South Carolina Medicare Supplement Plans M and N

June 1, 2010 marks an important day for Medicare Supplement plans in South Carolina and the rest of the country. The South Carolina Medicare Supplement plans are changing for the first time since 1992. We have addressed some of the changes in our previous post, which can be seen here: The 2010 Medigap Changes.

Possibly the change with the effect on the largest amount of people is the addition of Medigap Plans ‘M’ and ‘N’. These plans are totally new to the marketplace and have never before been offered. In fact, nothing like these plans has been sold as a Medigap plan previously. We’ve outlined the coverage that will be offered in those plans below, as well as what we believe to be the benefits of these plans, when compared to existing Medicare insurance options.

Plan ‘M’
Plan ‘M’ will be very similar to the current Plan ‘D’. It will still cover the 20% not covered by Medicare at the doctor’s office, hospital and skilled nursing facility. However, it will use cost-sharing in exchange for lower monthly premiums. The insured will be responsible for 50% of the Part A deductible, which is currently $1068 per benefit period. Current plans either cover the Part A deductible fully or not at all. Most people expect that the premiums for Plan ‘M’ to be about 15-20% less than current Plan ‘F’ premiums.

This plan may be a good fit for those who currently have a Medicare Advantage plan, that is terminating coverage or that they are leaving. Many of those individuals are used to having a hospital deductible, and with Medicare Advantage premiums expected to go up next year, Plan ‘M’ premiums project to be very close to Advantage plan premiums anyway.

Plan ‘N’
Plan ‘N’ is the second of the two new Medigap plans. This plan is also similar to the current Plan ‘D’, in that it covers the 20% that Medicare doesn’t cover at the doctor, hospital and skilled nursing facility. Instead of using a deductible method, like Plan ‘M’, this plan will use cost-sharing through co-pays to keep premiums lower. Insureds will have a co-pay at the doctor’s office of $20 and a co-pay of $50 for emergency room visits. This plan projects to have premiums that will be 30% less than current Plan ‘F’ coverage.

Just like Plan ‘M’, the expected market for Plan ‘N’ is the Medicare Advantage customers who are either losing or dropping their current coverage. Plan ‘N’ can definitely be a valid alternative for those losing or dropping this coverage, but who want to avoid Plan ‘F’ premiums.

Overall, the 2010 Medigap changes offer many benefits to those on Medicare+Medicare Supplement insurance, through additional benefits and new plan options. We get asked all the time how health care reform will affect them and their Medicare. While it remains to be seen what will happen with that and how it will effect those on Medicare, the 2010 changes have already been announced and everyone who has a Medicare Supplement should educate themselves about how this will affect them.