Quick Links

Plan C Explained

Plan F Explained

Why No Plans E, H, I, and J

When You Can Change Your Medicare Supplement Plan

Are You Eligible For A Refund?

What To Do With That Stack of Stuff

Benefits of a Medicare Supplement Plan

Introduction

This page lists the benefits of a Medicare supplement plan.

Basic Benefits

1) Part A coinsurance. The Medicare supplement will pay the $400 per day coinsurance for days 61-90 of a hospital stay. The Medicare supplement will pay the $800 per day coinsurance for the 60 lifetime reserve days. The Medicare supplement will pay for 365 additional days of hospitalization after Medicare hospitalization benefits are exhausted.

2) Medical expenses Part B: The Part B coinsurance is generally 20% of Medicare approved expenses. This includes the coinsurance for outpatient services and surgery. Plans K, L, and N require the Medicare beneficiary to pay a portion for the Part B coinsurance. ***Details below.

3) Blood: The first three pints of blood.

4) Hospice: The Medicare supplement pays the hospice coinsurance and the copay for hospice drugs.

Skilled Nursing Facility coinsurance

1) Medicare pays 100% for the first 20 days for an approved stay for skilled nursing facility care.

2) For days 21-100 Medicare will pay for an approved stay. There is a $200 per day coinsurance that the Medicare supplement pays. ***See below for Plans K and L.

Part “A” Deductible

1) For 2023, the Medicare Part “A” deductible is $1,600 per hospital benefit period. The benefit period is for 60 days and begins after one’s discharge. The Medicare supplement could pay this benefit more than one time per year. ***See below for Plans K and L

Part “B” Deductible

1) The Medicare Part “B” deductible is an annual $226 in 2023.

Part “B” Excess (100%)

1) In general, if a Medicare Part “B” provider charges an excess above the Medicare approved amount, this benefit will pay that amount. Physicians may charge a maximum of 115% of the Medicare approved amount. These are known as non-participating physicians or physicians that do not accept Medicare assignment or assigned rates.

2) There could potentially be excess charges for an ambulance or durable medical equipment.

Foreign Travel Emergency

1) In general, Medicare does not pay in foreign countries. One will pay the first $250 for Medical services. After that, the Medicare supplement will pay 80%, and the insured will have a 20% coinsurance. Usually one must pay his/her bill upfront and then bring the bills back to submit a claim.

Out-of-pocket limit

1) For Plan K there is a maximum annual out-of-pocket limit of $6,620. Plan K will pay 100% after that limit is reached.

2) For Plan L there is a maximum annual out-of-pocket limit of $3,310. Plan L will pay 100% after that limit is reached.

High-deductible Plan F and G

1) High-deductible Plan F or G pays the same benefits as Plan F or G after one has paid a calendar year deductible of $2,490. This deductible is for what the Medicare supplement would have paid. Medicare still pays its part when one has high-deductible Plan F or G. After one has met the deductible, then the plan pays just like a regular Plan F or G.

***Details for Plans K, L, and N

1) Plan K pays 50% of the Part A deductible and skilled nursing coinsurance. It pays 10% for most Medicare approved Part B expenses.

2) Plan L pays 75% of the Part A deductible and skilled nursing coinsurance. It pays 15% for most Medicare approved Part B expenses.

3) Plan N: The insured pays a maximum $20 copay for a doctor’s office visit and a maximum $50 copay for an emergency room visit.

Benefits of a Medicare Supplement high-deductible Plan F or G.

Note: People turning 65 after January 1, 2020 are eligible to sign up for high deductible Plan G but not high F.

Comments

The text in green is the benefit package for high-deductible Plan F or G. The grey text is NOT part of the benefit package. High deductible Plan F or G has a 2020 calendar year $2,340 deductible that the insured pays first. After that it works just like a regular Plan F or G. Most companies do not offer high F or G, and for the most part the only people that sign up for this plan are ones that infrequently see their doctor or are happy to self-insure themselves for the deductible.

Basic Benefits

1. Part A coinsurance. The Medicare supplement will pay the $400 per day coinsurance for days 61-90 of a hospital stay. The Medicare supplement will pay the $800 per day coinsurance for the 60 lifetime reserve days. The Medicare supplement will pay for 365 additional days of hospitalization after Medicare hospitalization benefits are exhausted.

2. Medical expenses Part B: The Part B coinsurance is generally 20% of Medicare approved expenses. This includes the coinsurance for outpatient services and surgery. Plans K, L, and N require the Medicare beneficiary to pay a portion for the Part B coinsurance. ***Details below.

