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Medigap
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To supplement traditional
Medicare, private companies offer so-called "Medigap"
coverage. Federal and state governments closely regulate these
policies and the companies that offer them.
In most states, there are ten standard policies
insurance companies can offer. Of the ten, plan "A"
is the most basic and plan "J" offers the most benefits.
The ten standard plans can offer a "Medicare SELECT"
option that is usually cheaper, but limits patients' choice of
doctors. Under current law, once beneficiaries purchase a Medigap
policy, they cannot be prevented from renewing their coverage
as long as they keep paying their premium.
 Medigap
policies may help beneficiaries cover their share of health costs
that would only be partially paid for by Medicare. These policies
may also help pay for routine annual check-ups, prescription drugs
and other health care costs that Medicare does not cover.
The cost of Medigap coverage varies widely. Medicare
beneficiaries' premiums can depend on which insurance company
they choose, their age and where they live. Once someone signs
up with a plan, his or her premium can increase to reflect inflation
and rising health care costs. Some plans also charge more for
older beneficiaries.
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Medicare
+ Choice
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Instead of opting
for traditional Medicare, beneficiaries can receive their health
coverage through private plans knows as Medicare + Choice. These
plans help pay for medical expenses not covered by traditional
Medicare, but they are not available in all areas. Medicare +
Choice plans are required to cover everything included in traditional
Medicare, but their beneficiaries may have different costs and
restrictions.
These private plans can either be health maintenance
organizations (HMO), preferred provider organizations (PPO) or
fee-for-service plans. Unlike patients in traditional Medicare,
who can go to almost any doctor and have the appointment covered,
those in Medicare + Choice HMOs usually can only go to doctors
within their plan. Those in PPOs can pay more to see a doctor
outside of the plan's network. Fee-for-service plans allow their
beneficiaries to see any doctor that accepts the plan's payment.
When the government created Medicare + Choice
in 1997, it was supposed to encourage Medicare beneficiaries to
get their health coverage from private plans. However, changes
made the same year to the way the federal government reimburses
private plans has caused insurers to drop out of the program.
In May 2003,
the Rand Corporation released a study that reported Medicare +
Choice is most popular with beneficiaries who cannot afford Medigap
coverage.
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Medicare
+ Choice
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Instead of opting
for traditional Medicare, beneficiaries can receive their health
coverage through private plans knows as Medicare + Choice. These
plans help pay for medical expenses not covered by traditional
Medicare, but they are not available in all areas. Medicare +
Choice plans are required to cover everything included in traditional
Medicare, but their beneficiaries may have different costs and
restrictions.
These private plans can either be health maintenance
organizations (HMO), preferred provider organizations (PPO) or
fee-for-service plans. Unlike patients in traditional Medicare,
who can go to almost any doctor and have the appointment covered,
those in Medicare + Choice HMOs usually can only go to doctors
within their plan. Those in PPOs can pay more to see a doctor
outside of the plan's network. Fee-for-service plans allow their
beneficiaries to see any doctor that accepts the plan's payment.
When the government created Medicare + Choice
in 1997, it was supposed to encourage Medicare beneficiaries to
get their health coverage from private plans. However, changes
made the same year to the way the federal government reimburses
private plans has caused insurers to drop out of the program.
In May 2003, the Rand Corporation released a study
that reported Medicare + Choice is most popular with beneficiaries
who cannot afford Medigap coverage.
-- By Karyn Schwartz, Online NewsHour
October 2003
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