited as long as you meet Medicare requirements for home health benefits.	100% of approved amount; 80% of approved amount for durable medical equipment	Nothing for services; 20% of approved amount for durable medical equipment.
Hospice Care. Pain relief, symptom management and support services of the mentally ill.	For as long as doctor certifies need.	All but limited costs for outpatient drugs and inpatient respite care.	Limited cost sharing for outpatient drugs and inpatient respite care.
Blood. When furnished by a hospital or skilled nursing home facility during a covered day.	Unlimited during a benefit period if medically necessary.	All but first 3 pints per calendar year.	For first 3 pints.***

* 60 reserve days may be used only once.
** Neither Medicare nor Medigap insurance will pay for most nursing home care.
*** To the extent the three pints of blood are paid for or replaced under Medicare Part A or Part B during the calendar year, they do not have to be paid for or replaced under the other part.

2) Medicare Part B (medical insurance), charges a premium of $43.80 a month, which can be either billed quarterly or deducted directly from your monthly Social Security check. You must also pay an annual deductible of $100 and 20 percent of the amount Medicare approves for each of your medical bills.

It covers:

• Doctor’s visits and laboratory tests
• Outpatient hospital services
• Limited coverage for outpatient therapies (speech and physical therapy)
• Limited coverage for outpatient mental health services
• Medical equipment
• Ambulance service
• Mammography screenings every other year
• Limited coverage for dental surgery and services of a chiropractor, podiatrist and optometrist

Medicare Part B: Medical Insurance Covered Services
(Prices are for 1996)

Services	Benefit	Medicare Pays	You Pay
Medical Expenses. Physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment and other services.	Unlimited if medically necessary.	80% of approved amount (after $100 deductible). 50% of approved amount for most outpatient mental health services.	$100 deductible,* plus 20% of approved amount and limited charges above approved amount.** 50% for most mental health services.
Clinical Laboratory Services. Blood tests, urinalysis, and more.	Unlimited if medically necessary.	Generally 100% of approved amount.	Nothing for services.
Home Health Care. Part-time or intermittent skilled care, home health aide services, durable medical equipment and supplies and other services.	Unlimited as long as you meet Medicare requirements for home health benefits.	100% of approved amount; 80% of approved amount for durable medical equipment.	Nothing for services; 20% of approved amount for durable medical equipment.
Outpatient Hospital Treatment. Services for the diagnosis or treatment of an illness or injury.	Unlimited if medically necessary.	Medicare payment to hospital based on hospital costs.	20% of billed amount (after $100 deductible).*
Blood.	Unlimited if medically necessary.	80% of approved amount (after $100 deductible and starting with 4th pint).	First 3 pints plus 20% of approved amount for additional pints (after $100 deductible).***

* Once you have paid the $100 deductible for Part B covered services, you do not have to pay it again for other covered services you may receive during the rest of the year.
** Federal law limits charges for physician services.
*** To the extent the three pints of blood are paid for or replaced under Medicare Part A or Part B during the calendar year, they do not have to be paid for or replaced under the other part.

What Won’t Medicare Cover?

There are many health care services Medicare doesn’t cover, including:

• Items or services not considered medically reasonable and necessary
• Long-term nursing home stays
• Custodial care in a nursing home
• Private duty nurses at home
• Homemaker services
• Routine dental services and dentures
• Routine physicals
• Prescription medications
• Preventive care
• Vision exams and eyeglasses
• Hearing tests and hearing aids
• Routine foot care
• Physician charges above Medicare’s approved amount
• Care received outside the U.S.

How Can I Pay For All That?

If you feel that your particular health care needs require more than what Medicare offers, there are several ways to get additional coverage. About half of all people covered by Medicare purchase a Medigap policy, a private supplemental insurance designed to help fill the gaps in Medicare and limit your out-of-pocket health care expenses. The more a Medigap policy covers, the more expensive it is. This article will help you decide which policy is best for you. Health Pages’ local listings show what companies offer Medigap insurance in your state and compare and rank the cost of each plan.

Medigap Open Enrollment Period

The best time to purchase a Medigap policy is during your open enrollment. This is a period of six months from the date you turn 65 and enroll in Medicare Part B during which you can buy any Medigap insurance policy regardless of your health. During this period no company can deny, put conditions on, or discriminate in the pricing of the policy you want because of your medical history, health status or claims experience.

