Jeffrey Wade
Medicare Supplement Insurance, also known as Medigap, is extra insurance provided by private health insurance companies to help cover out-of-pocket costs associated with Original Medicare (Part A and Part B). CMS, the Centers for Medicare & Medicaid Services, plays a crucial role in regulating and overseeing Medicare Supplement Insurance plans, such as Medigap. CMS ensures that Medicare Advantage plans, which are provided by private companies as an alternative to Original Medicare, adhere to specific standards and requirements. This includes verifying the quality of providers in their networks and addressing excessive compensation practices to prioritize enrollee healthcare needs. CMS also mandates outreach efforts to ensure enrollees are aware of their supplemental benefits, such as the Mid-Year Enrollee Notification of Unused Supplemental Benefits. These regulations aim to protect consumers and promote informed decision-making in the Medicare Advantage marketplace.
| Characteristics | Values |
|---|---|
| Name | Medicare Supplement Insurance, or Medigap |
| Regulator | CMS (Centers for Medicare & Medicaid Services) |
| Purpose | Helps pay your share of out-of-pocket costs in Original Medicare |
| Requirements | Must have Original Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) |
| Policy Standardization | Policies are standardized, with benefits being the same across insurance companies |
| Plan Names | Named by letters, like Plan G or Plan K |
| Additional Benefits | Supplemental coverage can include benefits not offered by Original Medicare |
| Medicare Advantage | Requires outreach efforts to ensure enrollees are aware of supplemental benefits |
| Agent Compensation | CMS sets a clear, fixed amount to prevent steering based on financial interests |
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What You'll Learn
Medicare Supplement Insurance (Medigap)
Medicare Supplement Insurance, also known as Medigap, is extra insurance that you can purchase from a private health insurance company. Medigap helps to pay your share of out-of-pocket costs in Original Medicare (Parts A and B). Original Medicare is federal health insurance for individuals aged 65 and older and some people under 65 with certain disabilities or conditions.
Medigap policies are standardized, and in most states, they are named by letters, like Plan G or Plan K. The benefits offered in each lettered plan are the same, regardless of the insurance company. When you first sign up for Medicare, or during certain times of the year, you can choose to get a Medigap policy to help cover your out-of-pocket costs, like coinsurance.
It's important to note that you generally must already have Original Medicare (Part A and Part B) to be eligible to purchase a Medigap policy. Additionally, Medicare Advantage, a Medicare-approved plan offered by private companies, provides an alternative to Original Medicare and may include supplemental benefits.
Medigap policies are regulated by the Centers for Medicare & Medicaid Services (CMS), which aims to ensure that enrollees are aware of the supplemental benefits available to them and that their healthcare needs are met. CMS provides resources and publications, such as "Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare," to help individuals understand their options and make informed decisions about their healthcare coverage.
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Medicare Advantage plans
There are several types of Medicare Advantage plans:
- Health Maintenance Organizations (HMOs)
- Preferred Provider Organizations (PPOs)
- Special Needs Plans (SNPs)
- Medicare Medical Savings Accounts (MSAs)
- Private Fee-for-Service Plans (PFFS)
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Supplemental benefits for the chronically ill
Medicare Supplement Health Insurance, also known as Medigap, is regulated by the Centers for Medicare & Medicaid Services (CMS). CMS has implemented various regulations and initiatives to enhance Medicare Advantage plans and supplemental benefits for the chronically ill.
The Bipartisan Budget Act of 2018 authorized Medicare Advantage plans to offer Special Supplemental Benefits for the Chronically Ill (SSBCI). These benefits are exclusively provided to eligible enrollees with chronic illnesses and are expected to improve or maintain their health and overall function. The SSBCI Leadership Circle, a group of experts across various fields, guides research and policy development to expand access to these benefits.
Medicare Advantage plans address social determinants of health, including food insecurity and inadequate access to transportation. However, low utilisation of supplemental benefits has been observed, prompting CMS to mandate outreach efforts. This ensures enrollees are informed about their available supplemental benefits through a "Mid-Year Enrollee Notification of Unused Supplemental Benefits."
To enhance enrollee experience, CMS is also cracking down on excessive compensation and bonus arrangements that may influence agents and brokers to prioritise their financial interests over the healthcare needs of prospective enrollees. By redefining "compensation" with a clear, fixed amount, CMS aims to ensure that agent and broker compensation reflects legitimate activities, promoting competitive and consumer-centric practices.
