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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 in.
 

Medicare Supplement Standardized Plans

  A B C D E F G H I J
Basic Benefits X X X X X X X X X X
Part A Deductible   X X X X X X X X X
Skilled Nursing     X X X X X X X X
Foreign Travel     X X X X X X X X
At-Home Recovery       X     X   X X
Preventive Care         X         X
Part B Deductible     X     X       X
80% Excess Part B             X      
100% Excess Part B           X     X X
Basic Drugs ($1,250)               X X  
Extended Drugs ($3,000)                   X


 
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.

Plan 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.

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Part 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 for itself.

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Skilled Nursing
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.

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Foreign Travel
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.

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At Home Recovery
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 service.

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.

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Preventive Care
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.

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Part B Deductible
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 cases, more.

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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 is minimal.

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" coverage.

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Basic 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

Annual drug cost

    $1,250

You pay deductible

       -250

Balance

    $1,000

You pay 50%

       -500

50% paid by insurance

      $500

 
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.

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