Medigap and Medicaid insurance policies regulated by Government

Although both state and federal governments regulate Medigap insurance policies, Medigap is not government sponsored. Private insurance companies and consumer groups, such as the AARP (American Association of Retired Persons), sell Medigap policies to fill the gaps in the Original Medicare plan coverage. Premiums for Medigap policies are kept to a minimum because the policies cover only the gaps left by Medicare. (Sticking with a Medigap policy makes good sense. Otherwise, you buy another supplemental policy that may cover more than you need and may be more expensive.) Call the Medicare hotline at 800-638-6833 (TTY/TDD 800-820-1202 for the hearing or speech impaired) for more information on supplemental insurance policies (Medigap).

Call your state insurance office for the names of companies that are licensed to sell Medigap policies in your state. To find your state health insurance contact, check with the National Association of Insurance Commissioners (see the Resource Center for contact information).

The federal government has authorized ten standardized Medigap policies labeled Plans A through J which means that the insurance coverage for a specific plan, such as Plan D, is the same from one company to another and from one state to another. Plans A through J represent a wide range in coverage. Plan A offers the most basic supplement to Medicare coverage. Plan B (not to be confused with Medicare Part B) offers the same provisions as in Plan A, along with additional specified provisions, and so on through Plan J. Plan J offers the most coverage of the Medigap plans and is usually the most expensive.

The availability of these plans depends on where you live: Your state may offer all or just a few of the standard policies. If an insurance company wants to sell Medigap policies, it must sell at least Plan A.

An insurance company cannot legally sell you more than one Medigap policy. Because Medigap policies are designed to fill in the gaps left by Medicare coverage, you don’t need more than one Medigap policy. Medigap policies normally pay most or all of the Medicare coinsurance amounts. They may also cover Medicare deductibles. Some plans pay part or all of the following:

- Outpatient prescription drugs (plans H, I, and J)

- Preventive care (plans E and J)

- Emergency medical care in a foreign country (plans C through J)

- Limited coverage for home health care (plans D, G, I, and J)

Medigap policies don’t cover long-term care. When your financial resources are depleted, you may meet your state’s eligibility requirements for Medicaid. If so, Medicaid helps pay for long-term care.

Signing up for Medigap benefits while you’re enrolled in a Medicare HMO is duplicate coverage. Medigap policies are designed to pay benefits associated with fee-for-service plans. Certain consumer protection regulations, including a 30-day money-back guarantee and a guarantee of renewability, govern the insurance companies that sell Medigap policies. The

health insurance Portability and Accountability Act (HIPAA) regulations apply to Medigap to govern pre-existing condition waiting periods.

Medicare SELECT

Insurance companies and managed care plans throughout the country can sell Medicare SELECT, another type of Medicare supplemental health insurance plan. A Medicare SELECT policy must meet all of the same requirements that a Medigap policy must meet, and it must be one of the ten standardized benefit packages (A through J). The only difference is that with Medicare SELECT, you must use hospitals and doctors within a network to be eligible for full benefits. (Emergencies are an exception.) Medicare SELECT policy premiums are usually lower because of this restriction.

Medicaid

Medicaid Title XIX of the Social Security Act is a program that provides medical assistance for certain individuals, such as children, the aged, the blind, the disabled, and people who are eligible to receive other federal assistance. It is a joint federal and state health insurance program, developed to assist states in providing adequate medical care to eligible needy persons. The federal government set broad national guidelines for states to use in designing their Medicaid programs. Each state, however, can do the following:

- Establish its own requirements for eligibility

- Decide on the type, amount, length, and range of services

- Set the rate of payment for services

- Administer its own Medicaid program

With the states’ flexibility in setting up the details of their own Medicaid plans, plans vary a great deal from state to state, as well as within each state over time. So if you move to another state, don’t assume that you automatically meet the new state’s Medicaid eligibility requirements. You may have to reapply for Medicaid coverage; acceptance may take two or three months. If you have a gap in coverage between the old and new plans, you are responsible for any expenses that you incur.

If you qualify for both Medicare and Medicaid, Medicaid covers most of your health care costs. Always send your medical bills to Medicare first. Medicare sends the unpaid part of the bill to your state Medicaid program for additional payment.

States determine eligibility for Medicaid by examining a person’s disability or age and financial need. You may have to reduce your assets to the allowable limits, which is called spending down. Because Medicaid is based on financial need, Medicare is considered a resource that you must use before Medicaid kicks in.

When you apply for Medicaid, be ready to reveal all your assets and sources of income. Not telling the state about all your assets is fraud, which is subject to criminal penalties. If your income is limited as defined by your state Medicaid may help pay for Medicare premiums, deductibles, and coinsurance.

Medicaid offers some assistance in various categories of dual eligibles. Dual eligibles are individuals who are entitled to Medicare Part A and/or Part B and are eligible for some form of Medicaid benefit.

Medicaid has eight categories of dual eligibles, defined by criteria such as Medicare eligibility, income level, and the dollar amount of resources in relation to Supplemental Security Income (SSI). (SSI is a social assistance program that pays monthly cash benefits to individuals who are at least 65, or who are blind or disabled, and who have limited income and resources.)

If you receive Supplemental Security Income (SSI) payments from Social Security, you are eligible for Medicaid. Contact your state Medicaid office for application information. In addition, contact your state or local welfare, social service, or Medicaid agency for more information about whether you qualify for financial help. You may find the appropriate telephone numbers in a “government” section of your local telephone directory under “Health and Human Services”; if not, call directory assistance. State Medicaid toll-free numbers are listed on the Web.