Additionally, Medicare Advantage plans must verify that their network providers have served a minimum number of patients and include telehealth providers for additional behavioural health benefits. These initiatives aim to improve access to care and ensure that supplemental benefits meet the diverse needs of individuals with chronic illnesses.
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Medicare Advantage and Part D plans
Medicare Advantage, also known as Part C, is a type of Medicare health plan offered by Medicare-approved private companies that must follow the rules set by Medicare. It is an alternative to Original Medicare for health and drug coverage. Most Medicare Advantage Plans include drug coverage (Part D). Medicare Advantage plans can be disenrolled for several reasons, such as moving outside the plan's service area, losing Medicare or Medicaid eligibility, joining a drug plan, or if the plan's contract with Medicare ends.
Medicare Advantage plans offer benefits that Original Medicare doesn't, such as covering new supplemental benefits for the chronically ill. These benefits include food insecurity or inadequate access to transportation. To ensure that enrollees are aware of these supplemental benefits, the final rule requires Medicare Advantage plans to engage in outreach efforts. From June 30 to July 31 of the plan year, enrollees will receive a personalized notification of any supplemental benefits they have not accessed in the first six months.
Additionally, CMS is addressing excessive compensation and bonus arrangements offered by plans to agents and brokers, which may result in individuals being steered towards certain Medicare Advantage and Part D plans based on financial interests rather than healthcare needs. CMS is redefining "compensation" to set a clear, fixed amount that agents and brokers can be paid, regardless of the plan the individual enrolls in.
Medicare Advantage plans must independently verify that any provider they add to their network has furnished or will furnish services to at least 20 patients within a 12-month period. This can be determined using data such as prescription drug claims data, electronic health records, or Medicare Advantage plan claims data. CMS is also adding an Outpatient Behavioral Health facility specialty to the list of specialty types, which will receive a 10% credit toward meeting time and distance standards. The Medicare Advantage organization must include one or more telehealth providers of that specialty type to provide additional telehealth benefits for covered services.
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Original Medicare and supplemental coverage
Original Medicare is federal health insurance for anyone aged 65 and older, as well as some people under 65 with certain disabilities or conditions. It is made up of Part A (Hospital Insurance) and Part B (Medical Insurance). You can join a separate Medicare drug plan (Part D) to get Medicare drug coverage.
Medicare Advantage is a Medicare-approved plan from a private company that offers an alternative to Original Medicare for health and drug coverage. It is one of the two main ways to get your Medicare coverage. The other is Original Medicare.
Medicare Supplement Insurance, also known as Medigap, is extra insurance you can buy from a private health insurance company to help pay your share of out-of-pocket costs in Original Medicare. Generally, you must have Original Medicare – Part A and Part B – to buy a Medigap policy. You will have to pay the monthly Medicare Part B premium, as well as a premium to the Medigap insurance company. As long as you pay your premium, your Medigap policy is guaranteed renewable.
Medigap policies must follow Federal and state laws. These laws protect you. The front of a Medigap policy must clearly identify it as “Medicare Supplement Insurance.” It is important to compare Medigap policies, as costs can vary. The standardized Medigap policies that insurance companies offer must provide the same benefits. Generally, the only difference between Medigap policies sold by different insurance companies is the cost.
CMS is responsible for regulating Medicare Supplement Insurance (Medigap) policies. They ensure that Medigap policies follow Federal and state laws and provide important information and resources for beneficiaries, such as a guide to choosing a Medigap policy and answers to frequently asked questions.
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Frequently asked questions
Medicare Supplemental Insurance is extra insurance that can be purchased from a private health insurance company to help pay for out-of-pocket costs in Original Medicare (Part A and Part B).
Yes, Medicare Supplemental Insurance, also known as Medigap, is regulated by the Centers for Medicare & Medicaid Services (CMS). CMS ensures that Medicare Advantage plans comply with regulations and provide enrollees with the supplemental benefits they are entitled to.
CMS has implemented various regulations for Medicare Supplemental Insurance. For instance, they require Medicare Advantage plans to engage in outreach efforts to ensure enrollees are aware of their supplemental benefits. Additionally, CMS addresses excessive compensation and bonus arrangements offered by plans to agents to prevent steering enrollees towards certain plans based on financial incentives rather than healthcare needs.
You can call 1-800-633-4227 to request a free copy of the "Choosing a Medigap Policy" guide, which provides information about Medicare Supplemental Insurance and CMS regulations. You can also contact your State Health Insurance Assistance Program (SHIP) and State Insurance Department for more details.
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