April 18, 2018
The weather is getting warmer, finally. And hopefully taxes have been paid for 2017. As we enter the middle part of 2018 news that may affect you has been issued by the health insurers in Minnesota. The Medicare Cost plans offered to individuals as Medicare supplement plans are slated to be terminated effective at the end of 2018. Termination of these plans stands to affect 400,000 individuals who currently carry such coverage and rely on it to pay for medical care when Medicare Parts A and B do not. For a broader understanding of this issue, please read the following.
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Medicare Cost Plans
As everyone likely knows, Medicare coverage offered through the federal government is available to individuals who attain age 65. But Medicare does not cover every medical expense. In fact, Medicare comes with significant deductibles and co-pays that require individuals to pay for medical expenses out of their own pockets. To offset such out-of-pocket expenses, many individuals opt for Medicare supplement plans. These plans come in various designs with different types of coverages to choose from.
One of the most cost effective plans is known as the Medicare Cost plan and is offered through the major insurers in Minnesota including Medica, Blue Cross, and Health Partners. The Cost plan generally allows an individual to have coverage if staying within a given network of physicians, clinics and hospitals. Going outside the network would void coverage, which is the situation that allows the insurers to strictly contain costs. If individuals go outside the network there would be not Medicare Cost coverage, but only that coverage provided by Medicare Part A, B, or D.
These plans have been significant in the rural areas of Minnesota because rural clinics and providers generally would generally be the only providers thus offering an exclusive market to the insurers. Medicare has generally been willing to assist with funding these plans, although not all states carry Cost plans making them an unusual, innovative way to offer coverage in Minnesota. But they have not been cheap to maintain and changes are happening.
The Medicare program through the Center for Medicare Services (CMS) issued an alert earlier this year that Cost plans would no longer be recognized as of January 1, 2019. This leaves Minnesotans who depend on such coverage, especially those in the rural areas, without a supplemental type of coverage. While other supplement plans are available, they are generally more expensive and potentially unattainable for individuals on Medicare.
I have been contacted by insurance agents who are available to help with this gap in the market.
I am not licensed as an insurance agent nor do I promote any particular agent or company for insurance products. What I can do is help with understanding the applicable law on this topic and discuss other possible options available.
If you are currently enrolled in Medicare Parts A, B, and D, and you wish to discuss the issue of Cost plans being terminated, please contact me. There may be other options for youwhich you are eligible.