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Understanding Medicare Supplements: The Basics of Medigap

Medicare covers many health essentials for citizens sixty-five and older but it does not cover everything. Particularly for those with more complex medical histories (or futures), Original Medicare (Parts A and B) is often not enough as they move into their golden years of retirement. This is where understanding Medicare Supplements, or Medigap insurance policies come into play.

What is it?

Medigap is essentially extra insurance. Beneficiaries can buy extra insurance policies from private carriers to help pay their share of the out-of-pocket expenses that come with Original Medicare. Original Medicare is funded by the federal government.   The federal government also contracts with private carriers to ensure that their Medigap policies are safe, uniform, and sufficient. Beneficiaries must have Original Medicare in order to buy a Medigap policy. This means they must sign up for Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) to be eligible to purchase Medigap.

As previously mentioned, the insurance carriers that provide Medigap policies are contracted with the United States government. This means that the carriers must meet certain guidelines in order to keep their contract each year and continue to sell these policies. All Medigap policies are standardized, meaning that they all cover the same basic health benefits regardless of which company they were purchased from or which state the beneficiary lives in. There are ten different types of Medigap policy, and they are distinguished by letters (A, B, C, etc.). Price is the only difference between carriers’ plans of the same letter. This means that plans with the same letter offer the same coverage regardless of carrier. It is important to note, however, that in Massachusetts, Minnesota, and Wisconsin, the plans are standardized in a different way. Despite this, every Medigap policy must follow state and federal laws to protect their beneficiaries.

What does it cover?

The benefits of each Medigap plan differ (again, usually by letter, or tier), but they are all designed to do one thing: help cover the beneficiary’s share of costs from Medicare Parts A and B. This means Medigap policies can help cover co-payments, coinsurance, and deductibles. Some Medigap policies can cover services that Original Medicare doesn’t cover, like emergency medical care outside of the United States.

What’s not covered?

Medigap can’t cover everything that Medicare Parts A and B doesn’t. Some of the services that are not covered under Medigap policies are long-term care, vision or dental care, hearing aids, eyeglasses, and private nursing. Medigap plans that were sold after 2005 do not include prescription drug coverage, and beneficiaries can opt in to Medicare Part D for that kind of coverage.

Understanding Medicare Supplements – Agent Resources

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Prescription Drug Help in Connecticut

Prescription drugs are often life-saving, essential aspects of comprehensive health care. However, they can be cost prohibitive, particularly if the patient is expected to use them long-term, and not every health insurance plan provides coverage for them. Here are six ways that Connecticut residents can get help with their prescription drug costs:

Medicaid (Husky Health)

The state of Connecticut has a Medicaid program called Husky Health Insurance that provides prescription expense assistance for those who qualify. Typically, those people are low-income adults and children, as well as pregnant women. There is a portal to visit to qualify for prescription drug assistance, known as Husky Pharmacy Assistance, and most enrollment for Husky Health can be done through AccessHealthCT.

Medicare Part D

Also known as Medicare Rx, Medicare Part D is the part of Medicare that provides prescription drug and pharmacy coverage to its beneficiaries. It is offered through private companies, but those carriers must partner with the federal government and meet their requirements for plans every year to be allowed to provide Medicare Part D plans. The program is not required, but encouraged for those aged sixty-five and above. There is a penalty for people who do not have sufficient or comparable prescription drug coverage, as well, but decline Medicare Part D. More information can be found at Medicare’s government website.

Low Income Subsidy (LIS) for Medicare Part D

Because Medicare Part D is provided by private carriers, the premiums deductibles, and copays can vary with the type of plan selected. Beneficiaries with limited income may be eligible for further assistance called the Low Income Subsidy. This is a subsidy that pays part of or all of the expenses associated with Medicare Part D premiums. Only those with limited assets or low fixed income will qualify for this subsidy.

Free or Low Cost Prescription Programs

These programs are also known as patient assistance programs. To qualify for these programs, beneficiaries must have no insurance, have low income, and not be eligible for a government assistance program like Medicaid, which would otherwise pay for part or all of the prescription drug costs. One of these programs is called the Partnership for Prescription Assistance. More programs can be found here.

Discount Prescription Programs

Some bigger box stores, such as grocery stores, that have pharmacies offer lower cost prescription drugs because they can procure them at discount prices, particularly the generic versions of popular prescriptions. Not all generics are covered, but some stores that do this include Big Y, CVS, and Walmart. Some hospitals also offer these generics discounts, such as Saint Raphael in New Haven or Saint Vincent Medical Center.

Online or Mail Order Prescription Programs

The popular medical advice website WebMD offers information on how to obtain prescription drugs through the internet or mail services.

