Learn About Medigap Supplement Plans (Medicare Open Enrollment series)

SUMMARY
As a contractor for Medicare, Kepro serves as the Beneficiary and Family Centered Care Quality Improvement Organization, also referred to as a BFCC-QIO. While Kepro provides BFCC-QIO services in 29 states, the general information is relevant to everyone who has Medicare (including Medicare Advantage) and everyone who works with people who have Medicare. 

This episode is a conversation with our guest from the Oklahoma Department of Insurance. He will talk about Medigap policies.

Ray Walker is the Divisional Director for the Medicare Assistance Program at the Oklahoma Insurance Department.  Mr. Walker has a Bachelor’s Degree in Communication from the University of Oklahoma and over 20 years experience working in and around the healthcare industry, primarily in the field of insurance.  Mr. Walker has had the privilege of speaking to groups across the state and around the country on topics ranging from genetics to team building to Medicare. Mr. Walker currently serves on the Advisory Committee to the State Council on Aging and recently completed his second term on the SHIP Steering Committee (State Health Insurance Assistance Program), where he served as the vice chairperson. He also serves on the Leadership Council for the MIPPA Grant Program.  

For more information about Kepro BFCC-QIO, please visit www.keproqio.com.

Medicare Open Enrollment 2023 - October 15 - December 7

KEY TOPICS
00:29: Overview, introduction of guest, Ray Walker
03:09: Introduction of Medigap
05:24: Differences between Medigap and Medicare Advantage
11:01: Differences between Medigap Plans and Medicare Parts
17:11: Medigap and Medicare disability
18:13: Medicare supplement guide
19:57: Final thoughts

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RESOURCES
 BFCC-QIO Information for stakeholders: www.keproqio.com/partners
BFCC-QIO Information for people who have Medicare: www.keproqio.com/bene
SHIP information: www.shiphelp.org
Supplement policy guide: www.oid.ok.gov

Music: Motivational Upbeat Corporate by RinkevichMusic
https://soundcloud.com/rinkevichmusic
Video Link: https://youtu.be/U78mgVaM12M

Transcript

Welcome to Aging Health Matters, a podcast from Kepro, a Beneficiary and Family Centered Care Quality Improvement Organization. We plan to cover healthcare topics for the Medicare population. Information in today’s show may help you or someone you know in their healthcare journey.  Thanks for joining us. Now let’s get started.

Hi everyone and welcome to another edition of Kepro's podcast, Aging Health Matters. This is Nancy Jobe, an Outreach Specialist with Kepro, and Kepro is the Beneficiary and Family Centered Care Quality Improvement Organization for 29 states.

We have three key services for people who have Medicare. We provide assistance with discharge appeals, quality of care complaints, and Immediate Advocacy. More information on these topics is available on our website, which is www.keproqio.com. As we reach out on these topics to Medicare recipients, we work with many outstanding partners to help spread information about the Medicare program and its benefits.

Today's podcast includes one of our partnering organizations, the State Health Insurance Assistance Program, or SHIP, to talk about Medigap with Open Enrollment coming up soon. This is a reminder we sometimes invite our partners to participate in our podcast based on the topic, and while we greatly appreciate their partnerships, we also want to be clear that their opinions and guidance expressed by them in this podcast is solely theirs or their agencies and not those of Kepro, CMS, or the Medicare program. So please keep in mind that state-by-state guidance may differ as well.

I'd like to welcome Ray Walker, the Divisional Director of Medicare Assistance Program at the Oklahoma Insurance Department. Thank you Ray for joining us today and being our guest. And could you tell us a little bit about yourself and how you got involved with the State Health Insurance Assistance Program?

Absolutely. And thank you for inviting me. I have been with the Oklahoma Insurance Department in this role now for about 11 years, and I got into this role, I previously had worked for Pacificare, which was a managed care company here in the United States. They were originally from California and then branched out, which was later, many, many years later, purchased by United Healthcare. So they were  absorbed into United Healthcare, and so that's how I got started into the managed care area. And at that point in time, Pacificare was the company that had Secure Horizons, and you still see that name on a lot of the United Healthcare senior products, so sort of was baptized into this arena in that area. So it was just sort of a natural shift over to the Oklahoma Insurance Department where I spend quite a bit of my time helping people with questions about Medicare Advantage and Medicare supplements and things like that.