3. Blood: The first three pints of blood.

4. Hospice: The Medicare supplement pays the hospice coinsurance.

Skilled Nursing Facility coinsurance

1. Medicare pays 100% for the first 20 days for an approved stay for skilled nursing facility care.

2. For days 21-100 Medicare will pay for an approved stay. There is a $200 per day coinsurance that the Medicare supplement pays. ***See below for Plans K and L.

Part “A” Deductible

1. For 2023 the Medicare Part “A” deductible is $1,600 per hospital benefit period. The benefit period is for 60 days and begins after one’s discharge. The Medicare supplement could pay this benefit more than one time per year. ***See below for Plans K and L

Part “B” Deductible

1. The Medicare Part “B” deductible is an annual $226 in 2023.

Part “B” Excess (100%)

1. In general, if a Medicare Part “B” provider charges an excess above the Medicare approved amount, this benefit will pay that amount. Physicians may charge a maximum of 115% of the Medicare approved amount. These are known as non-participating physicians or physicians that do not accept Medicare assignment.

Foreign Travel Emergency

1. In general, Medicare does not pay in foreign countries. One will pay the first $250 for Medical services. After that, the Medicare supplement will pay 80%, and the insured will have a 20% coinsurance. Usually one must pay his/her bill upfront and then bring the bills back to submit a claim.

Out-of-pocket limit

1. For Plan K there is a maximum annual out-of-pocket limit of $6,620. The Medicare supplement will pay 100% after that limit is reached.

2. For Plan L there is a maximum annual out-of-pocket limit of $3,310. The Medicare supplement will pay 100% after that limit is reached.

High-deductible Plan F or G.

1. High-deductible Plan F or G pays the same benefits as Plan F or G after one has paid the 2023 calendar year deductible of $2,490. This deductible is for what the Medicare supplement would have paid. Medicare still pays its part when one has high-deductible Plan F or G. After one has met the deductible, then the plan pays just like a regular Plan F or G.

***Details for Plans K, L, and N

1. Plan K: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 50%. Pays 50% of the skilled nursing coinsurance. Pays 50% of the Part A deductible.

2. Plan L: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 75%. Pays 75% of the skilled nursing coinsurance. Pays 75% of the Part A deductible.

3. Plan N: The insured pays a maximum $20 copay for a doctor’s office visit and a maximum $50 copay for an emergency room visit.

Benefits of a Medicare Supplement Plan “G”

Comments

The text in green is the benefit package for Plan “G”. The grey text is NOT part of the Plan “G” benefit package. The only difference between Plan G and Plan F is that with Plan G you pay the annual Medicare Part B deductible, which is $226 in 2023. Now that people turning 65 after January 1, 2020 are no longer able to sign up for Plan F, Plan G has now become the new, most popular plan.

Basic Benefits

1. Part A coinsurance. The Medicare supplement will pay the $400 per day coinsurance for days 61-90 of a hospital stay. The Medicare supplement will pay the $800 per day coinsurance for the 60 lifetime reserve days. The Medicare supplement will pay for 365 additional days of hospitalization after Medicare hospitalization benefits are exhausted.

2. Medical expenses Part B: The Part B coinsurance is generally 20% of Medicare approved expenses. This includes the coinsurance for outpatient services and surgery. Plans K, L, and N require the Medicare beneficiary to pay a portion for the Part B coinsurance. ***Details below.

3. Blood: The first three pints of blood.

4. Hospice: The Medicare supplement pays the hospice coinsurance.

Skilled Nursing Facility coinsurance

1. Medicare pays 100% for the first 20 days for an approved stay for skilled nursing facility care.

2. For days 21-100 Medicare will pay for an approved stay. There is a $200 per day coinsurance that the Medicare supplement pays. ***See below for Plans K and L.

Part “A” Deductible

1. For 2023 the Medicare Part “A” deductible is $1,600 per hospital benefit period. The benefit period is for 60 days and begins after one’s discharge. The Medicare supplement could pay this benefit more than one time per year. ***See below for Plans K and L

Part “B” Deductible

1. The Medicare Part “B” deductible is an annual $226 in 2023.

Part “B” Excess (100%)

1. In general, if a Medicare Part “B” provider charges an excess above the Medicare approved amount, this benefit will pay that amount. Physicians may charge a maximum of 115% of the Medicare approved amount. These are known as non-participating physicians or physicians that do not accept Medicare assignment.