The best time to purchase a Medigap policy is either when you turn 65 and enroll in Medicare Part B or during yearly general enrollment periods (January to March) when it is also possible to sign up for Medicare Part B. At these times, you can buy any Medigap insurance policy and no company can deny, put conditions on, or increase the price of the policy you want because of your health status or prior medical insurance claims.

However, if you try to get a Medigap policy after the designated periods for Medicare Part B enrollment, companies who sell Medigap policies have the right to review your medical records and deny you coverage if you had a significant amount of medical treatment or a condition that is likely to require extensive care in the near future. Most insurance companies require such initial eligibility reviews–sometimes called medical underwriting–for plans that provide the most extensive benefits, such as those that offer prescription drug coverage.

But some companies do offer guaranteed issue policies (most notably the American Association of Retired Persons (AARP)-Prudential Medigap policies available throughout the country), which means the company will sell you a policy regardless of your health status. In addition, a few states, such as New York, have passed laws guaranteeing additional periods during which a company cannot deny a person coverage. New York is the only state that mandates open enrollment year round.

What Does Medigap Cover?

As of June 1992, federal law mandates that all new Medigap policies must match one of ten standardized benefit plans which are labeled A through J. No matter what company you buy from, the coverage each of the ten plans offers is identical from company to company. As you shop for a Medigap policy, keep in mind that each company’s plans are alike, so they are only competing for your business on the basis of service, reliability and price.

Below are descriptions of the benefits offered by Medigap policies:

Basic Benefits (Included in All 10 Plans)

• Hospitalization. Covers the $190 Part A per day co-payment for the 61st to 90th days and the $380 per day co-payment from the 91st to 150th day (reserve days). All Medigap plans also pay 100 percent of up to 365 additional days stay in a hospital throughout the rest of the insured’s life.
• Medical expenses. Covers the 20 percent co-payment for the Medicare-allowed-amount for physician charges.
• Blood. Any Medigap policy pays for the first three pints of blood for transfusion each year.

Additional Medicare Part A Coinsurance

• Hospital deductible. Covers $760 for each hospital stay during each new benefit period (offered by plans B – J) .
• Skilled nursing home co-payment. Covers $95 per day for days 21 to 100 of skilled care in a nursing home per benefit period (offered by plans C – J).

Additional Medicare Part B Coinsurance

• Deductible. Medigap policies C, F, and J will pay the first $100 of covered physician services per calendar year.
• Excess doctor charges. Certain policies will cover the difference between a doctor’s charges and the amount approved by Medicare (plans F, I and J cover 100 percent while plan G covers 80 percent of it).

Additional Coinsurance

• Foreign travel emergency. Covers 80 percent of emergency care in a foreign country–with a $50,000 lifetime maximum–after a $250 per calendar year deductible (offered by plans C – J).
• At-home recovery. Pays up to $40 per visit, to a maximum of $1,600 per year, for short term, at-home assistance with activities of daily living during recovery from an illness, injury or surgery that qualifies a patient for skilled home health care under Medicare guidelines (offered by plans D, G, I and J).
• Preventive screening. Plans E and J cover $120 per year for health care screenings ordered by a physician but not covered by Medicare, such as a physical examination, cholesterol test and diabetes screening.
• Outpatient prescription drugs. Some plans cover 50 percent of the cost for drugs prescribed by a physician After a $250 per year deductible. Plans H and I will pay up to a maximum annual benefit of $1,250 and Plan J pays up to $3,000.

NOTE: Neither Medicare nor Medigap covers long-term home care or nursing home expenses. Seniors who need that kind of protection can look into a separate long-term care insurance policy.

Medigap Coverage Options:

