- Section 1 Introduction
- Introduction
- Federal Government Administration
- Fundamentals of Medicare: State Responsibilities
- Fundamentals of Medicare: Participating Providers
- Voluntary and Involuntary Termination of Provider Agreement
- Disclosure of Health Insurance Information
- Privacy Act
- National Provider Identifier
- Legacy Provider Numbers/Provider Transaction Access Numbers (PTANs)
- Medicare Administrative Contractors
- Fundamentals of Medicare: Information References
- Acronyms
- Fundamentals of Medicare: Glossary of Terms
- Section 2 Medicare Basics
- The History of Medicare
- What Is the Medicare Program and How Is It Funded?
- Medicare Eligibility and Premiums
- The Social Security Administration and Medicare Enrollment
- The Medicare Card
- Medicare Part A
- Inpatient Hospital Care
- Skilled Nursing Facility Inpatient Care
- Home Health Care Benefit
- The Hospice Benefit
- Medicare Part B Medical Insurance
- Fundamentals of Medicare - Medicare Program Exclusions
- Medicare Advantage Organizations
- Medicare Secondary Payer
- Supplemental Insurance
- Coordination of Benefits Trading Partners
- Section 3 Fraud and Abuse
- Section 4 Getting Ready to Bill Medicare
Section 2: Medicare Basics
Supplemental Insurance
Table of Contents
Supplemental Insurance
In addition to their Medicare benefits, many beneficiaries purchase a supplemental insurance policy from a private insurance company in order to fill in the gaps in Medicare coverage. These supplemental plans can have a wide range of coverage, from additional inpatient days, to foreign hospital care, to prescription drugs. In addition, there are different types of supplemental plans, including plans given to beneficiaries as part of a retirement package, plans that were purchased independently by beneficiaries prior to 1992, and Medigap plans, which are standardized by the federal government. Since there are many different types of supplemental plans a beneficiary can have, it is important to be aware of the coverage(s) patients have and upon admission, to obtain information about any supplemental insurance a patient may have.
Note: A beneficiary is not required to have any plan to supplement their Medicare; instead, he/she can choose to independently pay for deductibles and coinsurance amounts on services he/she receives.
Medigap Plans
In 1992, the federal government developed a set of ten standardized plans, collectively called Medigap plans. With the exceptions of Massachusetts, Minnesota and Wisconsin, insurance companies in each state who offer supplemental plans to beneficiaries must offer one or more of the Medigap plans. Insurance companies offering plans in Massachusetts, Minnesota and Wisconsin are exempt from the legislation because they already had standardized plans in place that were similar or more comprehensive than the Medigap plans.
With the Medigap plans, called “Plan A” through “Plan J,” each plan has a different set of standardized benefits. Plan A offers the least amount of benefits, called the “basic benefit.” All of the other plans have the basic benefit plus additional benefits. Since the benefits are standardized, a beneficiary can compare different insurance companies’ prices on plans, because the coverage is going to be the same. For example, if two insurance companies in the same state both offer Medigap Plan C, they both have to offer the exact same coverage, but are allowed to price the plans as they wish.
Some companies offer Medicare Select Medigap plans. These plans have the same coverage as the ten standardized plans, but Select plans restrict the doctors and hospitals a beneficiary is allowed to receive services from. Since they are more restrictive, they are usually offered at a lower price than traditional Medigap plans.
Also, some companies offer a high-deductible option for Plans F and J. By imposing yearly deductibles that a beneficiary must pay before the Medigap plan pays anything, these policies often cost less than traditional Medigap plans.
Note: It is illegal for any insurance company to sell a Medigap policy to a beneficiary if they know the beneficiary is enrolled in a Medicare managed care plan or a private fee-for-service plan. For beneficiaries with Medicaid, an insurance company can only sell a Medigap policy to them in certain situations.
It is important to note that not all beneficiaries are eligible to purchase all of the Medigap plans, and not all insurance companies offer all of the plans. The cost for Medigap policies can be different for each beneficiary, depending on their age, gender, marital status, or whether the beneficiary is a non-smoker. In some circumstances, an insurance company is allowed to do medical underwriting on Medigap policies. All Medigap policies purchased after 1990 automatically renew each year, as long as the beneficiary has paid his/her premium.
