Illinois Insurance Facts Illinois Department of Insurance MEDICARE SUPPLEMENT INSURANCE
	Revised March 2008

What is Medicare?

Medicare is a federal health insurance program for people 65 or older, some people under 65 with disabilities, and people with end-stage renal disease or Lou Gehrig’s disease. If you are on Medicare, it will pay for much – but not all – of your health care.

What is Medicare Supplement Insurance?

Medicare supplement insurance fills the “gaps” between Medicare benefits and what you must pay out-of-pocket for deductibles, coinsurance, and copayments. Therefore, it is often called Medigap insurance. Medigap policies are sold by private insurance companies that are licensed and regulated by the Illinois Department of Insurance. Medigap policies only pay for services that Medicare deems as medically necessary, and payments are generally based on the Medicare-approved charge. Some plans offer benefits that Medicare doesn’t, such as emergency care while in a foreign country.
There are 12 standardized Medicare supplement insurance plans, labeled “A” through “L.” Each plan offers a different combination of benefits. Plans F, J, K, and L offer a high-deductible option. Each insurance company must use these same identifying letters. All companies that sell Medigap insurance must offer Plan A, but do not have to offer the other 11 plans

Your Rights as a Medicare Supplement Consumer

Open Enrollment Seniors:

Medigap companies must sell you a policy – even if you have health problems – if you are at least 65 and apply within six months after enrolling in Medicare Part B. These six months are called your “open enrollment” period. During open enrollment, a company must allow you to buy any of the Medigap plans it offers. You can use your open enrollment rights more than once during this six-month period. For instance, you may change your mind about a policy you bought, cancel it, and buy any other Medigap policy within six months of enrolling in Medicare Part B.
Although a company must sell you a policy during your open enrollment period, it may require a waiting period of up to six months before covering your pre-existing conditions unless you have had other health coverage (“creditable coverage”) for at least 6 months on the day you apply. Pre-existing conditions are conditions for which you received treatment or medical advice from a physician within the previous six months.
Your right to open enrollment is absolute beginning when you enroll for Medicare Part B, even if you wait for several years after you become 65 to enroll in Medicare Part B because of continued employment or other reasons.

Open Enrollment Under 65 and Disabled:

With the passage of Public Act 95-0436, persons under 65 with disabilities who become eligible for Medicare will have additional rights.  Beginning June 1, 2008, Illinoisans under age 65 who receive Medicare because of disabilities have the same open enrollment rights as seniors. That is to say, a person under 65 who qualifies for Medicare because of disabilities and who applies for a Medigap policy within six months after enrolling in Medicare Part B has a six-month open enrollment period beginning the day they enroll in Medicare Part B. During open enrollment, a company must allow you to buy any of the Medigap plans it offers. This right is also available for persons who are retroactively enrolled in Medicare Part B due to a retroactive eligibility decision made by the Social Security Administration if they apply within 6 months after receiving notice of retroactive eligibility.
Open enrollment will apply to all under 65 Medicare eligible individuals even if they have existing Medicare supplement insurance. If you fit this description you will be able to choose from any plan offered by companies selling Medicare Supplement insurance in Illinois until December 1, 2008.
Loss of Other Coverage.  In addition, if you are under 65 and on Medicare, but declined a Medigap policy because you were still covered under an employer group health plan, you will have a 63 day open enrollment period if the employer plan terminates or ceases to provide health benefits that supplement Medicare. Similarly, if you are either currently enrolled in a Medicare Advantage plan or have a Medigap policy and the insurance company goes out of business, withdraws from the market, or misrepresented the product you purchased, you also will be eligible for a 63 day open enrollment period under most circumstances (see Guaranteed Issue Right below).
Cost of Coverage.  For persons under 65 that become eligible to purchase a Medigap policy, companies may not be charge a rate higher than the highest rate on the company’s current rate schedule filed with the Illinois Department of Insurance.

Guaranteed Issue Right

You may have the right to buy a Medigap policy outside of your open enrollment period if you lose certain types of health coverage. Both for people over age 65 and the under 65 disabled, the guaranteed issue right applies to Medigap plans A, B, C, F, K, and L. In general, the guaranteed issue right is valid for 63 days from the date coverage ends or from the date of notice that coverage will end. Companies may not place any restrictions, such as pre-existing condition waiting periods or exclusions, on these policies. This is called “guaranteed issue.”