BENEFITS	A	B	C	D	E	F	G	H	I	J
Basic Benefits. Hospitalization. Covers the $190 Part A per day co-payment for the 61st to 90th days and the $380 per day co-payment from the 91st to 150th day (reserve days). All Medigap plans also pay 100 percent of up to 365 additional days stay in a hospital throughout the rest of the insured’s life; Medical expenses. Covers the 20 percent co-payment for the Medicare-allowed-amount for physician charges; Blood. Pays for the first three pints of blood for transfusion each year.	*	*	*	*	*	*	*	*	*	*
Hospital Deductible. Covers $760 for each hospital stay during each new benefit period.		*	*	*	*	*	*	*	*	*
Skilled Nursing Home. Covers $95 per day for days 21 to 100 of skilled care in a nursing home per benefit period.			*	*	*	*	*	*	*	*
Doctor Deductible. Pays the first $100 of covered physician services per calendar year			*			*				*
Excess Doctor Charges. Covers the difference between a doctor’s charges and the amount approved by Medicare						100%	80%		100%	100%
Foreign Travel. Covers 80 percent of emergency care in a foreign country–with a $50,000 lifetime maximum–after a $250 per calendar year deductible.			*	*	*	*	*	*	*	*
At-Home Recovery. Pays up to $40 per visit, to a maximum of $1,600 per year, for short term, at-home assistance with activities of daily living during recovery from an illness, injury or surgery that qualifies a patient for skilled home health care under Medicare guidelines.				*			*		*	*
Preventive Screening. Covers $120 per year for health care screenings ordered by a physician but not covered by Medicare, such as a physical examination, cholesterol test and diabetes screening.					*					*
Prescription Drugs. Covers 50 percent of the cost for drugs prescribed by a physician after a $250 per year deductible.								$1,250 limit per year	$1,250 limit per year	$3,000 limit per year

Considerations for Making a Choice

If you are thinking about buying Medicare supplemental insurance, there are several factors you need to consider beyond just what will be covered. Here are some tips on how to go about making your choice:

• Your Health. Your health status not only today but in the future are important considerations when deciding what kind of coverage you need.
• Pre-Existing Condition Exclusion. Many policies contain a provision excluding benefits for any illness or medical condition that you’ve received treatment for within a given period before your coverage begins. Six months is a typical exclusion period. Usually, the shorter the exclusion period, the higher the premium. However, if you have a serious medical condition which may require costly medical treatment at any time and you have been treated for it recently, consider a policy with a short exclusion period or none at all.
• Your Finances. It is also important for you to determine how much you can afford to spend on a Medigap policy.
• Premium Increases. It is one thing to find insurance coverage you can afford today. It may be quite another to find a policy that you can still afford in later years when your income and assets have decreased and the policy premium has increased–as it is sure to do. In choosing a Medigap policy, be sure you know how the policy premiums will rise over time.
• Be Aware of Maximum Benefits. Most policies have some type of limit on benefits. They may restrict either the dollar amount that will be paid for treatment of a condition or the number of days of care for which payment will be made.
• Know Who You Are Dealing With. A company must meet certain qualifications to do business in your state. You should check with your state insurance department to make sure that any company you are considering is licensed there. This is for your protection. Agents also must be licensed by your state and may be required to carry proof of licensure showing their name and the company they represent. If the agent cannot verify that he or she is licensed, do not buy from that person. A business card is not a license.
• If You Decide To Buy, Complete the Application Carefully. Do not believe an insurance agent who says your medical history on an application is not important. Some companies ask for detailed medical information. If you leave out any of the medical information requested, coverage could be refused for a period of time for any medical condition you neglected to mention. The company also could deny a claim for treatment of an undisclosed condition and/or cancel your policy.
• Don’t Buy More Policies Than You Need. Duplicate coverage can be expensive and generally is unnecessary. A single comprehensive policy is better than several policies with overlapping or duplicate coverage. Federal law prohibits an insurer from selling you a second Medigap policy unless you state in writing that you intend to cancel the first policy after the replacement policy goes into effect.

For Your Protection: Know the Law

A few years ago, choosing a Medigap policy meant wading through a mish-mash of hard-to-understand benefits and conditions. Unscrupulous agents were able to exploit many elderly people by convincing them that they needed two or three policies to be safe. And even after buying several of them, people were often left with large gaps in their coverage.

To help protect the elderly against these practices, the federal government standardized the Medigap system in July of 1992 by limiting the policies insurance companies could offer to 10 plans with pre-determined benefits, labeled A through J. The plans cover specific expenses either not covered or not fully covered by Medicare, with A being the most basic policy and J the most comprehensive and most expensive policy.