Great. You sound like you might be an expert on what we want to talk about today. Today I would like to kind of talk about a Medigap policies, which is so confusing for people. You know that because there's many different insurance policies out there available for Medicare beneficiaries, and I'd like to try and help the beneficiaries understand what a Medigap policy is, how it works, how to choose one. So I'm going to ask you, Ray, if you could kind of explain first of all what a Medigap policy is.

You bet. A Medigap policy, they're also called Medicare supplement policies, and the name Medigap came about is because it fills the gaps that are left over after original Medicare has paid. So in the situation where a person has a Medigap policy, what happens is when they go to the doctor, a claim is generated, and that claim is sent to Medicare, for Medicare to pay their portion.

After that happens, then Medicare sends what's remaining over to the Medigap insurance company for them to pay their portion of that claim as well. So that's where that term Medigap came from. Now Medigap policies, Medigap insurance, is different from all of the other parts of the Medicare system in that they are regulated at the state level. There are certain federal guidelines that all the states have to follow, but other than that, each state kind of runs the show when it comes to the Medigap policies that are offered in their states. Some of the other things that are different about the Medigap policies is they do not offer prescription drug coverage. So whereas some of the Medicare Advantage plans offer drug coverage, in fact most of them do, with a Medigap policy, you actually would need to enroll in a Part D prescription drug plan, to make sure that your prescriptions are covered. The other thing that we always try to point out to people is there's really no benefit to having a Medicare Advantage plan and a Medicare supplement plan. The two don't work together, so if a person wants to have a Medicare supplement policy, they really need to stick with original Medicare and then purchase a Med-sup policy and then get a standalone Part D drug plan to cover their prescriptions.

That's a lot of information. I'm going to try and break it down a little bit Ray. So when a person decides OK, I'm going to go with a Medigap policy or a Medicare supplement policy rather than a Medicare Advantage plan, a lot of people don't understand that OK, I've got Medicare now. I have insurance, so they don't really understand that Medicare is only going to pay a certain percentage, and then the Medigap policy picks up the difference. So therefore, that would be the decision to want to have that Medigap policy in my understanding, correct?

That is correct. For the most part, traditional Medicare Parts A and B cover approximately 80% of your healthcare costs, which is a lot, but that 20% can add up very quickly. For example, Part A has a deductible of $1600 when you first go into the hospital, so that's a big chunk of change for somebody. Part B has a Part B deductible, and then it's got a coinsurance and copays every time you go to the doctor or you go to physical therapy or you get a wheelchair, something like that. So these Medicare supplement policies can pop in and pay that difference, so that you don't have those surprise expenses that you weren't planning on.

Great. Thanks for that explanation. And you didn't mention Part A and Part B, so there is a cost with Medicare for that as well. Is that correct?

That is true. Now most people give their Part A Medicare premium free because we've been paying for it. As long as you've worked for 10 years or 40 quarters, as it says in the regulations, then your Part A is going to be premium free. It's possible for someone to get Part A if they've had less than 10 years working, but it does have a cost associated with it. Part B, on the other hand, everybody pays a monthly premium for it. This year I believe it's $164.90, and they have to pay that every month, and typically it comes out of their Social Security check. So you've got those premiums that you've got to pay, and then attached to that is the out-of-pocket expenses any time you seek medical care.

OK, that makes sense to me as far as that goes. So when you have that Medigap policy, what I'm seeing is a big advantage is the fact that you're not going to have any unexpected expenses. If you're paying your monthly Medigap policy premium, then you know that when you go to the doctor, you're not going to have any other expenses other than your own policy premium. Is that correct?

That's correct. A lot of times when people contact our office, the big question is I hear about Medicare Advantage, I hear about Medicare supplement policies, so what's the difference? What's the advantage of one over the other?

One of the things that people need to keep in mind is the monthly premium for a Medigap policy is going to be higher than say the monthly premium for a Medicare Advantage plan. A lot of the Medicare Advantage plans right now have a zero monthly premium, and they include the prescription drug coverage. So that can be very, very enticing to Medicare beneficiaries and would be very beneficial to some of them as well.

On the other side, with the Medicare supplement policy, you may have a higher monthly premium, which when you first start out, it's going to be in the range of about $100 a month. But it's a fixed amount. You're going to have that monthly premium that you're going to pay. And then if for some reason you have to access those benefits during the year, then you're not going to have those surprises, that $1600 per admission or something like that. As long as you're paying your monthly premium, as you said Nancy, then you don't have to worry about those surprises.

