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Medicare Supplement Insurance

A Medicare Supplement is a private health insurance policy designed to supplement Original Medicare. It covers some of the health care costs that Medicare doesn’t cover such as co-insurance, copayments, and deductibles. Medicare Supplement policies may also cover some services not covered by Medicare. If you are enrolled in Medicare Parts A and B and have a Medicare Supplement policy, Medicare pays its share of the approved amount for a covered heath care costs, and then the Medicare Supplement policy pays its share. Every Medicare Supplement policy must meet State and Federal laws designed to protect consumers and the policy must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can only sell a “standardized” plans identified by letters A through N. All standardized policies must offer the same basic benefits, no matter which insurance company sells it. Since the coverage is the same no matter which insurer you choose, the only difference is the price and the service you receive.

Since January 1, 2006, Medicare Supplement policies do not include prescription drug coverage. If you have a Medicare Supplement policy without prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D) during the Medicare Advantage Annual Enrollment Period (AEP). Information about Part D plans can be found on the federal government website at www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227).

Medicare Select Policies: Medicare Select policies offer the same basic coverage as the standard plans; however, the insurance company normally requires participants to use a specific network of health care providers and/or facilities. The premium for a Medicare Select policy is usually lower than a traditional Medicare Supplement insurance policy.

Except for emergency care, the Medicare Select policy will deny payment or pay less than the full benefit if you go outside the network for services. Medicare, however, will still pay its share of approved charges in such situations

Free Look Period

A 30-day free look period is provided on all Medicare Supplement policies according to s. 627.674, Florida Statutes. This means the policy can be returned to the company for a full refund of all premiums. The free-look provision starts from the day the policy is delivered and it is suggested the policy be returned in a manner in which delivery must be confirmed by the insurance company. (The free-look provision does not apply to Medicare Advantage Plans.)

Grace Period

A grace period is a specified number of days where a person can pay a premium beyond its due date and coverage will stay in force. Medicare Supplement policies require a grace period of at least 7 days and not more than 31 days, depending on the payment mode. For example, a policy premium paid weekly requires a minimum of a 7 days grace period, a policy premium paid monthly requires a minimum of a 10 days grace period, and all other premium modes (i.e. quarterly, semi-annual, or annual) require a minimum of a 31 days grace period.

Reference: Florida Statute 627.608 (Paragraph 2 applies because Medicare Supplement policies sold in Florida cannot be non-renewed.)

Open Enrollment Periods

Age 65 or over: S. 627.6741, Florida Statutes requires companies to provide an open-enrollment period to accept applications and not discriminate in the pricing of the policy, regardless of the enrollee's medical history, health status, or claims experience.

The open-enrollment period for Medicare Supplement insurance begins the first day of the month a person turns 65 and is enrolled in Medicare Part B. If a birthday falls on the first day of the month, Medicare Part B coverage and Medicare supplement insurance open enrollment begins the first day of the previous month.

If the individual did not enroll in Medicare Part B upon becoming age 65 and chooses to do so at a later date, they will have 6 months from the Medicare Part B effective date in which to obtain a guaranteed issue Medicare Supplement policy. In addition, there is a 2-month period following termination of employer-based group health coverage for an individual to have the same guaranteed issue rights.

Under age 65: Effective October 1, 2009, s. 627.6741, Florida Statutes required an open enrollment period for individuals that become eligible for Medicare Part A and B due to disability, including end stage renal disease (ESRD). Once the person is enrolled in Part A and B, regardless of age, they will have 6 months in which to obtain a guaranteed issue Medicare Supplement policy.

In addition, there is a 2-month period following termination of employer based group health coverage for an individual to have the same guaranteed issue rights.

All insurance companies that sell Medicare Supplement policies in Florida must offer their policies to those under age 65.

Individuals on disability or with ESRD that enrolled in a Medicare Supplement plan will have another open enrollment period when they turn 65 years old. They must apply for a new policy in order to receive a lower premium. Medicare Supplement rates for individuals with ESRD or on disability are higher than for those eligible for Medicare due to age. The individual will be eligible for the lower rate once he/she turns 65 years of age.

Pre-Existing Condition

The Medicare Supplement insurer may not exclude benefits based on a pre-existing condition for more than 6 months according to s. 627.6741, Florida Statutes. A pre-existing condition is defined as a condition for which medical advice was given or treatment recommended by or received from a physician within 6 months before the effective date of coverage.

If a Medicare Supplement policy replaces another Medicare Supplement policy or creditable coverage as defined in Florida Statute 627.6561, the pre-existing condition exclusion of the second policy must allow credit for the time satisfied under the first policy. The maximum pre-existing time period is 6 months minus credit for prior coverage.