States do have the right to customize the regulation, as long as they keep to these standards:

• States can limit the number of plans a company can offer in that state. For example, Delaware does not permit the sale of Plans C, F, G and H and Vermont prohibits the sale of Plans F, G, H and I.
• Neither the state nor the insurance company is permitted to change what each plan covers nor the letters used to identify any of the plans.
• Each state must make Plan A available and any company that sells Medigap insurance must offer it.
• Minnesota, Massachusetts and Wisconsin are the only states not required to follow these Medigap guidelines. This is because they standardized Medigap insurance before the federal legislation was enacted. Therefore, they were not required to change their Medigap plans. If you live in Minnesota, Massachusetts or Wisconsin, contact your state insurance department to find out what Medigap coverage is available. (Health Pages will soon have this information available as well).

In addition, several other laws are in place for your protection. The best way to ensure you are not exploited is to know what those laws are. Here is a quick reference to the most important ones:

• Open enrollment. State and federal laws guarantee that for a period of 6 months from the date you are at least 65 years old and enrolled in Medicare Part B, you have the right to buy the Medigap policy of your choice regardless of your health. Until November 1994, disabled Medicare members were not eligible for Medigap open enrollment when they turned 65. The law has been changed. Now, all insurance companies must accept a disabled Medicare recipient regardless of health status during that time.
• Benefits in writing. The insurance company should deliver a policy within 30 days. If it does not, contact the company and obtain in writing the reason for the delay. If 60 days go by without a response, contact your state insurance department.
• Free-Look Provision. Insurance companies must allow you at least 30 days to review a Medigap policy after it has been issued. If not completely satisfied, you may return the policy within the 30-day “free look” period and receive a full refund of premiums paid.
• Changing policies. When changing policies, the replacing insurer must waive any time periods that apply to pre-existing conditions and waiting periods for similar benefits if such periods were met under the original policy. If the new policy offers any benefits not covered by the old policy however, a pre-existing condition waiting period of up to six months may be applied to that benefit.
• Just one policy. An insurance company is prohibited from selling you a second Medigap policy unless you have stated in writing that you will terminate your existing policy. However, make sure you are happy with the new policy before you cancel the first.
• Guaranteed renewable. All policies sold after November 1990 must be guaranteed renewable. That means the company cannot cancel or refuse to renew a policy for any reason other than misrepresentation or nonpayment of premiums by the buyer. In other words, if your health suddenly worsens, the company cannot discontinue your coverage.
• Medicaid recipients. If you qualify for Medicaid, you cannot be sold a Medigap policy unless Medicaid covers your premium. Also, if you lose entitlement to Medicaid, you must be allowed to resume under your old Medigap policy without a new application.
• Doctor charges. As of 1993, doctors cannot charge Medicare recipients more than 15 percent above the amount allowed by Medicare. For example, if Medicare pays $100 for a procedure, a doctor who does not accept Medicare assignment cannot charge you more than $115.
• Non-standard plans. It is illegal for anyone to sell you a Medigap policy that does not conform to Medigap standardization requirements. This includes a “retainer agreement” that your doctor may offer you under which he or she provides certain non-Medicare-covered services and waives the Medicare co-payment and deductible amounts. If a doctor refuses to see you as a Medicare patient unless you pay him or her an annual fee and sign one of these agreements, you should register a complaint with federal authorities by calling 800-638-6833.
• Prohibited marketing practices. It is illegal for a company or agent to use high pressure tactics to force or frighten you into buying a Medigap policy, or to make false or misleading comparisons to get you to switch from one company to another. Additionally, it is illegal for an individual or company to use the names or emblems of any government agency (such as the Social Security Administration or the Health Care Financing Administration) to imply that the product is either endorsed or is being sold by the U.S. government.

If you feel your rights have been violated, call your state Department of Insurance. Check local phone number

Other Medicare Coverage Options

If after considering your medical needs and income you decide that you need more insurance, there are a variety of options available to help pay for medical expenses, services and supplies that Medicare covers only partially or not at all. The basic types of coverage include private insurance and state aid. Here is an outline of these options.

Private Insurance Options:

1. Medigap insurance is the most popular option. About half of all Medicare beneficiaries buy it because it is specifically designed to supplement Medicare’s benefits, is regulated by federal and state law and must be clearly identified as Medicare supplement insurance. It provides specific benefits that help fill the gaps in Medicare coverage. Other kinds of insurance may help you with out-of-pocket health care costs but they do not qualify as Medigap plans.

