Medicare Supplemental Insurance
Choosing the Best Plan for You
Before you look at the different companies
and their premiums, you need to determine which package of
benefits is best for you. Remember: Medicare supplemental
insurance does just that-it supplements what Medicare pays
for; hospital, medical, and related expenses Medicare doesn't
cover and that you might be responsible for.
Each of the 10 standardized plans offers
specific benefits. If you know which benefits are important
to you, you can then choose the plan that offers those benefits,
or the closest version.
The following Medicare Supplement chart
can help give you the information you need to decide what
plan will suit you best, just click on the plan you are interested
The Bottom Line
Our professional recommendation to most seniors, based on
over 20 years of experience in dealing with hundreds of seniors,
is Plan D. We feel this plan offers the best value in proportion
to the cost. Many benefits offered by the other plans are
no more than "bells and whistles" and are, for most
seniors, not cost effective.
Note: If you spend, or anticipate
spending, $125 or more per month on prescription drugs, it
may make sense for you to purchase Plan H, I or J and use
the maximum benpurchase Plan H, I or J and use the maximum
benefits provided. Remember that, unless you are applying
under "Open Enrollment", have any health problems
that would cause the company to refuse to cover you), as most
insurers are medically underwriting these plans. For the most
part, however, Plan D will be your best value.
a Basic Benefit
All 10 plans include basic benefits, which provide coverage
for certain Part A hospital co-insurance amounts and the 20%
Part B co-insurance.
Plan A includes these basic
benefits. All insurance companies that offer Medicare supplemental
coverage must offer plan A.
All plans, except Plan A, include coverage for the Medicare
Part A deductible. We recommend that you have this coverage
because, unlike a calendar-year deductible, it is possible
for you to have to pay this amount four times in one year
for different hospital stays. The part A deductible for 2000
is $776 per benefit period, this benefit will more than pay
The next benefit to consider is skilled nursing facility care
which is included on Plans C through J. It is a substantial
benefit to those who qualify for it and does not add much
to the cost of the Medicare supplement policy. In each benefit
period, the insurance company will pay $97 per day for days
21 through 100.
Plans C through J also offer the foreign travel benefit. If
for any reason you find yourself outside of the United States,
this benefit can be very valuable. Medicare does not provide
coverage (with a few exceptions) outside of the country. That
means that even on a cruise ship not registered in the United
States you would be considered to be in a foreign country
if you needed emergency medical attention. The foreign travel
benefit pays for medically necessary emergency care services
for which care began during the first 60 days of each trip
outside the United States. After you pay a $250 deductible,
the insurance company would pay 80 percent of the remaining
charges, up to a life time maximum of $50,000.
The at-home recovery benefit is offered by Plans D, G, I and
J. If you want to include this benefit, your choice of plans
is narrowed to four out of the 10. This important benefit
helps to pay for assistance with activities of daily living-at
home-when you are recovering from an illness, injury or surgery.
Assistance would be provided in bathing, dressing, personal
hygiene, transferring, eating, walking, taking medication
and changing dressings. These services must be provided by
a qualified or licensed home health aide/homemaker, personal
care aide, or nurse employed by a licensed home healthcare
Coverage would be provided
for one four-hour visit, up to seven visits per week. The
attending physician must certify that you have a genuine need
for this assistance. The maximum paid is $40 per visit, and
the maximum benefit is $1,600 per year.
Preventive care is offered by Plans E and J. Although this
benefit covers a wide variety of services, it really doesnít
amount to much because of its low maximum calendar year benefit
of $120. Since including this benefit usually adds about that
amount to the cost of the premium, it is just an exchange
of dollars. We donít recommend it.
Coverage for the Medicare Part B deductible ($100 per calendar
year) is offered on Plans C, F and J.
Again, this benefit amounts
to an exchange of dollars. In other words, it will cost you
about $100 in premium per year to have this coverage-in some
80% or 100% Excess Part B
Two other benefits cover Part B charges beyond what Medicare
pays. One pays 80% of excess Bart B charges (the difference
between the Medicare-approved amount for covered services
and supplies and the amount the service provider is allowed
to charge) and is offered only by Plan G. The other benefit
pays 100% and is offered by Plans F, I & J.
The big question is: "Do
you need it?" Recent federal legislation mandated that
in 1997 physicians who do not accept assignment cannot charge
more than 115% of what Medicare approves for that service.
Since you are only responsible for that excess 15%, your exposure
As you can see, the 80%
and 100% benefits are not as valuable as they may seem. Also,
many doctors and hospitals now accept assignment
-that is, they have agreed to accept Medicareís approved amounts
as payment in full (except for deductibles and co-payments),
either for all patients or on a case-by-case basis.
Note: You may want to consider
this benefit however, if you live in an area with a high concentration
of non-assignment doctors. Evaluate the difference in cost
between Plan C and Plan F, I or J. (Plan C offers the same
benefits as Plan F, except for "100% Excess Part B"
or Extended Drugs
Many seniors are concerned about prescription drug coverage.
The standardized plans offer either basic or extended drugs.
Under Plans H and I, the policyholder pays a $250 calendar-year
deductible. After that, the insurance company pays 50% of
the cost of prescriptions, up to $1,250 for that calendar
year. Plan J offers the same benefit, except the maximum (under
extended drugs) is $3,000 per calendar year.
Because of providing this
coverage, Plans H, I and J are the most expensive.
Drug Coverage Example
To illustrate the limitations of this benefit, through, compare
the difference in premiums between Plan D and Plan H, which
have similar benefits. Plan H includes a $1,250 annual prescription
drug benefit, but does not offer at-home recovery. Depending
on the company, the difference in premium ranges from approximately
$300 to $1,600, annually.
If the difference in premium
were, for example, $500, you would need to use at least $100
per month or $1,250 per year in prescription drugs just to
break even on the extra cost.