There's ten different standardized plans that are available for people to purchase, and this is the same across the country. So of those 10 standardized plans, someone could get like the basic plan, which is going to cover like the Part A coinsurance, and the Part B coinsurance, and things like that. That's going to be kind of the basic plan all the way up to a Plan G as in girl, which covers everything but the Part B deductible. So it's very individualized; one size does not fit all. We tell people just because your best friend has one plan, and it works great for them, that doesn't always mean it's going to be the best plan for you. So we try to spend our time sitting down with people going through what's going on in their world, what's their lifestyle like? Do they have retiree coverage? What are the factors that play into their lifestyle, and based on that, we help them figure out if a Medicare supplement policy is going to be the best choice for them, and if so, we can do a comparison of the plans that are available in Oklahoma and what those premiums would look like.

So a beneficiary should reach out to their State Health Insurance Assistance Program in their state to get some assistance with the policies that are available to them. Is that correct?

That is correct because it can vary significantly from state to state.

OK, that is a good point. Where could they find their SHIP program or whatever it might be called in their state? Because I know in different states they're called different things rather than State Health Insurance Assistance Programs. Is there some place that they can look that up?

Yes. If you go to shiphelp.org so S-H-I-P-H-E-L-P.org, that'll take you to a website where it says if you're looking for a SHIP program, put in the state, and it'll give you the contact information for that state.

Oh, perfect. That'll help quite a few of our listeners, I'm sure, to be able to find the correct information for their state. You mentioned that there were different plans for that, and I know a lot of people get a little bit confused because when you say Plan ABCD, whatever. And then there's also Plan G and whatever for the Medicare supplement plans. A Part D plan is totally different, correct?

That is absolutely correct, and that's a really good point. We have Part A, Part B, Part C, and Part D of Medicare, but then when you're talking specifically about Medigap policies, then we get into Plan A, Plan B, Plan D,G,K,L,M, and N, and people get so confused. Oftentimes it's not made clear to them when they're purchasing the policy. They think that what they purchased is a Plan D when it was actually Part D of Medicare, which is the prescription drug coverage. So I have no idea why Medicare didn't choose a different nomenclature when they were naming these things, but be that as it may, they went with the alphabet, so it's very, very important that people are very clear when they're talking with an insurance agent that they understand. Are we talking about a Medicare supplement policy or a Medicare Advantage plan or a prescription drug plan?

Wow Ray, that's a lot to remember.

And that's the reason why there are SHIP programs across the country. We don't want people to feel like they've got to remember this stuff. There are counselors that are available in every state that can walk them through this.

Exactly. That's a great point. So they should never feel like they're alone trying to navigate Medicare because there's always a SHIP program there to reach out to, to help them get through it all.

Absolutely.

That's great information. Do you see any disadvantages to a Medigap policy, or is it just pretty much an individualized choice?

Well, with the Medigap policies, as we said before, they don't include the prescription drug coverage. So you would have your monthly premium for your Medicare supplement policy as well as a monthly premium for your Part D prescription drug plan. That's something for somebody to keep in mind as they're making this decision. And the other thing that we tell people is that with the Medicare supplement policies, they are good anywhere that Medicare is accepted.

So if a person has a Medicare supplement policy, if they do a lot of traveling and such, that's OK because if they get sick, if something happens, and there's an accident or something, they can go to the nearest hospital. Well, I shouldn't say it that way. They can go seek medical care anywhere in the country, and their Medicare supplement insurance will be accepted as well. 

With a Medicare Advantage plan, they have a network of providers that they would like for you to stay with them, and depending on what type of Medicare Advantage plan you're on, it may be more restrictive than other Medicare Advantage plans. So let's say that you are traveling and draw on a Medicare Advantage plan, if you have a true emergency, if it's life or limb threatening, uncontrolled bleeding, something that anyone would think is a true emergency, you can go to the nearest emergency room, and it will be covered.

But let's just say you start having flu symptoms. You're just not feeling well. Your Advantage plan would probably expect you to come back in network for treatment to one of the contracted providers, and so that's not blanket. That's not completely across the board, but in a lot of cases that is the case. So you just have to weigh it as an individual, to see which one makes the most sense for you. The other thing to keep in mind is with the Advantage plans, you can change those every year, Open Enrollment from October 15 through December 7.