In Connecticut, there are many ways that residents can access assistance with their prescription drug costs. Help is available for premiums, copays, deductibles, or simply the cost of the medication itself.

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Short-Term Medical Insurance

Short-term medical insurance is not available nationwide. It is, however, available in Connecticut, but on very limited terms. Health insurance coverage that lasts less than twelve consecutive months is Short-term medical  insurance. Individuals can extend and renew for up to thirty-six months. Connecticut is also one of the few states in which it is illegal to deny a person coverage due to a preexisting condition.  Unfortunately, no insurance carriers offer such terms for short-term coverage. Therefore, individuals obtain short-term medical insurance three main ways in this state.

Affordable Care Act Plans (ACA)

Through what is known as Obamacare, people can sign up for a health insurance plan using Connecticut’s Health Insurance Marketplace (AccessHealthCT). The carriers that offer plans through this marketplace are Anthem Blue Cross Blue Shield and Connecticare Benefits, Inc. There are five levels of coverage.  Four are named after metals: bronze, silver, gold, platinum, and then catastrophic coverage. Each level covers a different percentage of essential health services.

Generally speaking, bronze will cover 60%, silver will cover 70%, gold will cover 80%, and platinum 90%. Catastrophic coverage has a low monthly premium but offers the lowest amount of coverage. Tax credits based on income are applied to the health insurance plan premium to help cover the cost, and there is special enrollment, which means that major life events qualify residents for enrolling outside of the normal enrollment period. Some qualifying events are a marriage or divorce, birthing or adopting a child, and job change.

COBRA

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. This act  offers coverage to those who leave a job with employer-offered coverage.  Individuals no longer employed buy that plan. That being said, the premiums are likely to go up considerably because the employer is no longer subsidizing them. Former employees are only disqualified from COBRA if they are fired for something egregious, or gross misconduct. The former employer must be notified if the former employee wants to use COBRA to continue in their health insurance plan and that plan can be extended for up to thirty-six months from the job change or termination.

Medicaid – Short-Term Medical Insurance

Medicaid is a state program that is available to pay for health insurance for residents who cannot pay for it themselves. There are a variety of reasons that someone would qualify for Medicaid.

• Adults ages 19-64 who are low-income and not eligible for Medicare

• Pregnant women and infants

• Children up to age 18

• Parents and caretaker relatives

Applicants can apply through their Department of Social Services or through AccessHealthCT.

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Sell Medicare All Year

What Happens After AEP? Learn to sell Medicare all year.

The AEP, or Annual Enrollment Period, is one of the busiest times of the year for Medicare insurance agents and agencies. It can be draining and exciting all at once. Annual Enrollment Period is the period of time when beneficiaries are eligible to sign up for Medicare insurance, and it runs from October 15 to December 7 each year. The new coverage choices that people make during the AEP go into effect on January 1 of the following year. Choices made in the AEP of this year, 2023, will be effective on January 1 2024.   Learn to sell Medicare all year.

As a single agent or broker or as part of an agency, it is important to do three things after making it through another annual enrollment period.

Celebrate Accomplishments

Look at what worked out in favor of the agency/agent this year. Enrollments, for example: How many were successful? Of those, which strategies worked well in getting beneficiaries to enroll in an insurance plan that fit their needs? Being as specific as possible about what worked well and what did not can help make the process more seamless and bring in more revenue in the following year.

Other things to consider are leads: where did the bulk of the leads that resulted in enrollments come from this year? Was it a new channel or was it with previously-known contacts?

Look at Opportunities for Improvement

No matter how well an agent or team did over AEP, there is always room for improvement. Two very common areas that agents report wanting to improve in are time management and carrier options.

Time management can be difficult over such a busy time like the annual enrollment period. If an agent takes meetings all day, things like marketing, returning emails and calls, and paperwork can be neglected and vice versa. One way to streamline the process of enrollment for busy periods is to identify which activities are taking up the majority of the time in the office. Then, agents can redistribute resources to ensure that time is more equitably spent across several activities rather than one.

Having access to multiple carrier options can be vital for closing deals during the annual enrollment period. After all, the purpose of selling Medicare insurance is to connect beneficiaries with the best plan for their individual needs. After AEP is over is an excellent time to determine whether or not the agency or agent wants access to further insurance carrier options next time around.

Regroup for Next Enrollment Period

The lull between enrollment periods can be a great time to regroup for the next round. Many agencies like to consider this as an opportunity to work on weaknesses, begin following up with clients, create new or improved marketing strategies, and re-educate themselves on Medicare Advantage compliance rules.

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