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Texans Losing Medicare + Choice Plans Have Medigap Rights
By Joséé Montemayor Commissioner of Insurance
Almost 27,000 Texans will lose Medicare + Choice (M+C) coverage on January 1, 2003, because their plans
are withdrawing from Medicare or reducing the number of counties they serve.
These consumers have special rights under federal law to join another plan -- if one is available -- or to
buy certain Medicare supplement ("Medigap") policies to fill some of the gaps in original Medicare.
M+C plans consist of Medicare HMOs and private fee-for-service plans sold by an insurance company. A
private fee-for-service plan helps reduce out-of-pocket costs such as deductibles and co-payments. It also might provide benefits not offered by Medicare.
It should be noted that benefits now provided by M+C plans tend to be less generous than in the past, and
some M+C plans have increased their co-payments to levels similar to those of original Medicare.
The M+C pullouts affect both seniors and people under 65 with disabilities who are enrolled in Medicare
Part B. Some will have the option of joining another M+C plan.
M+C plans leaving Medicare were required to mail "final notification" letters to their members
by October 2, 2002. These letters outline the members' available options. If you received a letter, save it and its envelope to prove your eligibility for the protections and rights described below.
Subject to their doctor and provider network capacity, M+C plans remaining in your area must accept you
without considering your medical history. However, those plans may quickly reach their maximum enrollment. You should, therefore, act promptly if you hope to join another M+C plan.
M+C plan members who haven't signed up with another M+C plan will return automatically to original
Medicare on January 1, 2003. You may leave your present M+C plan earlier than that, however, to join a new plan or return to original Medicare.
M+C plans that are withdrawing must provide benefits through December 31, 2002. If your doctor leaves the
plan before then, you can continue with that doctor by returning to original Medicare and exercising your right to buy Medigap insurance. Just be aware that in these situations, a new Medigap policy won't
take effect until you physically disenroll from the M+C plan.
If you return to original Medicare, you have a limited right to "guaranteed issue" of certain
Medigap policies. Guaranteed issue means an insurance company must sell you a Medigap policy, regardless of your medical history. The company can't impose a waiting period for coverage, exclude coverage of
pre-existing conditions or charge a higher premium because of your health.
People 65 and older who return to original Medicare are entitled to guaranteed issue of Medicare
supplement plans A, B, C or F if they apply no later than 63 days after termination of their M+C plans.
Additionally, Texas law requires guaranteed issue of at least Medigap plan A for people under 65 with
disabilities or end-stage renal disease (permanent kidney failure) who return to original Medicare. If a company sells plans B, C or F to persons under 65, it also must offer those plans on a guaranteed issue
basis to applicants who have lost M+C coverage. In addition, federal law gives people with end-stage renal (kidney) disease the right to join another M+C plan if their plan leaves Medicare or stops providing
coverage in their areas.
People losing M+C coverage have a limited time to apply for a Medigap policy on a guaranteed issue basis.
If you stay with your M+C plan until the final day of coverage on December 31, your deadline is March 4, 2003. You can apply for a Medigap policy as soon as you get your final notification letter. But to protect
your rights, you must apply within 63 days after your M+C coverage ends.
Certain consumers will have a wider choice of Medigap policies if they return to original Medicare and
apply for supplemental insurance before January 1, 2003. These consumers will receive an explanation of their expanded rights in their notification letters.
If you want more information, here are some good sources:
- The Texas Department of Insurance's Medicare Supplement Insurance Handbook and Rate Guide. It's on our Web site,
www.tdi.state.tx.us, or call 1-800-599-7467 for a free printed copy.
- Choosing a Medigap Policy, published by the U. S. Center for Medicare and Medicaid Services
and the National Association of Insurance Commissioners. You can get a free copy by calling the toll-free number listed above.
- The state's Health Information, Counseling and Advocacy Program (HICAP), which provides
one-on-one help to consumers with health insurance concerns. Call 1-800-252-9240 and ask for the Benefits Counselor Program.
- Texas Department of Insurance Created/Updated 11-06-2002
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