The original Medicare Plan is available nationwide and pays for many health care services and supplies; however, it doesn't pay all of your health care costs. The costs you must pay, like coinsurance and deductibles, are called the "gaps" in Medicare coverage. The number one choice of Medicare beneficiaries who do not have employer coverage is Original Medicare with a Medigap Policy or Medicare Supplement to cover the gaps in Medicare.
Medicare Supplement insurance policies that are sold by private insurance companies to Medicare beneficiaries are subject to federal and state laws. There are 12 standardized policies with various benefits, labeled Plan A through Plan L. Your State decides which plans can be sold in your State. Medigap policies help pay for claims paid through Medicare, and some Medigap policies also cover benefits Medicare doesn't cover like Medicare Part B excess charges.
Managed Care Plans
A Managed Care plan involves a group of doctors, hospitals, and other health care providers who have agreed to provide care to Medicare beneficiaries in exchange for a fixed amount of money from Medicare every month. Managed Care plans include Health Maintenance Organizations (HMOs), HMOs with a Point of Service (POS) option, Provider Sponsored Organizations (PSOs), Preferred Provider Organizations (PPOs), and Cost Plans.
The new Federal law that provided for Medicare to start offering prescription drug coverage, also provided funding for Medicare managed care. Formerly known as Medicare+Choice, the managed care (HMOs, PPOs or PFFSs) plans are now called Medicare Advantage.
These plans are offered by private companies that contract with Medicare to provide all Medicare Part A and Part B benefits to enrollees.
- With Medigap, there is no restriction to use specific doctors and hospitals
- With Medigap, you can select any Medicare Part D plan for your prescription drug coverage to cover your specific needs. With Medicare Advantage plans, your prescription drug coverage is included in your plan.
- Your Medigap plan is guaranteed renewable. That means the insurance company is required to automatically renew or continue your Medigap policy, unless you make untrue statements to the company, commit fraud, or don't pay your premiums.
This information has been contributed by Insight, a publication by Transamerica Affinity Services, the AICPA Medicare Supplement Insurance Program provider. Tracking # 603348
The Medicare Supplement Insurance Plan is available to AICPA members, their spouses and their parents.