For more information about Medigap plans, please contact your State Insurance Department. Also, CMS has published a comprehensive beneficiary guide called, “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.” Copies are available by calling 1-800-MEDICARE.
Medigap Plans A–N
The basic benefit, which is included in all Medigap plans, has three parts. The basic benefit covers:
- Part A coinsurance for days 31–60 and LTR days
- 365 extra (nonrenewing) days of hospital care after Medicare coverage ends
- Part B coinsurance
- The first three pints of blood each year (blood deductible)
The following table shows each plan with the general categories of coverage. For coverage details, please utilize the references listed above. Part B excess refers to the difference between the doctor’s actual charge and the Medicare-approved amount.
| Medigap Plan | General Categories of Coverage |
|---|---|
| Plan A |
|
| Plan B |
|
| Plan C |
|
| Plan D |
|
| Plan E**** |
|
| Plan F* |
|
| Plan G |
|
| Plan H**** |
|
| Plan I**** |
|
| Plan J**** |
|
| Plan K* |
|
| Plan L**** |
|
| Plan M**** |
|
| Plan N**** |
|
* Medigap plans F and J also have a high deductible option.
** Starting January 1, 2006, the beneficiary won’t be able to buy Medigap policies covering prescription drugs. However, if they buy a policy with prescription drug coverage before January 1, 2006, they will have to decide if they want to keep this coverage.
*** Medigap policies cover some preventive care that isn’t covered by Medicare.
**** These plans exist but are no longer sold. Some people may still have a Medigap policy they purchased before the plans were standardized.
Low-Income Beneficiaries
There are special programs that pay some or all of Medicare’s premiums and may also pay Medicare deductibles and coinsurance for certain people who are entitled to Medicare and have a low income. These special programs, funded through the Medicaid program, are called Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiaries (SLMB) and qualifying individual (QI-1). These are also referred to as Medicare savings programs.
A beneficiary must be enrolled in Medicare Part A, have income that is no higher than the income limit for each program, and have assets that do not exceed the asset limit. Assets can include bank accounts, stocks and bonds and cannot exceed $4,000 for an individual or $6,000 for a couple. Income limits change on a yearly basis and new limits are available by April 1 of each year. Certain states, Connecticut for example, have higher income and asset limits. Delaware has no asset limits for the Medicare Savings Program. For more information on these programs, contact your local SHIP.
Bonus: If a beneficiary enrolls in any of these Medicare savings programs, they will automatically be enrolled in Extra Help, a federal program that helps pay for the costs of the Medicare prescription drug plan.
Qualified Medicare Beneficiary Program
The QMB program pays for a beneficiary’s Medicare Part A and Part B monthly premiums, deductibles and coinsurance amounts. A beneficiary has to have income that is at or below 100 percent of the federal poverty level +$20* and has to meet the asset and eligibility guidelines. Note: If the beneficiary is enrolled in traditional Medicare, they must see Medicaid providers to get coverage for Medicare deductibles and coinsurance. If the beneficiary is enrolled in a Medicare HMO, they will have to pay their HMO premiums (if any) but they should not be charged any co-pays.
Specified Low-Income Medicare Beneficiaries Program
The SLMB program pays for a beneficiary’s monthly Part B premium. A beneficiary has to have income that is at least 100 percent but does not exceed 120 percent of the federal poverty level +$20*and has to meet the asset and eligibility guidelines.
Qualified Individual – 1 (QI-1) Program: Medicaid pays the Medicare Part B premium only. A beneficiary must have income that cannot exceed 135 percent of the federal poverty level.
Note: The Illinois Department of Public Aid will allow an additional $25 of monthly income for each individual, which is not included in the above amounts.
Qualified Disabled Working Individual Program
Lost Medicare Part A benefits due to return to work, but is eligible to enroll in and purchase Medicare Part A. The Qualified Disabled Working Individual (QDWI) Program (includes additional earned income disregards) can pay for the monthly Part A premium for those beneficiaries who have to pay a premium. A beneficiary has to have income that does not exceed 200 percent of the federal poverty level + $20*, has to meet the asset and eligibility guidelines, and cannot be otherwise eligible for Medicaid
For further information, contact SHIP at 800-548-9034.
*$20 = amount of the monthly supplemental security income (SSI) income disregard.
Revised 1/2021