Premium Issues

Premium Increases: Medicare Supplement insurers may adjust premiums due to inflation, overall claims experience, or because of benefit adjustments in a policy as Medicare benefits change. For example, when the Medicare Part A deductible increases, a company usually raises its premiums to pay for the increased deductible it covers.

An insurance company can only increase its premiums if it does so for the entire policy class. It cannot single out and raise premiums based on an individual’s health or number of claims filed. The Office of Insurance Regulation (OIR) has to approve any rate increase before it goes into effect.

All Florida Medicare Supplement policies must be sold on an “issue age basis.” This means that an individual’s premium will not increase due to age as they get older. For example, if Mary purchased a Medicare Supplement policy when she turned 65 years old, she will always have the rate of a 65 year old. However, if Mary switches to a new insurer she will rated based on her age at the time of the new application.

If an insurer is granted a rate change, the policyholder or certificate-holder must be given at least 45 days advance notice of the change. Such notice shall be mailed to the policyholder’s last known address according to the records of the issuer.

Premium Refunds: If a Medicare Supplement policy is cancelled by the insured prior to the expiration date, the company may calculate the refund by using the short-rate method. This charges a 10% penalty for early cancellation of the contract. Florida law does not specify a time frame in which the premium refund must be sent to the insured.

Medicare Supplement Tips

Verify before you buy!!!! Contact us to verify the license of the agent and the insurance company before you sign an application for a policy.

For additional information concerning Medicare Supplement Insurance, please view our Consumer Guide.  It will help you understand the coverage and your rights and responsibilities.

Medicare Supplement Sample Rate Search! The Office of Insurance Regulation has established this Web site to assist you in purchasing a Medicare Supplement policy - http://www.floir.com/Office/RateSearchTools.aspx.

Low Income Assistance

Not everyone needs Medicare Supplement insurance. Individuals may have other options. For example, if an individual's income falls below a certain level, they may qualify for full Medicaid benefits and therefore will not need a Medicare Supplement insurance policy.

In addition to the Original Medicare program, the state Medicaid offices offer two other programs to help certain low income Medicare beneficiaries meet health care costs:

The Qualified Medicare Beneficiary (QMB) program assists individuals with income at or below the national poverty level. This program pays Medicare's premiums, deductibles and co-insurance amounts for certain elderly and disabled persons who qualify for Medicare Part A.
The Specified Low Income Medicare Beneficiary (SLIMB) program assists persons entitled to Medicare Part A whose incomes are slightly higher than the national poverty level. If you qualify for assistance under the SLIMB, the State will pay your Medicare Part B premium.

To see if you qualify, visit www.dcf.state.fl.us/ess/ or call 1-866-762-2237 or contact the Department of Elder Affairs SHINE program at 1-800-963-5337 to speak with a SHINE volunteer.

Alternative Plans

Medicare Advantage Plans:  Medicare Advantage Plans (Medicare Part C) include the following:

Preferred Provider Organization (PPO) Plans: PPOs are similar to HMOs; however, the beneficiaries do not need referrals to see specialist providers outside the network, and they can see any doctor or provider that accepts Medicare. However, out of pocket expenses will be higher if an individual uses an out of network provider instead of an in-network provider.  

Health Maintenance Organization (HMO) Plans: HMO plans consist of a network of approved hospitals, doctors, and other healthcare professionals who agree to provide services for a set monthly payment from the Center for Medicare and Medicaid Services (CMS).  Subscribers must use in-network providers in order for non-emergency services to be covered. Emergency care is covered regardless of whether or not services are obtained in or out of network.

Private Fee-for-Service (PFFS) Plans: This type of plan offers a Medicare approved private insurance plan. CMS pays the plan for Medicare approved services while the Private-Fee-for-Service (PFFS) plan determines, up to a limit, how much the care recipient will pay for covered services. Beneficiaries can obtain services from any Medicare-approved provider who, before treatment is provided, agrees to accept the PFFS’s terms and conditions of payment.

Special Needs Plans (SNP): SNPs provide more focused health care for people with specific conditions. A person who joins one of these plans gets healthcare services as well as more focused care to manage a specific disease or condition.

To be eligible for any of the Medicare Advantage Plans, a beneficiary must be enrolled in both Medicare Part A and B. When an individual is enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan, not through Original Medicare. Medicare Advantage plans may include prescription drug benefits.  For more information on Medicare Advantage Plans, call 1-800-MEDICARE (1-800-633-4227) or visit the Center for Medicare and Medicaid (CMS) website at www.medicare.gov.

Contact Us Or File A Complaint

Should you need additional information, you may speak with an insurance specialist between the hours of 8am–5:00pm at one of the telephone numbers listed below:

1-877-MY-FL-CFO (1-877-693-5236)

Out of State Callers: (850) 413-3089

You can also contact us for assistance anytime by email at Consumer.Services@MyFloridaCFO.com. or file a complaint through our “Consumer Help Online” website.