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Who Needs Medicare Supplement Insurance

  
  
  

Medicare beneficiaries fill in Medicare's coverage gaps in a number of different ways, including:

  • Government Programs (Medicaid/QMB/SLMB);

  • Group Retirement Policies (Non-Standardized);

  • Non-Standardized Individual Medigap Policies (Issued Prior to July 31, 1992);

  • Standardized Individual Medigap Policies (Issued After July 31, 1992).

Medicare beneficiaries who are also eligible for Medicaid (Title 19) do not need Medigap insurance since Medicaid will cover the cost of their health care expenses.  People who do not qualify for Medicaid but are within 100% of the federal poverty level are eligible for coverage under a program known as the Qualified Medicare Beneficiary Program (QMB).  QMB program benefits include:

  • Payment of Medicare premiums.

  • Payment of Medicare annual deductibles.

  • Payment of Medicare coinsurance amounts.

Thus individuals who qualify for the QMB program generally also do not need, and should not pay for, Medicare Supplement Insurance.  The qualifying income figures change in April each year.  Contact the Department of Social Services office in your area to find out more about Title 19 and QMB eligibility and enrollment.

Individuals who do not qualify for QMB because of excess income may qualify for the Specified Low-Income Medicare Beneficiary Program (SLMB) or Qualified Individual Program (QI).  People who have incomes within 120% - 135% of the federal poverty level are eligible for SLMB or QI coverage.  However, SLMB and QI only pay for the Medicare Part B monthly premium.  Therefore, SLMB and QI individuals may still want to purchase Medigap insurance if they can afford to do so.  Like QMB, the qualifying income figures change in April each year and the programs are administered by the Department of Social Services.

Some employers offer health insurance coverage to their retirees. Retirees who are covered by such group plans may not need to purchase an individual policy.  While a retiree may choose to switch to an individual plan, this may not be a good choice because group retiree plans usually do not cost anything to the individual and the group coverage is often as good or better than most individual Medigap policies.  Thus the individual should compare his company's policy costs and coverage with the ten Medigap policies.  The retiree should also consider the stability of his company.  If it is conceivable that the company will falter, that his costs will rise, or that coverage will diminish, the individual may wish to purchase an independent policy.  Remember, however, that if a new policy is purchased the old policy must be dropped.

Most Medicare beneficiaries are not eligible for Medicaid or QMB, however, and may want to obtain Medigap insurance.  Approximately two-thirds purchase Medigap policies.  As of July 31, 1992, Medigap policies were standardized throughout the United States.  This mandatory standardization was a result of legislation passed by Congress through the Omnibus Budget Reconciliation Act of 1990.  There are ten specific benefit plans which federal law permits to be sold as Medigap policies. Two new plans were added in 2006.  States may allow all or some of these plans to be marketed. Insurance companies may sell all or some of the plans which the individual state allows them to market.  However, there is a basic benefit package, known as the "core benefit" plan, which must be allowed in all states and which must be offered by any company which sells Medigap insurance.

Although individual Medigap policies have been standardized since 1992, some seniors are still covered by previously issued non-standardized plans. These policies are no longer available for purchase.  However, individuals may continue to keep their old policies and many people have chosen to do so.  Individuals covered by an old policy should consider changing to a new "standardized" plan, and should compare the benefits and costs of each of the policies.  Then an informed decision can be made.  An individual who purchases a new standardized policy can only have one Medigap policy and must therefore drop the old, non-standardized plan.  This protects people from the unnecessary costs of duplicate coverage.