ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, September 30, 1996 TAG: 9610010106
SECTION: MONEY PAGE: 6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
MEDIGAP insurance is a supplement to Medicare, the government program of medical coverage for people older that 65. Medigap is intended to fill the holes in what Medicare doesn't fully provide.
The once-in-a-lifetime opportunity refers to the six months after you first apply for what's called Medicare Part B coverage. It is when you can choose a Medicare supplemental policy. In that specific period the private insurance company to which you apply must accept you for coverage without any type of medical tests or underwriting.
Most people will apply for Medicare Part B coverage when they become eligible at the age of 65. Anyone who is still working, however, will probably continue buying health care coverage under his or her employer's insurance and will not apply for Part B coverage until actual retirement. If that is the case, your window of opportunity will open when you retire and apply.
You can, in theory, buy Medigap coverage at any age. Your health, however, will come into question if you wait beyond the six-month period. In addition, the cost of the insurance likely will rise dramatically.
Amy Bradley, senior marketing analyst for Trigon Blue Cross Blue Shield in Roanoke, said her company is the state's insurer of last resort in Virginia. It has to accept any applicant for Medigap insurance (as it does for health insurance), but the cost may be higher.
The government's Medicare program is divided into two parts:
Part A covers hospitalizations, after deductions and coinsurance - payments under other comapnies' policies, and is free to most people. Bradley said everyone should apply for this coverage within three months of turning 65 regardless of whether they will retire at that age.
Part B is medical insurance that pays for doctors' services both in and outside of the hospital. The current cost for coverage is $42.50 a month, and Bradley said any person 65 or older who is not covered by a private plan should buy Part B if they can.
Since 1992, every company that sells Medigap insurance in the country must, by federal law, offer any number of up to 10 specific plans. The plans are commonly labeled A through J. Trigon, for example, offers six of the 10.
You do not need two Medigap policies that would overlap each other. Instead, you should buy the best one of those 10 plans that you can afford.
Bradley said the basic plan, labeled A, covers the 20 percent copayments that Medicare requires indivdiuals to pick up plus any payments for blood. Plan B picks up the deductible that Medicare imposes for any hospital admission, even just for one day. The amount of the deductible this year is $736.
The plans get more expensive as the benefits go up. The most expensive plan covers most of Medicare's omissions, including a benefit for drugs. None of the plans, however, cover long-term care for which separate insurance is required.
It's important to buy the best plan you can afford when you make your initial application. Bradley said most insurance companies won't permit customers to upgrade plans later for fear, for instance, that people will wait until they face expensive medication costs before buying drug coverage. Even those that do permit upgrading require medical tests.
The cost difference can be considerable. For people age 65, for instance, Trigon charges $38 a month for Plan A and $133 a month for Plan J.
Bradley said the most popular plan is labeled C, which covers patient copayments for skilled nursing coinsurance, all deductibles and coverage of health emergencies during travel outside the country. She said it was the plan recommended last year in a study by Consumer Reports. Trigon charges $72 a month for Plan C, for example.
Drug benefits are limited even under the most expensive plans. They carry a $250 deductible and pay only half the cost of medications up to the limit specified in the policy.
At home recovery provides for seven visits a week by assistants who will cook or clean, but not by professionals who provide health care. The cap for such expense is $1,600 a year. The coverage applies to people who have been hospitalized and whose need is certified by Medicare.
The Part B excess covers any difference between the amount Medicare will pay for a doctor's services and the amount of the doctor's actual bill. You can avoid this need by consulting only doctors who accept Medicare's assigned price.
One item to check is whether an insurance company's policy covers pre-exsting conditions. Some policies make new applicants wait six months before such problems will be covered. Others cover you from the day of enrollment.
You also want an insurer that uses a so-called community rating in raising its prices. Some companies automatically increase premiums of policyholders as they age.
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