Foreign Travel Emergency

1. In general, Medicare does not pay in foreign countries. One will pay the first $250 for Medical services. After that, the Medicare supplement will pay 80%, and the insured will have a 20% coinsurance. Usually one must pay his/her bill upfront and then bring the bills back to submit a claim.

Out-of-pocket limit

1. For Plan K there is a maximum annual out-of-pocket limit of $6,620. The Medicare supplement will pay 100% after that limit is reached.

2. For Plan L there is a maximum annual out-of-pocket limit of $3,310. The Medicare supplement will pay 100% after that limit is reached.

High-deductible Plan F or G

1. High-deductible Plan F or G pays the same benefits as Plan F or G after one has paid a calendar year deductible of $2,490. This deductible is for what the Medicare supplement would have paid. Medicare still pays its part when one has high-deductible Plan F or G. After one has met the deductible, then the plan pays just like a regular Plan F or G.

***Details for Plans K, L, and N

1. Plan K: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 50%. Pays 50% of the skilled nursing coinsurance. Pays 50% of the Part A deductible.

2. Plan L: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 75%. Pays 75% of the skilled nursing coinsurance. Pays 75% of the Part A deductible.

3. Plan N: The insured pays a maximum $20 copay for a doctor’s office visit and a maximum $50 copay for an emergency room visit.

Benefits of a Medicare Supplement Plan “N”

Comments

The text in green is the benefit package for Plan “N”. The grey text is NOT part of the Plan “N” benefit package. Plans “M” and “N” were added by Medicare when they revised the plans as of June 1, 2010. The best way to understand Plan “N” is that it is similar to Plan “D”, except that one pays a $12-20 copay for a doctor’s office visit and a maximum $50 copay for an emergency room visit.

Plan N represents a good value for those desiring a low cost Medicare supplement that still covers virtually all of the high expense out of pocket costs. The premiums are typically $20-40 per month less compared to Plan G. However, this difference can be much higher in some states.

Basic Benefits

1. Part A coinsurance. The Medicare supplement will pay the $400 per day coinsurance for days 61-90 of a hospital stay. The Medicare supplement will pay the $800 per day coinsurance for the 60 lifetime reserve days. The Medicare supplement will pay for 365 additional days of hospitalization after Medicare hospitalization benefits are exhausted.

2. Medical expenses Part B: The Part B coinsurance is generally 20% of Medicare approved expenses. This includes the coinsurance for outpatient services and surgery. Plan N requires the Medicare beneficiary to pay a portion for the Part B coinsurance. ***Details below.

3. Blood: The first three pints of blood.

4. Hospice: The Medicare supplement pays the hospice coinsurance.

Skilled Nursing Facility coinsurance

1. Medicare pays 100% for the first 20 days for an approved stay for skilled nursing facility care.

2. For days 21-100 Medicare will pay for an approved stay. There is a $200 per day coinsurance that the Medicare supplement pays. ***See below for Plans K and L.

Part “A” Deductible

1. For 2023 the Medicare Part “A” deductible is $1,600 per hospital benefit period. The benefit period is for 60 days and begins after one’s discharge. The Medicare supplement could pay this benefit more than one time per year. ***See below for Plans K and L

Part “B” Deductible

1. The Medicare Part “B” deductible is an annual $226 in 2023.

Part “B” Excess (100%)

1. In general, if a Medicare Part “B” provider charges an excess above the Medicare approved amount, this benefit will pay that amount. Physicians may charge a maximum of 115% of the Medicare approved amount. These are known as non-participating physicians or physicians that do not accept Medicare assignment.

Foreign Travel Emergency

1. In general, Medicare does not pay in foreign countries. One will pay the first $250 for Medical services. After that, the Medicare supplement will pay 80%, and the insured will have a 20% coinsurance. Usually one must pay his/her bill upfront and then bring the bills back to submit a claim.

Out-of-pocket limit

1. For Plan K there is a maximum annual out-of-pocket limit of $6,620. The Medicare supplement will pay 100% after that limit is reached.

2. For Plan L there is a maximum annual out-of-pocket limit of $3,310. The Medicare supplement will pay 100% after that limit is reached.

High-deductible Plan F or G.

1. High-deductible Plan F or G pays the same benefits as Plan F or G after one has paid a calendar year deductible of $2,490. This deductible is for what the Medicare supplement would have paid. Medicare still pays its part when one has high-deductible Plan For G. After one has met the deductible, then the plan pays just like a regular Plan F or G.

***Details for Plan N

1. Plan K: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 50%. Pays 50% of the skilled nursing coinsurance. Pays 50% of the Part A deductible.

