Why Do So Many Insurance Companies Advertise "add On" Insurance For People On Medicare?

[doran]

There's Advantra, AARP, the list goes on and on. Is there a cap or something on expenses Medicare will pay, that makes additional insurance necessary?(when you have part A&B)

[torin7]

Because there are gaps and limitations in Medicare coverage that have to be paid out of pocket       Because Medicare coverage has limitations, many people purchase supplemental insurance policies that are specifically designed to cover some of the gaps. This supplemental insurance is provided by private health insurance companies, not the government, although it is typically called Medigap. In general, you will not need a Medigap policy if your Medicare coverage is through a managed care plan or if you are qualified for Medicaid because of a low income. Specific income requirements for Medicaid eligibility are determined by individual states. In either case, your managed care plan or Medicaid generally fills the gaps in Medicare coverage. The federal government regulation of Medigap insurance generally requires that only 12 kinds of plans(Plans A through L) can be offered as Medigap plans, and that all 12 cover these services: Part A coinsurance and for the cost of 365 extra days of hospital care after Medicare coverage ends Part B coinsurance(usually 20 percent of the Medicare approved payment amount) The first three pints of blood A Plan A Medigap policy will cover only the above expenses. Plans B through L offer Plan A benefits plus some combination of these additional benefits: Coverage of your Part A deductible($1,024for each inpatient hospital stay in 2008) Coverage of your Part B deductible($135 in 2008) The daily co-payment requirement for the 21st to 100th day of skilled nursing facility care($128 per day in 2008) Eighty percent of medically necessary emergency care while you are in a foreign country, after you pay a $250 deductible All or part of Medicare Part B excess charges Coverage for at-home recovery, including assistance with daily living tasks, up to $1,600 per year Preventive medical care, up to $120 per year Coinsurance for respite care and other Medicare Part A-covered services Annual out-of-pocket maximum; pays 100 percent of Medicare Part A and Medicare Part B coinsurance, co-payments, and deductibles after out-of-pocket maximum($4,000 for Part K or $2,000 for Part L) has been reached Part A: There is no premium for eligible individuals. If you are 65, but not eligible for Medicare coverage, you may still be able to purchase it. In 2009, the monthly premium is $443(up from $423 in 2008) for an individual with 29 or fewer Social Security credits, or for a disabled individual under age 65. The premium is $244(up from $233 in 2008) for individuals with 30 through 39 credits. You must buy Parts A and B together, so you will also have to pay the Part B monthly premium, which is $96.40 in 2009(unchanged from 2008). You cannot buy Part A coverage alone. If you are admitted to a hospital as an inpatient, you will be required to pay a deductible, plus coinsurance costs after 60 days as an inpatient. In 2009, the deductible is $1,068(up from $1,024 in 2008). Coinsurance costs are $267(up from $256 in 2008) a day for days 61 through 90, per benefit period, and $534(up from $512 in 2008) a day for each lifetime reserve day used. For an explanation of deductibles, coinsurance costs, and lifetime reserve days, Here is an example; you are admitted to the hospital in January of 2009. You are required to pay a deductible of $1,068. Medicare will pay the balance of his costs for 60 days. Should you still be in the hospital after 60 days, you will then be required to pay $267/day. Medicare will pay the balance. After 90 days, his coinsurance obligation is $534/day, because you will need to use your lifetime reserve days. Medicare will pay nothing after 150 days. Part B: For 2009, the monthly premium is $96.40. There is an annual deductible of $135(unchanged from 2008), and you are also required to pay a portion of your costs, usually 20 percent of the bill.   So you can see there are areas where a Medigap policy would cover some the deductibles not covered by Medicare.  It is up to you whether you want to pay the costs yourself, or want another insurance company to help. If you have planned well for retirement and have a lot of money set aside, you might want to pay the costs yourself.  If you are still working after age 65, your employer health plan will work like a Medigap plan.  Claims would be submitted to your health plan thorough work first, and then through Medicare.   WEALTHADVISOR 62 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Rickard]

There's something known as the Donut Hole, or being in the Donut Hole.  There's a gap between where Medicare pays, and they pay initially, and then where they pick back up.  It's called being in the Donut Hole and these insurance companies sell Medicare supplements to help folk out with this.  There are so many on the market because the elderly population is composed of individual people who all have varying levels of need.  My mother's neighbor is currently in the Donut Hole.  She has a couple of serious, chronic conditions that need medical check-ups and treatment on a frequent basis.  My mother, on the other hand, is quite healthy and while she needs a supplemental policy, she can get by with the basic one for now because she's not in a position of being in the Donut Hole.  I think this gap in coverage can be experienced on an annual basis, too.  It's not a one-time thing for the life of the individual.   So, lots of medical insurance policies. I understand Humana has a good one, but it's over twice as much for some kinds of coverage as the AARP one.  I'm sure the list goes on and on.   This is a nutshell version.   I do not think the Donut Hole applies for people who qualify for both Medicare and Medicaid. 