If you think you want to try a different Advantage plan or a different Part D drug plan, those can be changed annually. But with the Medicare supplement plan, the best time to buy one is when you first become eligible for Medicare, and you sign up for Part B.

During that time, you've got a six-month period during which you can purchase any Medicare supplement plan that's available in your state, and they can't deny you or charge you more because of any current or preexisting health condition. But outside of that six-month period, they actually can apply underwriting, and they can ask you health questions, things like that. And based on that information, they may not offer you another plan.

It's kind of one of those deals that when you when you're first becoming eligible for Medicare, that's when you need to make that decision about what direction you'd like to go.

Oh, now that's great information there, Ray, because a lot of people don't understand that. They'll get into a Medicare Advantage plan and then five years down the road decide they want to switch over, and then, they could be denied a particular plan they may be looking for then.

Now I will tell you since we're on the topic, if a person enrolls in a Medigap policy when they first enroll in Medicare and they start their Part B, if down the road, they decide they would like to try a Medicare Advantage plan, they can do that, and if within the first 12 months they decide they don't like it, and they'd like to go back to their old Med-sup policy, they can do that. And a lot of people don't know that.

However, they've got to take that action within that first 12 months of enrolling in the MA plan If they want to.

So there is an option there for them to test the water so to speak.

Yes, ma'am. It's just a bit of a window there that if they want to try a Medicare Advantage plan, they can do so.

Well, Ray, I really appreciate you giving us all this information today about the Medigap policies and the different costs and programs and everything that a beneficiary would need to understand, and obviously they need to really reach out to their State Health Insurance Assistance Program, so that they can get a better grasp of what's available for them at that time. Is there anything else that you would like to share with them that they may need to know?

One last thing that I would like to add is that regarding people who are on Medicare due to disability, the rules in each state are different. Some states offer Medigap policies to people who are on Medicare due to disability. Others do not. For instance, in Oklahoma, the law says any company that offers Medicare supplement policies in our state has to offer at least one of the 10 standardized plans to a person who's on Medicare due to disability during that six-month Open Enrollment period when they first become eligible for Medicare.

Now other states have different rules, so I would encourage if there is someone who's on disability and wants more information to contact the SHIP program in their state to learn more.

OK great. Thank you Ray. Appreciate the clarification on that.

It sounds like if someone is looking at turning 65 and getting on to Medicare, they really need to reach out to someone to get some further explanation. I understand one last thing that I think I'm aware of and you work for the Department of Insurance that many of the state’s Department of Insurance even put out a book or have a place online where they can look up the different policies that are available in their state. Would that be a correct thing to tell people?

And I didn't even have to pay you. We've got a Medicare supplement buyer’s guide that we produce in Oklahoma. It talks about what a Medigap policy is, how it works. It compares it to a Medicare Advantage plan, kind of the pros and cons, and they're free to the public. Someone can just call us, and we’re more than happy to mail that out to them.

It's also available through the computer. You can go to the OID website, excuse me, the Oklahoma Insurance Department website that’s oid.ok.gov, and it's available there. Now we don't produce a directory of the companies that offer a policy in the state.

The reason for that is because, unlike the Medicare Advantage plans, which all kind of shift at the same time of year there during Open Enrollment, the Medicare supplement policies can kind of make changes throughout the year. So rather than putting out a publication at the beginning of the year, we encourage people to reach out to us, and then we'll do a comparison for them right then that we can send to them electronically that gives them the current information.

Great, and I think that's probably true of most states. So if they reach out to either the Department of Insurance or their SHIP program in their state, they're going to be able to obtain that information.

Correct.

Great. Well, thank you so much, Ray. I really appreciate you being our guest today and giving us some great information to move forward with learning about Medigap. Be sure and listen to our next podcast that will be coming up. We do a monthly podcast. You can find more about Kepro's podcast by going to our website, which is www.keproqio.com, to learn what podcasts we have, and you can listen to any of the past podcasts that we have as well. 

With respect to different Medicare beneficiaries and stakeholders that we work with, if you'd like to also receive a newsletter from Kepro which we send out, you can sign up for that on our website as well,keproqio.com, and we look forward to having you listen to our future podcast episodes, so please stay tuned. Any of the information that we have today will be available in the show notes, so please continue to listen to Aging Health Matters by Kepro. Thank you so much.