Due to the 2010 Medigap Modernization act which goes into effect on June 1st. 2010, there will be some changes regarding the current standardized Medicare Supplement Plans. These changes will not affect those who are already enrolled in a Medigap Plan prior to this date, and only applies to people enrolling on June 1st or after.
Medigap Plans E, H, I, and J are being eliminated by Medicare, however those who are currently enrolled in these plans will be allowed to remain in them with no changes. Two benefits that are also being eliminated are the At-Home Recovery benefit, as well as the Preventative Care benefit, as these were determined by Medicare to be completely underused by beneficiaries. Those who are enrolled in plans prior to June 1st. 2010 that contain either of these benefits will be allowed to continue using them.Other important changes include the addition of the Hospice benefit to all Medicare Supplement Plans, as it will now be a core benefit of all Medigap Plans.
The new Modernized Medicare Supplement Plans will also include two new plan letters that will likely be very attractive to those currently on a Medicare Advantage Plan. Those two plans are Medicare Supplement Plan M, and Medicare Supplement Plan N. Due to the rising costs of Medicare Advantage Plan premiums, and the growing number of physicians choosing to not participate in them, Medigap Plans M and N offer various cost sharing features that help in offering lower premiums for both compared to Plans such as Medicare Supplement Plan F or Plan G.
Medicare’s new Plan M offers unique cost sharing options that are particularly attractive to Medicare beneficiaries who are relatively healthy. Plan M offers to pay 50% of the Medicare Part A deductible, which is $1100 per benefit period in 2010. For example, if you are admitted to the hospital and you have a Medigap Plan M, you would need to pay half of the $1100 deductible, or $550. The current rules still apply to the Medicare Part A deductible, in that if you are admitted and leave for 60 days or more, and then need to return within the calendar year, you must pay this deductible again.
With a Medicare Supplement Plan M, you are also responsible for paying the Medicare Part B deductible, which is $155 for 2010. Beyond this deductible there are no doctor’s office co-pays and the 20% coinsurance will be paid by the plan.
Another new plan being introduced on June 1st. 2010 is Plan N. This plan also offers cost-sharing options to the beneficiary much like Medicare Supplement Plan M, however with Plan N they are in the form of co-pays.
If you are admitted to the hospital and have a Medicare Supplement Plan N, you are required to pay a $50 co-pay. For doctors visits there is a co-pay of up to $20 per visit, after you meet the Medicare Part B annual deductible ($155 in 2010). These co-pays allow for the premiums of Medigap Plan N to be lower than the current Medicare Supplement Plans available, also making it an outstanding choice for those who are coming off of a Medicare Advantage Plan (Whether the plan is leaving your area, or you are in the enrollment period and wish to make a change).
With lower premiums and cost sharing options such as co-pays and deductibles, Medicare Supplement Plans M and N should be an excellent option for people on Medicare, particularly those who do not mind paying portions of deductibles or co-pays.