30-Day “Free Look”

You can return your Medigap policy within 30 days after receiving it and get your money back with no questions asked. Be sure to keep a record of the date you received the policy. Read the policy as soon as you get it. If you return the policy to the company, use certified mail with a return receipt as proof that it was returned within the 30-day time limit.

Renewability

All Medigap policies are guaranteed renewable. A company cannot cancel your policy or refuse to renew it unless you made intentional false statements on your application or failed to pay your premium. However, the amount of the premium is not guaranteed. An insurance company may raise your premium as often as once a year on a class basis. In addition, if you have an “attained-age policy,” a company may raise your premium on your birthday.

Medicare Supplement Claims

Your doctor and other health care providers must submit Medicare claims to the appropriate carrier or fiscal intermediary for you. In most cases, the carrier or intermediary will send your Medigap claim directly to your insurance company. You should not receive a bill from your provider. If you receive a bill, review your Medicare Summary Notice to determine why.
Medigap policies won’t pay for services that Medicare does not deem medically necessary. You have the right to appeal the decision to deny a claim. The appeals process and deadline to request an appeal are described in your summary notice.

Does Everyone Need a Medicare Supplement Policy?

Not everyone needs a Medicare supplement policy. If you have certain other types of health coverage, the gaps in your Medicare coverage may already be covered. You probably don’t need Medicare supplement insurance if

Shopping Wisely for Medigap Insurance

Protect Yourself

Unfair Practices

Agents and companies who engage in any of the following practices may not be acting appropriately:

If you believe that an agent or company has used unfair practices with you, file a complaint at the following website:
http://www.idfpr.com/DOI/Complaints/Complaints.asp

Medicare Basics

Medicare Part A (hospital) pays for in-patient hospital services, skilled nursing facility care after a hospital stay, home health care, and hospice care. Medicare Part A also pays for all but the first three pints of blood each calendar year.
Medicare Part B (medical) pays for medical expenses, clinical laboratory services, and outpatient hospital treatment. In most cases, Medicare pays 80 percent of the Medicare-approved cost of covered services.
Covered medical expenses include physicians’ services and supplies. Some Medicare Part B services are paid as a fixed copayment under the outpatient prospective payment system.
Medicare also pays for some preventive health services. Ask your physician about screening tests, flu shots, and vaccines covered by Medicare.
Medicare Part D (prescription drug coverage) pays for generic and brand name prescription drugs. You can receive prescription drug coverage by joining a stand-alone prescription drug plan that adds the coverage to a Medicare plan or by purchasing a Medicare Advantage plan that includes the coverage. Only private insurance companies approved by Medicare can offer the coverage.
Medicare Advantage.  You may have the option to join a Medicare Advantage plan (formerly called Medicare + Choice or Medicare Part C). CMS enters into annual contracts with insurance companies and managed care plans to provide Medicare Advantage coverage. Medicare Advantage plans include health maintenance organizations (HMOs), preferred provider plans (PPOs), private fee-for-service plans (PFFS), special needs plans, and medical savings accounts.
You can only join a Medicare Advantage plan if a plan is available in your area and you have Medicare Part A and Part B. Some plans may have additional eligibility requirements. Plans provide their members with a handbook upon enrollment that outlines the complaints and appeals process for denial of services.
Medicare Advantage plans might offer additional benefits and be cheaper than original Medicare. However, they’re not right for everyone. Your choice of providers in a Medicare Advantage plan may be restricted. Some plans will require you to use doctors and other providers in their “networks” for routine, nonemergency care. For other types of plans, your providers must agree to accept the plan’s terms and conditions before treating you.

For Further Information on Medicare or Medigap:

To determine a Medicare Supplement Carrier please click below for the 2008 Medicare Supplement Premium Comparison Guide;

http://insurance.illinois.gov/medsup/default.asp

Write or call us at:
Senior Health Insurance Program
Illinois Department of Insurance
320 West Washington Street
Springfield, Illinois 62767-0001
1-800-548-9034 (tollfree in Illinois)
217-785-9021 (outside Illinois)
217-524-4872 (TDD)
Or drop us an e-mail at:
FPR.SHIP@Illinois.gov

To file a complaint or for company information call:
The Office of Consumer Health Insurance (OCHI)
Illinois Department of Insurance
320 West Washington Street
Springfield, Illinois 62767-0001
(877) 527-9431