Medigap Changes That Could Affect You

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WASHINGTON D.C. (TheStreet) – In July 2008 the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) was approved by Congress. Part of the act covered Medigap and introduced some changes effective June 1, 2010. The changes will only affect existing policyholders at the point of their annual renewal.

Medigap is "health insurance sold by private insurance companies to fill the 'gaps' in Original Medicare Plan coverage," according to the Medicare Web site.

One change affecting everyone is an additional benefit included with the basic coverage offered under all Medigap plans. If you take out a Medigap policy on or after June 1, 2010, coverage will include the amount of cost sharing for all Part A Medicare eligible hospice care and respite care expenses.

Prior to the implementation of the new coverage, only those with the high deductable plans K and L received any benefit for this expense, with 50% and 75% coverage of the cost sharing amount respectively. The benefit for plans K and L will remain at the levels before June 1, 2010. You will not gain this benefit if you choose to retain your current plan with the existing benefits.

Other changes were included that could affect your decisions about your choice of Medigap plan. As of June 1, 2010, four plans will be discontinued, two plans will have changes made to the coverage in addition to the hospice and respite care coverage already discussed, and two new plans will be added.

Plans E, H, I and J will be discontinued. This means that, beginning June 1, 2010, these plans will no longer be available for you to purchase. Existing holders of a policy with these plans will be able to renew the same policy when it falls due, but only if the provider continues to offer the plan. If your provider decides not to continue to offer your plan you will not be able to obtain one of the discontinued plans even if you hold a policy for one of the other discontinued plans.

Plans D and G will no longer offer at-home recovery, as a benefit after June 1, 2010. This benefit was previously also available under plans I and J, and as they are discontinued the benefit will only continue to be available to holders of policies with plans D, G, I and J in effect prior to June 1, 2010.

Previously, Plan G offered coverage of 80% of the Part B excess. Beginning June 1, 2010, the coverage is increased to 100% of the Part B excess. If you currently hold a Plan G policy you will not be able to obtain the benefit of this change on renewal unless you give up the at-home recovery portion of your existing plan. Essentially you can either retain the benefits of the existing plan or you can accept the changes and have the benefits of the new Plan G.

Two new plans, M and N are to be introduced on June 1, 2010.

Plan M is similar to Plan D except that only 50% of the Medicare Part A deductible is covered. In addition to 100% coverage of the Part B co-insurance, skilled nursing facility care and medically necessary emergency care in a foreign country are covered.

Plan N is also similar to Plan D, except that it requires co-payments of up to $20 for each covered health care provider office visit (including visits to medical specialists); and up to $50 for each covered emergency room visit. The ER co-payment is waived if you are admitted to the hospital.

If you are thinking about changing your plan you should consider doing it very carefully. Once you change your plan you cannot go back to your previous plan if it is not available to new policyholders.

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