Supplementing Medicare: an overview
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Medicare does not cover all your health care expenses and has deductibles and costs that you will have to pay. Described below are 9 ways to help fill some of the gaps in Medicare.
On this page:
- Coverage After Age 65 While You or Your Spouse is Working
- Retirement plans
- TRICARE For Life (TFL)
- Veterans Affairs (VA)
- Medicaid (known as Medi-Cal in California)
- Medicare Savings Programs and Other Low Income Assistance
- Medigap Policies / Medicare Supplement Insurance Policies
- Medicare SELECT Plans
- Medicare Advantage Plans (formerly known as Medicare+Choice — HMO, PPO, PFFS, SNP, MSA)
1. Coverage After Age 65 While You or Your Spouse is Working
If you are 65 years old or over, and you or your spouse still works, you may have health care coverage from your employer. If your employer has 20 or more employees, your employer must offer you the same group health plan that is offered to the other employees. If you choose to have both the employer’s group health plan and Medicare, the employer plan will be primary and pay first. Medicare will be secondary and will pay only after the employer plan.
For more information, see our section on coverage while you or your spouse works.
Coverage If You Are Younger Than 65, on Medicare, and You, Your Spouse, or a Parent is Still Working: People with disabilities who are on Medicare and who have group health benefits through a family member who is employed, are entitled to the same health benefits as other employees and dependents if the company has 100 or more employees. If you choose the employer’s health plan, it will pay first and Medicare will pay second.
Coverage If You Are Younger Than 65 and Have Permanent Kidney Failure: Some people with kidney failure, known as End Stage Renal Disease (ESRD), continue to work and are also eligible for Medicare coverage. Others are covered by the employer plan even after they are unable to work. If you have ESRD and are covered by an employer group health plan, and you have Medicare, the employer plan is required to pay first for 30 months following the effective date of your Medicare benefits. This is true regardless of the size of the group and regardless of whether the person with ESRD is working or not.
For more information, see our sections on coverage while you or your spouse works and Medicare for people with disabilities.
2. Retirement Plans
Some people receive health insurance as a retirement benefit from their, their spouse’s, or their parent’s former employer or union. Benefits and costs vary widely from plan to plan. Some plans cover costs that are not covered by Medicare, such as dental and vision benefits. Others have large deductibles that must be met before any benefits will be paid. While these benefits are coordinated with those paid for by Medicare, these plans are not Medigap plans. (Note that these retirement plans are different from employer group health plans (GHPs) for active employees. See our section on 'coverage while working' for more information.) (hyperlink 'coverage while working' to section 6.1)
Employers can change the benefits, cost sharing or premiums for these plans, or drop the plan at will. Retirees can also lose their benefits if a former employer files for bankruptcy.
For more information, see our sections on Retirement plans and Your rights to buy a Medigap policy.
3. TRICARE For Life (TFL)
TFL is a program that provides coverage to all uniformed service retirees, their spouses, survivors, and other qualified dependents. Beneficiaries must be enrolled in Medicare Parts A and B. There are no premiums or co-payments for Medicare covered services other than the Part B Medicare premium. TFL provides full supplemental medical coverage for all Medicare services and includes prescription drug coverage. For more information call 1-800-538-9552 or 1-866-363-5433 or visit their website.
4. Veterans Affairs (VA)
Veterans of any age, except for those who have been dishonorably discharged, may apply for health care called the Uniform Benefits Package at the Department of Veterans Affairs. There are no premiums, and the VA provides hospitalization, primary health care, diagnostic and laboratory services, mental health and substance abuse treatment, home health care, respite care, hospice care, some urgent and limited services outside VA facilities, and prescription drugs. The VA may also provide nursing home care, adult day health care, dental care, and eyeglasses.
The VA encourages enrolled veterans to retain any other health insurance they may have, including Medicare. Veterans with private health insurance or with federally funded coverage through the Department of Defense (Tricare), Medicare or Medicaid/Medi-Cal, may choose to use these sources of coverage in addition to their VA health care benefits. To enroll in the Uniform Benefits Package, apply at any VA health care facility or veterans’ benefit office, or mail in a completed application form. For more information, call 1-800-827-1000 or 1-877-222-VETS (8387) or visit the VA website.
