16.1.2 Medigap Plans
As of January 1, 2006, insurance companies cannot sell Medigap plans H, I or J. However, if these policies were purchased previously, they may be renewed as long as the policyowner has not enrolled in Medicare Part D. When the policyowner enrolls in Medicare Part D, the drug coverage must be eliminated from the Medigap policy and the premium must be adjusted accordingly.
Starting in 2006, Medigap supplement policies include two new kinds of benefit packages (Plans K and L) which include higher copayments and coinsurance contributions and a limit on annual out-of-pocket expenditures. Once the out-of-pocket limit on annual expenditures is reached, the policy covers 100% of all cost-sharing under Medicare Parts A and B for the balance of the calendar year. The out-of-pocket limit for Plan K is $4,620 (2009; $4,440 in 2008) and $2,310 (2009; $2,220 in 2008) for Plan L. A Medigap policy does not pay cost-sharing for expenses incurred under Medicare Parts C and D.
In Lesson 12, you studied Medicare and the new Prescription Drug Benefit Program under Medicare Part D effective January 1, 2006. Because of the addition of the prescription drug benefit to Medicare, the MMA (the Medicare Prescription Drug, Improvement, and Modernization Act of 2003) also prescribes changes to the law applicable to Medigap policies.
As a result of MMA, no new Medigap policies with drug coverage (Plans H, I, and J) can be sold (as of January 1, 2006). However, if an individual had purchased a Medigap policy with drug coverage prior to 2006, the policyowner can choose to renew it as long as he/she has not enrolled in Medicare Part D. When the policyowner enrolls in Medicare Part D, the drug coverage must be eliminated from the Medigap policy and the premium must be adjusted accordingly.
Florida statutes call for all Medicare supplement policies to "contain a prominently displayed no-loss cancelation clause enabling the insured to return the policy within 30 days of the date of receipt of the policy, or the certificate issued thereunder, with return in full of any premium paid."
Florida law requires agents to ask every person solicited whether they are currently covered under any other contracts so they may explain the extent to which the proposed coverage will overlap or duplicate coverage. Before an application is taken, the Department of Financial Services requires that agents obtain a signed form from the applicant acknowledging that this information has been provided.
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Section 16.1 ReviewUnder Florida law, Medicare supplement insurance applies to both the hospital and medical insurance plans administered by the federal government for the elderly and permanently disabled. |
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Any Medigap insurance policy purchased after ______ will be renewed automatically as long as premiums continue to be paid. |
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Medicare supplement insurance policies must include a minimum 30-day free look provision. |
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Florida law requires agents to ask every person solicited for Medicare supplement insurance whether they are currently covered under any other contracts so they may explain the extent to which the proposed coverage will overlap or duplicate coverage. |
