Medicare Select Insurance Policies
Many insurance companies offer to individuals eligible for Medicare individual policies that supplement the benefits available under Medicare. These policies are referred to as Medicare supplement or Medigap policies.
The federal government has expanded the options available to include managed care plans that require that you see only network providers to receive optimum benefits, and plans whereby the insurance company agrees to provide Medicare benefits.
Medicare select policies supplement the benefits available under the Medicare program and are offered by insurance companies and health maintenance organizations (HMOs). Medicare select policies are similar to standard Medicare supplement insurance. However, Medicare select policies pay supplemental benefits only if covered services are obtained through plan providers selected by the insurance company or HMO. Each insurance company that offers a Medicare select policy contracts with its own network of plan providers to provide services.
If you buy a Medicare select policy, each time you receive covered services from a plan provider, Medicare will pay its share of the approved charges and the insurer will pay the full supplemental benefits provided for in the policy. Medicare select insurers must also pay supplemental benefits for emergency health care furnished by providers outside the plan provider network.
In general, Medicare select policies deny payment or pay less than the full benefit if you go outside the network for nonemergency services. Medicare, however, will still pay its share of approved charges if the services you receive outside the network are services covered by Medicare.
New Policy Option
Some insurance companies offer Medicare select cost-sharing policies. Benefits are provided after you have paid 25% or 50% cost-sharing up to $2,470 or $4,940 in out-of-pocket expenses, respectively, during a calendar year. The out-of-pocket limits for Medicare select cost-sharing policies are updated each year and are based on estimates of the United States Per Capital Costs (USPCC) of the Medicare program published by Centers for Medicare and Medicaid Services (CMS). The cost-sharing and out-of-pocket expenses would ordinarily be paid by the policy.
All Medicare select policies include a core of benefits. The only separately priced option which may be offered is the Prescription Drug Rider.
All Medicare select policies provide the following benefits:
- Part A deductible ($1,216)
- Copayment for 61st to 90th day of hospitalization ($304 a day)
- Copayment for 91st to 150th day of hospitalization ($608 a day)--full coverage after Medicare days are exhausted
- Copayment for 21st to 100th day of skilled nursing care in a skilled nursing facility ($152 a day)
- 175 days per lifetime of inpatient psychiatric care in addition to Medicare's 190 days per lifetime
- First three pints of blood
- Part B deductible ($147)
- 20% of Medicare's Part B services with no lifetime maximum and actual charges for authorized referral services
- 365 home health care visits (including those paid by Medicare)
- Foreign Travel Rider: May have a deductible of up to $250. Must pay at least 80% of billed charges for the first 60 consecutive days you are outside U.S. Benefit limit must be at least $50,000 per lifetime
- Coverage for full usual and customary cost of non-Medicare diabetic supplies, and non-Medicare covered chiropractic care, non-Medicare hospital and ambulatory surgery center charges and anesthetics for dental care, and non-Medicare breast reconstruction
- Coverage for 30 days non-Medicare skilled nursing facility care - no prior hospitalization required
Wisconsin insurance law requires Medicare select policies to contain the following "mandated" benefits. These benefits are available even when Medicare does not cover these expenses.
Skilled Nursing Facilities: Medicare select policies cover 30 days of skilled nursing care in a skilled nursing facility. The facility does not need to be certified by Medicare and the stay does not have to meet Medicare's definition of skilled care. No prior hospitalization may be required. The facility must be a licensed skilled care nursing facility. The care also must meet the insurance company's standards as medically necessary.
Home Health Care: Medicare select policies will pay up to 40 home health care visits per year in addition to those provided by Medicare, if you qualify. Your doctor must certify that you would need to be in the hospital or skilled nursing home if the home care was not available to you. Home nursing and medically necessary home health aide services are covered on a part-time or intermittent basis, along with physical, respiratory, occupational, or speech therapy.
Medicare select insurance companies are required to offer coverage for 365 home health care visits in a policy year. Insurance companies may charge an additional premium for the additional coverage. Medicare provides coverage for all medically necessary home health visits. However, "medically necessary" is defined quite narrowly, and you must meet certain other criteria.
Kidney Disease: Medicare select policies cover inpatient or outpatient expense for dialysis, transplantation, or donor-related services of kidney disease up to $30,000 in any calendar year. Policies are not required to duplicate Medicare payments for kidney disease treatment.
Diabetes Treatment: Medicare select policies cover the usual and customary expenses incurred for the installation and use of an insulin infusion pump or other equipment or non-prescription supplies for the treatment of diabetes. Self-management services are also considered a covered expense. This benefit is available even if Medicare does not cover the claim.
Medicare select policies issued prior to January 1, 2006, for individuals who do not enroll in Medicare Part D cover prescription medication, insulin, and supplies associated with the injection of insulin. Prescription drug expenses are subject to the $6,250 deductible for drug charges. This deductible does not apply to insulin.
Medicare select policies issued beginning January 1, 2006, do not cover prescription medication, insulin, and supplies associated with the injection of insulin as policies are prohibited from duplicating coverage available under the Medicare Part D.
Chiropractic Care: Medigap policies cover the usual and customary expense for services provided by a chiropractor. This benefit is available even if Medicare does not cover the claim.
Hospital and Ambulatory Surgery Center Charges and Anesthetics for Dental Care: Medicare select policies cover hospital or ambulatory surgery center charges incurred and anesthetics provided in conjunction with dental care for an individual with a chronic disability or an individual with a medical condition that requires hospitalization or general anesthesia for dental care.
Breast Reconstruction: Medicare select policies cover breast reconstruction of the affected tissue incident to a mastectomy.
Coverage of Certain Health Care Costs in Cancer Clinical Trials: Medicare select policies issued or renewed beginning November 1, 2006, cover certain services, items, or drugs administered in cancer clinical trials in certain situations. The coverage is subject to all terms, conditions, and restrictions that apply to other coverage under the policy, including the treatment under the policy of services performed by participating and nonparticipating providers.
Catastrophic Prescription Drugs: Medicare select policies issued prior to January 1, 2006, to Medicare beneficiaries who do not enroll in Medicare Part D cover at least 80% of the charges for outpatient prescription drugs after a drug deductible of no more than $6,250 per calendar year. Medigap policies issued beginning January 1, 2006, and after will not include catastrophic prescription drug coverage as these policies are not allowed to duplicate benefits available under Medicare Part D.