Medicare Products

Medicare products (Supplement, Medicare Advantage and Drug) are designed to enhance the Federal insurance program (Traditional or Original Medicare) consisting of PART A:Hospital, PART B:Medical, PART C:Medicare Advantage and PART D:Prescription Drugs. Within the products, there are several types and within those types, several variations.  All designed to allow beneficiaries to elect the products to enhance coverage for their situation. My agency has offerings in all product groups (see the Disclaimer).  In general, there are three product groupings.

Medicare allows approved materials to be used in the media for which they are approved.

Medicare does not allow cold calling (meaning without permission) telephone contact or in-person.  Medicare does not allow high pressure tactics or misrepresentation.  After being acceptably approached by those with whom you do not have an existing business relationship, once you engage, Medicare takes the position, that you give your permission to be solicited. 

Supplement plans, aka Medigap (as titled by Medicare)are paid premium in advance to have your cost share paid by insurance company when you incur charges.  They are designed to pay your share of Original Medicare benefits under PART A and PART B.  There are 10 plan variations.   Not all companies offer all the variations.  Coverages vary from covering (your share of) all of Medicare's medical benefits to specific benefits.  Premiums vary by plans, companies, age and geographic location.  More premium, more coverage.  Premiums are determined by the company which can increase monthly or annually.

The Medicare statute has a provision for insurance companies to offer plans that bundle PART A: Hospital, PART B: Medical and, most of the time, PART D: Prescription Drugs, plus, other benefits not offered by Medicare but offered by companies, all bundled together into PART C: Medicare Advantage.  There are 6 design types of these plans where most common are either HMO (see only network providers) or PPO (see anyone but lower cost for network providers).  Plans are designed for different income and health circumstances.  Plans are designed for regions and groups of counties within states.  Not all types are available everywhere.

Most plans are designed for Medicare only recipients. Another design is for those on Medicare and Medicaid.  Still another design is for those with certain chronic health conditions.  

Medicare approves, oversees and disciplines companies that offer these plans.

The way the plans work is Medicare pays a stipend to the plan in return for the plan becoming the administrator of the benefits.  The members pay a monthly premium, usually low to zero, or below zero and agree to pay a share of costs when they use the benefits.   While all benefits offered by Medicare must be offered by each plan, the cost share may vary between plans and between companies.  All plans feature, by law, an annual maximum out-of-pocket limit; a trigger amount where sum of the medical copays triggers 100% coverage for the rest of the year.  Only a small percentage of beneficiaries reach the trigger within a policy year.

Advantage Plans offer bundling your medical, drugs and additional benefits into an attractive package: medical benefits, drugs and Extra Benefits (aka 'perks'/'bennies'/'bells and whistles'/'incentives').  Remember, the reason you purchase the plan is your medical and drug coverage, not the perks. 

The Medicare Statute authorizes companies to offer plans that pay upfront funds annually to beneficiaries to use as they see fit.   The cash payment belongs to the beneficiary who is free to use the funds as they wish; there are tax implications if used for non-medical expenses.  The plan has a trigger where coverage converts to 100%.  These are a variation of Advantage plans and have specific rules.

The Medicare Statute authorizes companies to offer PART D: Medicare Rx Plans which cover Medicare approved prescription drugs using statutory provisions mandated by Congress.  Medicare uses a Master Formulary (drug list) from which each plan can select all, most or some drugs to cover in their plans.  All PART D plans follow statutory mandates.   At least 2 drugs from each category.  An annual deductible that can be waived or partially applied.  Defined coverage stages, each governed by a defined amount threshold and defined co-pays.  Here too, Medicare approves, oversees and disciplines.

Medicare takes the position that, unless you are exempt, you must enroll in Medicare when you are eligible or pay a penalty if you do not enroll within the grace period defined for that respective part of Medicare.  Medicare usually makes the insurance company collect the amount which is then paid to Medicare.

Income Related Monthly Adjustment Amount.  Should your income meet certain higher thresholds than the standard amount, set by Congress annually, you must pay a higher PART B and PART D premium.  The Plan collects the amount and forwards it to Medicare.