2. Medicare SELECT. Another Medicare supplement health insurance called “Medicare SELECT” is now permitted to be sold by insurance companies and HMOs. Medicare SELECT is the same as standard Medigap insurance in nearly all respects. If you buy a Medicare SELECT policy, you are buying one of the 10 standard Medigap plans. The only difference between Medicare SELECT and standard Medigap insurance is that each insurer has specific doctors and hospitals that you must use (except in an emergency) to receive full benefits. Medicare SELECT policies generally have lower premiums in comparison to other Medigap policies because of this requirement.

When you use a doctor or hospital on the insurer’s list of “preferred providers,” Medicare will pay its share of the approved charges and the insurer will pay or provide the full supplemental benefits provided for in the policy. In general, Medicare SELECT policies deny payment or pay less than the full benefit if you go outside the network for non-emergency services. Medicare, however, will still pay its share of approved charges regardless of the provider you choose.

Congress designed Medicare SELECT as an experimental program and approved its availability in the designated states (Alabama, Arizona, California, Florida, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Missouri, North Dakota, Ohio, Texas, Washington and Wisconsin) through June 30, 1995. The program was then extended until 1988 and expanded to include all 50 states. Even if Congress decides not to continue the Medicare SELECT program, insurers will be required to continue honoring all existing SELECT policies. You would also be able to switch to any other Medigap policy offered by the company regardless of your health status.

3. Managed care plans can enter into a contract or agreement with the Health Care Financing Administration (HCFA) to provide Medicare-covered services to enrolled Medicare beneficiaries. If you enroll in one of these plans, HCFA will pay the plan a monthly premium. HCFA’s payment to the plan represents Medicare’s share of the cost of the services you receive. You will not have to pay the regular Medicare deductible and co-payment for Medicare-covered services provided by the plan. Instead, the plan is permitted to charge you a monthly premium, and/or nominal co-payments as services are used. Usually there are no other charges by the plan no matter how many times you visit the doctor, are hospitalized, or use other covered services. You must, however, continue to pay the Medicare Part B monthly premium.

4. Continuation of a group health insurance policy. When they reach 65 many people still have private insurance through their or their spouse’s current employer or union membership. If you have such coverage, find out if it can be continued after retirement. Check the price and the benefits, including benefits for your spouse, and decide if it will adequately meet your needs.

5. Nursing home and long-term care insurance are available to par for custodial care in a nursing home, which neither Medicare nor Medigap cover. Some of these policies also cover at-home care, and others are available to pay for care in a skilled nursing facility (SNF) even if Medicare benefits are unavailable. If you buy a policy, make sure it either does not duplicate skilled nursing facility coverage provided by any Medigap policy, managed care plan, or other coverage you have. For more information about long-term care insurance, request a copy of A Shopper’s Guide to Long-Term Care Insurance from either your state insurance department or the National Association of Insurance Commissioners, 120 W. 12th Street, Suite 1100, Kansas City, MO 64105-1925. You may also obtain a copy of the Guide to Choosing a Nursing Home by writing to Medicare Publications, Health Care Financing Administration, 6325 Security Boulevard, Baltimore, MD 21207.

6. Hospital indemnity coverage is insurance that pays a fixed cash amount for each day you are hospitalized up to a designated number of days. Some coverage may have added benefits such as surgical benefits or skilled nursing home confinement benefits. Some policies have a maximum number of days or a maximum payment amount.

7. Specified disease insurance, which is not available in some states, provides benefits for only a single disease, such as cancer, or a group of specified diseases. The value of such coverage depends on the chance you will get the specific disease or diseases covered. Benefits are usually limited to payment of a fixed amount for each type of treatment. Remember, Medicare and any Medigap policy you have will very likely cover costs associated with any of these specified diseases you may contract.

State Aid Options:

1. If you are eligible for full Medicaid benefits, you probably do not need more insurance. Medicaid is a joint federal and state program that provides medical assistance for certain individuals with low incomes and limited assets. While coverage and eligibility vary from state to state, most of your health care costs would be covered if you qualified for both Medicare and Medicaid. In addition to standard hospital and medical coverage, some states provide Medicaid recipients with extra benefits such as nursing home care and outpatient prescription drugs.

