October 2013

A Medicare Supplement (a.k.a Medigap) plan is an insurance policy that assists, or supplements the benefits in Original Medicare Part’s A and B. It doesn’t have anything to do with Medicare Advantage or your Part D prescription coverage — it only works with Original Medicare Part’s A and B.

As I mentioned in the article that compared Original Medicare and Medicare Advantage, there is some cost-sharing in Original Medicare in the form of deductibles, co-pays and coinsurance. The job of the Medigap plan is to eliminate some, or all of that cost-sharing.

It’s also important to understand what Medigap plans don’t cover. In general, they don’t cover dental, hearing, or vision, and they don’t cover prescription drugs either however in some cases Part B and your Medigap will cover drugs related to serious diseases like cancer and/or H.I.V..

Similar to Advantage plans, some (but not many) Medigap plans also offer a health club reimbursement feature.

Medigap plans revolve around Medicare Part B meaning that when you take Part B you should also enroll in the Medigap plan at that time (unless you have other coverage like group employer coverage, retiree coverage, TriCare, or Medicaid)

Why?

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Just like any other bill that’s ever been passed by any president, Democrat or Republican, the Affordable Care Act, also known as “Obamacare” has it’s good parts and it’s bad parts. Almost every time I do a Medicare 101 program, one of the most commonly asked questions is, “How does Obamacare affect Medicare?”

This is obviously a very hot topic as it relates to Medicare eligible seniors, and with the new health insurance market places taking effect on October 1st, I thought I would take some time here and go over exactly what impact “Obamacare” has on Medicare. There is a lot in this bill, but for now, I’m going to focus on the components that should show the biggest cost savings in Medicare.

The first thing you need to understand is that Medicare is not a part of the new health insurance marketplaces. The marketplaces are for individual coverage, not Medicare, or Medicare Advantage.

Despite rumors and speculation that Medicare will be destroyed or gutted by “Obamacare”, it will actually improve Original Medicare, and prolong the life of the Medicare Trust Fund which has most recently been reported by several outlets to have been extended to 2029 with the recent improvements which have already begun to lower the costs.

Several things in this bill make these improvements possible. Let’s take a look.

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