Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, June 25, 1990 TAG: 9006230030
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: MAG POFF BUSINESS WRITER
DATELINE: LENGTH: Medium
Congress abolished the coverage last year because of an outcry over the tax surcharge imposed to finance it.
That surcharge, about 15 percent of tax liability up to a ceiling of $800, fell most heavily on more prosperous seniors.
Now people over 65, regardless of income, share equally the rising cost of medigap insurance.
Ken Schrad, spokesman for Virginia's State Corporation Commission, said most insurers filed rate increases for this year to offset the change in Medicare and the rising cost of claims.
Medigap policies fill some of the holes in the Medicare health program. None sold in Virginia can overlap any item covered by Medicare.
Three types of policies can be sold in Virginia, so it's possible to fit your purse by buying a modest Medicare supplement or by covering a high level of medical services.
Schrad said 51 companies are qualified to write the basic policy in Virginia. There are 66 that offer policies at the middle level, but only eight sell the top product.
Blue Cross-Blue Shield is the overwhelming market leader in medigap insurance, Schrad said, just as it is Virginia's primary writer of all health coverage.
The basic policy in Virginia covers the share of hospital charges that Medicare will not pay: $148 daily for 61 to 90 days and $296 a day for 91 to 150 days. Medicare's lifetime limit is 150 days.
It also picks up 90 percent of eligible hospital expenses from the 151st day to the policy limit of 365 days.
The basic policy pays for the uncovered share of skilled nursing home care for 21 to 100 days, three pints of blood, the 20 percent subscriber cost of doctors' care, 20 percent of the cost of mammography screening and medical costs outside the United States.
Blue Cross-Blue Shield charges $35 a month ($420 a year) for the basic policy, up from $26 a month last year.
The midlevel policy adds three more items to the basic package.
One is the deductible for the first 60 days of hospitalization, currently $592 in each benefit period.
Another is the $75 annual deductible for doctors' care.
The third is 80 percent of skilled nursing care for 101 to 365 days.
Blue Cross-Blue Shield charges $64 a month ($768 a year) for the mid-level policy, up from $49 monthly in 1989.
The top-level policy pays for prescription drugs after the first $10. Generic drugs must be used if they are available.
It also covers 80 percent of the cost of mammography screening.
And it pays, up to a lifetime limit of $1 million, 80 percent of the cost of extra days of hospitalization, outpatient skilled private duty nursing up to $1,500 a year, and outpatient psychiatric care up to $500 a year.
The Cadillac policy costs $102 a month ($1,224 a year), up from $84 monthly last year.
Some medical costs fall outside the net of both Medicare and all medigap policies.
A few excluded items include treatment found to be unnecessary, care in a standard custodial nursing home, cosmetic surgery and private duty nurses in a hospital.
People eligible for Medicare should weigh the potential benefits of each type of policy against its costs.
Anyone who is eligible for Medicaid may not need a medigap policy at all.
Avoid the temptation of trying to boost protection by buying more than one policy. They will simply overlap each other because the policies are standardized.
A better alternative, if you have the money, is to consider long-term care insurance that will pay the cost of a custodial nursing home or in-home care.
Before buying a medigap policy, check its renewability, limitations, exclusions and waiting periods.
Before changing from one company to another, ask if there is a waiting period for coverage of existing conditions.
by CNB