2. Plan L: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 75%. Pays 75% of the skilled nursing coinsurance. Pays 75% of the Part A deductible.

3. Plan N: The insured pays a maximum $20 copay for a doctor’s office visit and a maximum $50 copay for an emergency room visit. The copays apply after your Part B annual deductible has been met.

Why No Plans E, H, I, and J

By Lance D. Reedy

When Congress authorized Medicare in 1965, the insurance industry wasted no time to create “Medigap” policies for the new Medicare beneficiaries. These policies paid for “gaps” or deductibles and coinsurances not covered by the new Medicare legislation. This worked fine, except there was a big problem for shoppers. There was no standardization in most states for these plans. While the benefits for various companies’ plans were similar, it was still difficult for shoppers to compare coverage and benefits.

Through the Omnibus Budget Reconciliation Act (OBRA) of 1990, Congress directed the National Association of Insurance Commissioners (NAIC) to develop a model law and regulation that required all Medigap or Medicare supplement insurers to offer a standardized core plan. This new core plan was called Plan “A”. It also allowed companies to sell up to nine additional standard plans which were Plans B through Plan J. Plans H, I, and J had a prescription benefit; however, only a few companies elected to offer these three plans. Later on, Medicare added the high-deductible Plans F and J.**

Congress passed the Medicare Modernization Act (MMA) in 2003, which was the broadest revision to Medicare since it was authorized in 1965. Some of the key provisions to this sweeping legislation were as follows:

• A new Part D prescription plan was established.
• Medicare + choice was renamed Medicare advantage, and new funding was to be injected to expand this program. Today, this is also known as Medicare Part C.
• New Medigap or Medicare supplement Plans K and L were to be added in 2006.
• The prescription benefit was to be removed from Plans H, I, and J sold after January 1, 2006.
• Medicare beneficiaries in higher income tax brackets would pay a higher Medicare Part B premium. This was to be phased in over a three year period.

Two of the benefits included in the model 1990 legislation were the preventative benefit in Plans E and J and the “at home recovery” benefit in Plans D, G, I, and J. Over time as Medicare added new benefits, this resulted in the underutilization of these two Medicare supplement benefits.

The NAIC revised the model for the standardized plans for all plans sold after June 1, 2010. These new plans became known as the modernized plans. The preventative and at home recovery benefits were dropped. The old Plan G had the “Part B excess” benefit that paid at 80%. This was increased to 100% in the new Plan G. With these revisions, the following situation occurred:

• The old Plan E was identical to the existing Plan D.
• The old Plan H was also identical to Plan D.
• The old Plan I was identical to the new Plan G.
• The old Plan J was identical to the existing Plan F.

Therefore, the old standardized Plans E, H, I, and J became redundant to other lettered plans. The only sensible thing to do was to drop them from the new modernized plans. The model also created two new lettered plans, Plan M and N. Additionally, a new Part A hospice cost-sharing benefit was added to the basic benefits of all 2010 plans. This covers the five percent coinsurance charge for drugs and respite care. Please refer to the outline of coverage for details of the benefits for all of these plans.

What happens you if have a Medicare supplement policy that was issued prior to June 1, 2010? As long as you continue to pay your premium, your policy remains in force and your benefits continue unchanged.

Now you know what happened to Plans E, H, I, and J.

** For those interested reading in detail the 128 page, 2008 NAIC Medigap Model Regulation click here. This is available from cms.gov.

When You Can Change Your Medicare Supplement Plan

By Lance D. Reedy

There is plenty of confusion about when a person can and cannot change his/her Medicare supplement plan. Many people that I encounter are under the logical but mistaken impression that they can only change their Medicare supplement plan during the October 15th to December 7th Annual Election Period (AEP). The AEP is the time when a person can change his Part D prescription plan or Medicare advantage plan. A person can also switch from original Medicare to Medicare advantage (Part C) or vice versa. Please refer to my archived Newsletter, MedSupp News #14, for more details.  Put another way, the AEP involves a change where one or both ends of the change involves a Part D prescription plan or a Medicare advantage plan.

A Medicare supplement to another Medicare supplement switch does not have a Medicare advantage or Part D plan on either end of the change. Therefore, this switch falls outside of the rules of the AEP.

A Medicare supplement is an insurance product that is regulated and approved by the state insurance departments. The insurance companies’ Medicare supplement plans must follow Medicare’s established model for the benefits for every plan they offer. They also have to abide by the rules for the sixth month open enrollment period that begins the month when a person is eligible for Medicare Part B. For most people this begins on the first of the month when they turn 65. Likewise, the insurance companies have to follow the guarantee issue rules for a person past 65 that is losing other coverage. For a history about the standardization of these benefits, please refer to the page, Why No Plans E, H, I, or J.

