Commonly Asked Questions
- Why do I need a Medigap (Medicare Supplement) plan?
- Which Medicare Supplement is best for me?
- Which Prescription Drug Plan is best for me?
- What is the "Open Enrollment" Period?
- How is my Medicare Supplement premium determined?
- When will my Medicare Supplement premium charge?
- How is my Prescription Drug premium determined, and when will it change?
- I'm going to continue to work past age 65. What do I need to do?
- Can the insurance company drop my coverage?
- When can I switch to a different Medicare Supplement plan?
- When can I switch to a different Prescription Drug plan?
- What should I do when I get a bill from a medical service provider?
- How do I know if my agent is pulling the wool over my eyes?
- Does it cost me more if I use Sycamore Agent as my insurance agent?
Why do I need a Medigap (Medicare Supplement) plan?
If you don't have a Medigap (Medicare Supplement) plan, you will be exposed to the costs of care that Medicare doesn't cover. For example, Medicare Part A covers in-patient hospitalization. If you are in an auto accident, and are admitted to the hospital as an in-patient, you will pay the Medicare Part A deductible ($1,364 in 2019). If you are admitted a few months later, say for a gall bladder issue, during the same calendar year, you will be hit again for that $1,364 deductible. The Medicare Part A deductible is a "per occurrence" not a "calendar year" deductible. If your stay in the hospital is for an extended period of time (beyond 60 days), there will be per diem charges to be paid.
If you don't have a Medigap plan and you require out-patient medical services, say for a cardiology test or dermitology services, you will be subject to paying the Medicare Part B Annual Deductible of $185.00, plus you will be subject to paying 20% of the Medicare-approved doctor's fees and excess charges, if any.
Which Medicare Supplement is best for me?
The best plan for you is determined by how much risk you are willing to take and how much you can afford to pay for coverage. That Risk vs Cost equation is different for every person.
The most popular Medigap plans are Plans F, G, N, and High Deductible F (HDF). That list is in sequence by highest cost to lowest cost, and by lowest risk to highest risk.
Note: Individuals who turn 65 on or after January 1, 2020, will not be able to enroll in Plans F or HDF, unless their Part A coverage began before the that date. Individuals who have Plans F or HDF will continue to have coverage. But, it is likely that the increases in premiums for those individuals will be greater than the increases experience by individuals with other "coninuing" Medicare Supplement plans. (There will be a High Deductible Plan G available in place of HDF.) If you have a Plan F or HDF, we should talk!
Which Prescription Drug Plan is best for me?
The best plan for you can only be determined by analyzing the total cost of prescriptions for the calendar year. This total cost includes the monthly premiums for the coverage plus the cost of each prescription at the retail pharmacy or mail order supplier. You cannot pick the best plan by simply considering the monthly premium. For more discussion about Prescription Drug (Medicare Part D) plans, see the discussion under that tab.
You could try to figure out the total cost for the various Prescription Drug plans in Illinois (there are about two dozen of them). But that work has been done for you! The Medicare.gov website is an excellent resource. By going through the analysis on that website you will see a list of all the available plans in Illinois, listed in sequence by their total cost. In general, whichever plan is presented at the top of the list is the "best" plan for you.
We often assist our clients in this analysis. If the “best” plan is one that we represent, we will be happy to do the paperwork and enroll you in the plan. If the best plan for you is not one of our appointed plans, you can enroll on your own, using the information that is presented on the website.
What is the "Open Enrollment" period?
For Medicare Supplement (Medigap) Plans, the Open Enrollment Period (OEP) is defined as the six months prior to and the six months after the first day of the month that you turn 65 or start Medicare Part B. A little complicated, yes, but the important thing to remember is that you will typically only get one OEP in your life. The enrollment periods that you see on TV between October 15 and December 7 do not apply to Medigap plans!
If you are going on Social Security Disability, prior to reaching age 65, you will enjoy two OEPs - one when you start Medicare Part B, and then another one when you turn 65.
If you plan to continue working after you turn 65 and you will have "creditable" medical coverage through your employer or union, you should not start Medicare Part B when you turn 65. You can delay turning on Medicare Part B and by doing so you can delay initiating your OEP until you choose to end your employer or union coverage.
For Prescription Drugs plans you have one Initial Enrollment Period (IEP) and multiple Annual Election Periods (AEPs). Your IEP is defined as the month during which you turn 65 (or start Medicare Part B), plus three months before and three months after that birthday month.
In addition to the IEP, each year between October 15 and December 7 you will have an opportunity to reevaluate your prescription needs and change plans if you desire for the next calendar year. This is your Annual Election Period.
How is my Medicare Supplement premium determined?
The three key factors that determine your Medigap premium are zip code, gender and age. During your Open Enrollment Period, these are the only factors that are used. After your OEP, insurance companies can use other factor such as tobacco usage, and height & weight to determine your premium.
Once in place, your premium will never change because of your health or claims.
When will my Medicare Supplement premium change?