[edoardo]

newfietom said: 1 This is the business my dad was in until he retired. The insurance companies take the MedA&B benefits and essentially give you private insurance in return with more covereage than the MedA&B provide -- and without all the paperwork and run-around those systems require. Essentially, the MedA&B benefits are converted to the company's private insurance packages. It seems like a pretty good deal based on the little I know about it, but you should be sure it will work for you before you sign up. 62 months ago

[Roland]

Very simple  Very simple.    There's very few programs the govt sets up that a crafty businessperson can't figure out how to leverage to their benefit and your loss.  All those "we can get you a motorized wheelchair" places.  "Meds delivered to your very door", and these add-on insurance plans.     There's no free lunch-- you don't get something for nothing.   The insurance company is making a profit, the TV stations make a bundle with the ads, the only one left to pay then is you.   In general anything advertised in color is not a good deal.       Ancient_Hacker 62 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Ansson]

The Dreaded Donut Hole There's something known as the Donut Hole, or being in the Donut Hole.  There's a gap between where Medicare pays, and they pay initially, and then where they pick back up.  It's called being in the Donut Hole and these insurance companies sell Medicare supplements to help folk out with this.  There are so many on the market because the elderly population is composed of individual people who all have varying levels of need.  My mother's neighbor is currently in the Donut Hole.  She has a couple of serious, chronic conditions that need medical check-ups and treatment on a frequent basis.  My mother, on the other hand, is quite healthy and while she needs a supplemental policy, she can get by with the basic one for now because she's not in a position of being in the Donut Hole.  I think this gap in coverage can be experienced on an annual basis, too.  It's not a one-time thing for the life of the individual.   So, lots of medical insurance policies. I understand Humana has a good one, but it's over twice as much for some kinds of coverage as the AARP one.  I'm sure the list goes on and on.   This is a nutshell version.   I do not think the Donut Hole applies for people who qualify for both Medicare and Medicaid.  KKChickpea 62 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Duran]

This is the business my dad was in until he retired. The insurance companies take the MedA&B benefits and essentially give you private insurance in return with more covereage than the MedA&B provide -- and without all the paperwork and run-around those systems require. Essentially, the MedA&B benefits are converted to the company's private insurance packages. It seems like a pretty good deal based on the little I know about it, but you should be sure it will work for you before you sign up.

[Finegan]

      Because Medicare coverage has limitations, many people purchase supplemental insurance policies that are specifically designed to cover some of the gaps. This supplemental insurance is provided by private health insurance companies, not the government, although it is typically called Medigap. In general, you will not need a Medigap policy if your Medicare coverage is through a managed care plan or if you are qualified for Medicaid because of a low income. Specific income requirements for Medicaid eligibility are determined by individual states. In either case, your managed care plan or Medicaid generally fills the gaps in Medicare coverage. The federal government regulation of Medigap insurance generally requires that only 12 kinds of plans(Plans A through L) can be offered as Medigap plans, and that all 12 cover these services: Part A coinsurance and for the cost of 365 extra days of hospital care after Medicare coverage ends Part B coinsurance(usually 20 percent of the Medicare approved payment amount) The first three pints of blood A Plan A Medigap policy will cover only the above expenses. Plans B through L offer Plan A benefits plus some combination of these additional benefits: Coverage of your Part A deductible($1,024for each inpatient hospital stay in 2008) Coverage of your Part B deductible($135 in 2008) The daily co-payment requirement for the 21st to 100th day of skilled nursing facility care($128 per day in 2008) Eighty percent of medically necessary emergency care while you are in a foreign country, after you pay a $250 deductible All or part of Medicare Part B excess charges Coverage for at-home recovery, including assistance with daily living tasks, up to $1,600 per year Preventive medical care, up to $120 per year Coinsurance for respite care and other Medicare Part A-covered services Annual out-of-pocket maximum; pays 100 percent of Medicare Part A and Medicare Part B coinsurance, co-payments, and deductibles after out-of-pocket maximum($4,000 for Part K or $2,000 for Part L) has been reached Part A: There is no premium for eligible individuals. If you are 65, but not eligible for Medicare coverage, you may still be able to purchase it. In 2009, the monthly premium is $443(up from $423 in 2008) for an individual with 29 or fewer Social Security credits, or for a disabled individual under age 65. The premium is $244(up from $233 in 2008) for individuals with 30 through 39 credits. You must buy Parts A and B together, so you will also have to pay the Part B monthly premium, which is $96.40 in 2009(unchanged from 2008). You cannot buy Part A coverage alone. If you are admitted to a hospital as an inpatient, you will be required to pay a deductible, plus coinsurance costs after 60 days as an inpatient. In 2009, the deductible is $1,068(up from $1,024 in 2008). Coinsurance costs are $267(up from $256 in 2008) a day for days 61 through 90, per benefit period, and $534(up from $512 in 2008) a day for each lifetime reserve day used. For an explanation of deductibles, coinsurance costs, and lifetime reserve days, Here is an example; you are admitted to the hospital in January of 2009. You are required to pay a deductible of $1,068. Medicare will pay the balance of his costs for 60 days. Should you still be in the hospital after 60 days, you will then be required to pay $267/day. Medicare will pay the balance. After 90 days, his coinsurance obligation is $534/day, because you will need to use your lifetime reserve days. Medicare will pay nothing after 150 days. Part B: For 2009, the monthly premium is $96.40. There is an annual deductible of $135(unchanged from 2008), and you are also required to pay a portion of your costs, usually 20 percent of the bill.   So you can see there are areas where a Medigap policy would cover some the deductibles not covered by Medicare.  It is up to you whether you want to pay the costs yourself, or want another insurance company to help. If you have planned well for retirement and have a lot of money set aside, you might want to pay the costs yourself.  If you are still working after age 65, your employer health plan will work like a Medigap plan.  Claims would be submitted to your health plan thorough work first, and then through Medicare.  

[Helaku]

 Very simple.    There's very few programs the govt sets up that a crafty businessperson can't figure out how to leverage to their benefit and your loss.  All those "we can get you a motorized wheelchair" places.  "Meds delivered to your very door", and these add-on insurance plans.     There's no free lunch-- you don't get something for nothing.   The insurance company is making a profit, the TV stations make a bundle with the ads, the only one left to pay then is you.   In general anything advertised in color is not a good deal.