However, in general there is no Medicare oversight stipulating when a person can change his/her Medicare supplement plan. Therefore, in most states a person can change her plan any month of the year providing that she medically qualifies for a new plan. Medically qualifying means that a person hasn’t had recent and serious medical issues such as strokes, cancer, heart attacks, any vascular surgery, rheumatoid arthritis, dementia, and so forth. Most companies require all “no’s” on their application’s health questions.

There are a few states that allow people to change their Medicare supplement plan without medical underwriting. This is called changing your plan using the birthday rule. Oregon has had its birthday rule for several years. Idaho adopted its birthday rule starting March 2022. Washington allows continuous open enrollment. Please check with us for further details.

Key Takeaways

• You can change your Medicare supplement any month of the year.
• Please refer to the above paragraph for the exceptions noted.
• You are usually eligible for a refund if you have paid in advance to a company that you are leaving. For more details about refunds, please click here.
• Changing to the same company as your spouse or other household member, in some situations, may qualify you for a discount. Please check with your agent.

Are you Eligible for a Refund?

By Lance D. Reedy

Let’s say that you have paid a twelve month premium in advance for your Medicare supplement plan. Months later you realize that there is a plan that is a much better value, and you want to change over to that plan. Do you have to stay with your existing plan, or can you make a change and have your unused portion of the premium you have paid, refunded back to you?

Here is recent dialog that explains the answer.

My phone rings…

Susan: Lance, thank you for sending me your info. Yes, I’m interested in having you meet with me.
Lance: I appreciate your call. And yes, I’d be happy to discuss this further.
Susan: I’ll be 65 in April, and I’m looking for some sort of coverage.
Lance: Okay.
Susan: And I should also mention that we paid a year’s premium for my husband’s Plan “F” last September.
Lance: How long has your husband had his plan?
Susan: He signed up two or three years ago.
Lance: I see. That was before January 1, 2020. That Plan F is no longer offered. Is your husband in good health with no recent serious illnesses?
Susan: Oh yes!
Lance: How much was his annual premium?
Susan: I know it was well over $2,400
Lance: Yikes! If you want, he can likely change to a lower cost Medicare supplement plan providing that he can answer the health questions on another company’s application with all “no” answers.
Susan: I thought you can’t change your plan now.
Lance: I have good news for you. You can. (click here to learn how)

Susan: Yeah, but we’ve paid a year’s premium, so we’re still stuck until next September.
Lance: I have more good news for you. Idaho is a “refund state”, which means that if you discontinue a Medicare supplement policy, the insurance company cannot keep unused or unearned premium.
Susan: Really?
Lance: Yes, here’s how it works. Your annual premium started September 1, 2019. Right?
Susan: Yes.
Lance: So let’s say we apply now for a lower cost plan with a March 1, 2020 effective date. You told me your husband’s in good health?
Susan: Yes.
Lance: I’m confident, then, that his application will be approved by his new company in a couple days. Once you have his new policy in your hands, you send a letter to his old company instructing them that you want to cancel out effective March 1, 2020.
Susan: That’s great news. I didn’t know you could do that.
Lance: You paid his twelve month premium, which so far has covered him from September 1, 2019 through February 29, 2020. That’s six months. In that letter you also instruct his old company to refund back to you the six months of unused premium. The concept here is that an insurance company is not entitled to keep what is called “unearned premium”. In other words, they can’t keep premium for future months that aren’t here yet.
Susan: That’s terrific!
Lance: And by the way, we send that letter certified and return receipt requested. We want proof that they received your letter.
Susan: Well, that’s good.
Lance: I’ll get back with you soon.

Check with your state department of insurance to verify that your state is a refund state. Most of them are.

Learn How to Avoid the Three Major Mistakes and What to do with that Stack of Stuff
By Lance D. Reedy

There are three major mistakes that many people unwittingly make when shopping for a Medicare supplement. I’ll describe them in more detail in this article and give specific examples of some of the traps that unsuspecting people have fallen into.

Here are the three major mistakes:

• Mistake #1 – Reading endless company mailers and thinking that you need to digest and understand that Stack of Stuff.
• Mistake #2 – Contacting numerous companies via their 800 numbers.
• Mistake #3 – Shopping for a Medicare plan when you should be shopping for an agent.

lance@nwsimail.com  |  (888) 746-6285