There are only three factors that can trigger a rate increase: (1) When you get a year older, (2) When the Illinois Department of Insurance (IDOI) approves a general state-wide rate increase, and (3) When you move. Illinois is an "Attained Age" state. That means that as you get older, insurance companies are allowed to increase your premium.
Each insurance company is allowed to make a profit. When a carrier can prove to IDOI that they are not making enough profit, then IDOI will approve a general rate increase for everyone in the state who is enrolled with your carrier's plan.
Since premiums a determined largely by zip code, if you move from one zip code to another, your carrier can change your premium accordingly. Sometimes that is a rate increase, sometimes a rate decrease, and sometimes your change of zip code will have no effect at all - depending on the rate schedules for your "from" and "to" zip codes.
If you move out-of-state your carrier may or may not adjust your premium accordingly. Many carriers let your original zip code drive your premium cost regardless of where you move out of Illinois.
How is my Prescription Drug premium determined, and when will it change?
The monthly premium of each Prescription Drug plan is constant for everyone who enrolls in that plan, regardless of zip code, age, gender, medical conditions, or prescription usage - one premium for everybody in the plan.
Each year between October 15 and December 7 plans can change their monthly premium for the following calendar year.
Note: The cost of your individual prescriptions can change! As you might expect, a change is likely to be in the up-side direction. Unfortunately, there is very little you can do when that happens beyond filing an appeal with your prescription drug carrier.
I'm going to continue to work past age 65. What do I need to do?
If you continue to work after age 65 and you have health and prescription drug coverage through your employer or union, then you don't need to enroll with Medicare when you turn 65 – you can put it off until you decide to discontinue your employer coverage.
But, do the math! Depending on the monthly cost of your employer coverage and considering the annual deductible, coinsurance, and copays of your coverage (and the network of service providers available to you with your employer coverage), you may find that it is better to start Medicare coverage even though you aren't required to do so. We can help with that analysis.
If you decide to postpone Medicare, there are couple of issues you should address.
1. Talk with your employer Human Resources staff. The company policy may require you to enroll in Medicare Part A. That's not a problem – Part A is free. Your company should not, however, require you to enroll in Medicare Part B. If your company does require Medicare Part B, then it's quite possible that dropping the company coverage is your best alternative.
2. Talk with your local Social Security office to verify that they know you do not want to start Medicare Part B until you discontinue your employer coverage. This is not an unusual situation for them. They will understand and tell you what you must do when you decide later to start Medicare Part B.
This decision process is one of the most important ones of your life. We can help. Our time is free!
Can the insurance company drop my coverage?
In both cases (Medicare Supplement and Prescription Drugs) the only reason that an insurance carrier is allowed to cancel your coverage is if you fail to pay your premiums. They can never drop you (or change your monthly premium) because you generate medical claims.
When can I switch to a different Medicare Supplement plan?
Any time! You can switch Medicare Supplement plans as many times as you wish. However, each time you switch plans after your OEP, you will be subject to underwriting. The Affordable Care Act eliminated underwriting for major medical coverage, but that law did not eliminate underwriting for Medigap coverage. (The only company that never asks any medical questions is Blue Cross Blue Shield, which is why their premiums are typically higher than other carriers.)
If the insurance company goes out of business or for some other reason will not provide coverage for you, you will enter a Guaranteed Issue period, which is similar to the OEP. Only certain Medigap plans are available in this situation, but you will have an opportunity to switch your coverage without considering tobacco usage or medical conditions.
When can I switch to a different Prescription Drug plan?
Generally, the only time you can switch Prescription Drug plans is during the Annual Election Period (AEP) between October 15 and December 7. When you enroll in a Part D plan you are making a commitment for that entire calendar year.
There are very few exceptions to the "once each year" rule. Under certain circumstances you may qualify for a Special Enrollment Period (SEP). If the insurance company suddenly goes out of business or discontinues service in your geographical area, you will be able to enroll in a different Part D plan Similarly, if you move out of the plans service area, you will have an opportunity to enroll in a different plan. Note: There are time limits during which you can take advantage of these SEPs. DON'T DELAY. If you have questions, ask!
What should I do when I get a bill from a medical service provider?
As a general rule, don't pay any bills from medical service providers until you have received your Explanation of Benefits (EOB) statements from Medicare (CMS) and from your Medigap carrier. EOBs will explain if and why you may owe money to the service provider, and how much money you might owe.
How do I know if my agent is pulling the wool over my eyes?
The Illinois Department of Aging has established Senior Health Insurance Program (SHIP) offices all over the state with the objective of providing objective answers to senior citizens' questions. The individuals who work at those offices cannot recommend any particular Medigap or Prescription Drug plan. They can, however, give you the facts about how all the plans work. If you have any questions that you feel cannot be answered by us, or if you question the statements made by any insurance agent, we encourage you to visit the SHIP office nearest to you. For the location of a SHIP office near you, go to the Illinois Department of Aging Website and click on the link entitled "Volunteers in Your Area (By County)" on the right hand side of the page.