Medicare Supplement plans, also known as Medigap plans, are insurance purchased through a private company, designed to fill in the "gaps" in Medicare. The major "gaps" that these plans customarily cover are the Medicare Parts A & B deductibles and the 20% coinsurance at the doctor and hospital.

These plans are Federally-standardized - that is, each company that offers them has to offer the exact same coverage plans. This makes price (or premium cost) and company reputation the main, in most cases only, comparison factors.

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What are the "parts" of Medicare?

One of the most confusing parts (no pun intended) of Medicare is the "parts". There are four parts that you often hear about, and it can be very confusing to keep these straight. We've put together a primer below, for your reference, of what these parts are and what they cover. Keep in mind - Medicare Supplements have "plans"; Medicare has "parts".

Medicare Part A

Part A is the part of Medicare that covers hospital stays. It also covers home health care, hospice care and skilled nursing facility care. You get Medicare Part A from paying into social security your whole working life. You get it automatically at age 65 (unless you go on before due to disability).

Medicare Part B

Medicare Part B covers doctors' services, durable medical equipment, outpatient therapeutical services, some preventive care, x-rays, lab tests and some prescription drugs (when administered by a physician). Medicare Part B is an optional part of Medicare. Most people who are still working and insured through an employer do not take Medicare Part B right when they turn 65. You can wait until you lose or terminate your employer coverage, then sign up for Part B during a special enrollment period.

Medicare Part C

Medicare Part C is also an optional part of Medicare. Part C is also called Medicare Advantage. This is a relatively new program, in which an individual opts to be covered by a private company (which is certified/approved by the Federal government). The private Medicare Advantage company provides all of your Medicare benefits. They have to provide a base level of benefits that is similar to Part A and Part B, but then they have flexibility to add additional benefits.

Medicare Part D

Part D is the most maligned part of Medicare. This is the part of Medicare that covers prescription drugs. It, too, is offered through private companies that are certified on an annual basis through the Federal government to provide Part D benefits. The plans themselves, with some restrictions, decide what drugs they are going to cover and to what extent they are going to cover them (on their Part D formulary).

How Do North Carolina Medicare Supplement plans and Medicare Work Together?

Medicare Supplement plans, in addition to having Federally-standardized coverage, also work the same way with Medicare. These plans can be used at any doctor or hospital that takes Medicare - in other words, there are no networks. So, when comparing plans, you do not have to check to make sure that your doctor takes the plans you are considering, although you certainly can if you wish.

Also, these plans handle claims the same way. The insured individual is not involved in the claims process. The doctor or hospital files the claims directly to Medicare for services/procedures. Then, the Medicare "crossover" occurs, though which your secondary insurance (the North Carolina Medicare supplement) pays. The insured receives an explanation of benefits-type document from both Medicare and the secondary payor (the Medicare Supplement company), which explains who paid what and how much they paid.

How Do I Choose a North Carolina Medicare Supplement Plan?

Choosing a supplement plan can be overwhelming. There are many option in North Carolina, and they all have their own unique "pitch points" as to why you should have your supplement insurance through them. However, there are just a few important things to keep in mind when comparing North Carolina Medicare Supplement plans:

First and foremost, the monthly premium price for your age and zip code.

This is the most important thing, by far, since plans are standardized.

The company reputation

Have they been around a long time or are they new to Medicare supplements in North Carolina? Do you know anyone else who has the coverage?

Who you are getting advice/information from

Obviously, an agent or representative of a specific company is going to advocate that company's plans. But, are they doing it because it's really the best plan for you or because that's their job. It is always in your best interest to use a licensed, independent broker to make your choice.

What is the Medicare Part D "donut hole" and does it affect me?

One of the most frequently asked questions about Medicare has to do with the Medicare Part D "donut hole". This is part of Medicare's prescription drug coverage. This coverage gap occurs between $2,700 and $4,350 in total overall retail drug costs. During this gap, your drug's are not covered nearly as much, and the individual is responsible for the bulk of his/her prescription costs.

This is NOT specific to a certain company that offers Part D plans. You can NOT completely avoid the "donut hole" by having a different Medicare Part D plan company.

However, there are some strategies for avoiding the "donut hole" if at all possible.

First, try to get on as many generics as you can if your doctor and you agree that they will be just as effective.

This is, by far, the easiest way to avoid the "donut hole". The lower your annual retail costs are, the less likely you will be to reach the coverage gap (or at the least, the later you will reach it).

Make sure you are getting your drugs as cheaply as possible (retail price).

Make sure that you are getting your drugs from a place with the lowest possible retail costs to keep yourself from reaching the donut hole.

Purchase your generic medications from the "preferred list" at pharmacies that offer it, if possible.

Many of the pharmacis now offer a "preferred generics list". If your generic drugs are on this list, you can purchase them, in most cases, less expensively using the pharmacies preferred generics program than you can using your Part D coverage. You should do this, if possible, to avoid your generic drugs counting towards your total annual retail costs.

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