Besides the standard Medicaid program, there are two other programs available through state Medicaid offices that are designed specifically to help certain low-income Medicare beneficiaries meet their health care costs. One is called the Qualified Medicare Beneficiary (QMB) program and the other is called the Specified Low-Income Medicare Beneficiary (SLMB) program. While they do not necessarily eliminate the need for private insurance to supplement your Medicare benefits, they could save you hundreds of dollars each year in health care costs if you qualify for assistance.

The QMB program pays Medicare’s premiums, deductibles and co-payment amounts for certain elderly and disabled persons who are entitled to Medicare Part A, whose annual income is at or below the national poverty level, and whose savings and other resources are very limited. The QMB program thus functions like a Medigap policy and more because it also pays your Part B premium.

To qualify for QMB, your financial resources, such as bank accounts, stocks, and bonds, cannot exceed $4,000 for one person or $6,000 for a couple, and your monthly income (in 1996) must be less than:

All states except Alaska and Hawaii:	$665 (individual)	$884 (couple)
Alaska:	$825 (individual)	$1,099 (couple)
Hawaii:	$763 (individual)	$1,014 (couple)

The SLMB program is for persons entitled to Medicare Part A whose incomes are slightly higher than the national poverty level. If you qualify for assistance under the SLMB program, the state will pay your Medicare Part B premium. You will be responsible for Medicare’s deductibles, co-payment and other related charges. To qualify, your income cannot exceed the national poverty level by more than 20 percent. The SLMB monthly income limits in 1996 are:

All states except Alaska and Hawaii:	$794 (individual)	$1,057 (couple)
Alaska:	$986 (individual)	$1,314 (couple)
Hawaii:	$912 (individual)	$1,213 (couple)

(Contact your state or local Medicaid or social service office if you think you qualify for full Medicaid benefits, or for either the QMB or SLMB program. If you cannot find the number in the telephone directory, call 1-800-638-6833 for assistance.)

NOTE: If you are entitled to both Medicare and regular Medicaid benefits, an insurance company cannot sell you a Medigap policy unless the state pays the premiums for you. If you qualify for QMB assistance, an insurer may not sell you a Medigap policy unless it includes coverage for prescription drugs. But, if you qualify for the SLMB program, there are no special restrictions on selling you a Medigap policy other than the restrictions that apply to all Medigap sales.

2. Another way to limit your health care costs is to go to a federally qualified health center (FQHC) for the type of care generally provided in a doctor’s office. Medicare pays for some health services that are not otherwise covered (such as routine physical examinations, screening and diagnostic tests for the detection of vision and hearing problems, as well as other medical conditions, and administration of certain vaccines for immunization against influenza and other diseases) when they are provided by a FQHC. These facilities are typically community health centers, Indian health clinics, migrant health centers and health centers for the homeless. They are generally located in inner-city and rural areas.

When these services are furnished at an FQHC, the $100 annual Part B deductible does not apply. However, if other services are provided, such as X-rays or screening mammograms, the FQHC may bill the Medicare carrier. In that case, you would be responsible for any unmet portion of the Part B annual deductible of $100.

While the Part B, 20 percent co-payment applies to all FQHC services, Public Health Service guidelines allow FQHCs to waive it in some instances. Any Medicare beneficiary may go to an FQHC for health care services. To find out whether one of these centers serves your area, call 1-800-638-6833.

For More Information

National Resources

The Health Care Financing Administration, the federal agency that manages the Medicare program, offers a variety of booklets on the subject, including a 37 page Guide to Health Insurance for People on Medicare (#605A). For your free copy, write to:
S. James Consumer Information Center-4C
P.O. Box 100, Pueblo, CO 81002

The Eldercare Locator is a public service of the Administration on Aging, U.S. Department of Health and Human Services and is administered by the National Association of Area Agencies on Aging and the National Association of State Units on Aging. It is a nationwide, directory assistance service designed to help older persons and caregivers locate local support resources for aging Americans. Anyone can call the Eldercare Locator on the toll-free number, Monday through Friday, 9 a.m. to 11 p.m., Eastern Time.
800-677-1116

The American Association of Retired Persons (AARP) offers a variety of free publications explaining Medicare and Medigap, as well as long-term care insurance and other health care options. To receive them, call:
800-441-AARP (2277)

State Departments of Insurance

Each state has a Department of Insurance which licenses and monitors insurance companies. If you have a complaint about a company or questions about insurance laws in your state, call your state’s office. (Click State Insurance Departments for the number to call in your state.)