5. Medicaid (known as Medi-Cal in California)
Medi-Cal coverage is available to certain people with low incomes and limited resources. Medi-Cal pays for “medically necessary” health care, including hospitalization, outpatient services, physical therapy, emergency room, doctor visits, nursing home care, adult day health services, eyeglasses, some dental care, hearing aids, ambulance services and certain prescription drugs not covered by Medicare. It also pays your Medicare Part B premiums, and the co-payments and deductibles if you go to providers that accept both Medicare and Medi-Cal. If you are receiving Medi-Cal benefits, you don't need a Medigap policy, and it is illegal for companies to sell you one.
For more information, see our section on Medi-Cal.
6. Medicare Savings Programs and Other Low Income Assistance
Several federal programs, such as the Qualified Medicare Beneficiary (QMB) Program, the Specified Low-Income Medicare Beneficiary (SLMB) Program, and the Qualified Individual Program (QI), help people with low incomes pay for Medicare. All of these programs pay the Medicare Part B monthly premiums. QMB also pays for Medicare deductibles and co-payments, and the Medicare Part A premium ($423 per month in 2008) for those who do not qualify to get Part A for free. There are varying income and asset requirements for these programs.
For more information, see our section on Medicare Savings Programs.
If none of the six options mentioned above are applicable to you, you may want to consider buying a Medigap policy or joining a Medicare Advantage plan. A HICAP counselor can provide information about these options.
7. Medigap Policies / Medicare Supplement Insurance Policies
Medicare supplement insurance or Medigap policies are sold by commercial insurance companies. There are 12 standardized plans labeled A through L that pay for part, or all, of Medicare's co-payments and deductibles. Some may also cover other health care costs that Medicare doesn’t pay for, such as foreign travel emergency medical care. Two plans, F and J, have a high deductible option. Once you buy a Medigap policy, the company cannot change the benefits covered by the plan, and cannot cancel the policy unless you fail to pay the monthly premium. The company can however, at its discretion, increase the premium you must pay.
For more information, see our section on Medigap Policies.
8. Medicare SELECT Plans
Medicare SELECT plans are a type of Medicare supplement insurance policy. A Medigap SELECT plan is a combination of a standardized Medigap policy and a Preferred Provider Organization (PPO). PPOs are groups of medical providers, such as hospitals and doctors that have agreed to limit how much they charge members who use the plan’s network.
Medicare SELECT plans supplement Medicare if you receive all your care from the plan’s network of providers, the PPO. If you get health care outside of the plan’s network, you may have to pay for most or all of the costs. In California, only a few companies sell Medicare SELECT plans. Once you have purchased a Medicare SELECT policy, the company cannot change the benefits covered by the policy and cannot cancel it unless you fail to pay the monthly premium.
9. Medicare Advantage Plans (formerly known as Medicare+Choice — HMO, PPO, PFFS, SNP, MSA)
A Medicare Advantage (MA) plan is an alternative to Original fee-for-service Medicare and a Medicare supplement insurance policy (also known as Medigap policies). Medicare sponsors MA plans as part of the Medicare program and pays the plans a monthly fee to manage beneficiaries' health care. In order to join one of these plans, you have to have Medicare Part A and Part B and you must continue to pay the Part B premiums ($96.40 in 2008). MA plans are required to accept you if you apply when you are eligible to do so (except if you have end stage renal disease [ESRD]).
If you enroll in a Medicare Advantage plan, you no longer have Original Medicare; instead your Medicare benefits are covered by the Medicare Advantage plan. These benefits must include all Medicare Part A and B services, and may also include some additional services that are not covered by Original Medicare. Note, however, that you generally have to see doctors that belong to the plan or go to certain hospitals to get services.
There are different types of Medicare Advantage plans: the Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee-for-Service (PFFS), Special Needs Plan (SNP) and the Medicare Savings Account (MSA). Some Medicare Advantage plans include prescription drug benefits and are known as MA-PDs (Medicare Advantage Prescription Drug plans). Other Medicare Advantage plans do not include outpatient prescription drug benefits (other than certain drugs that are covered under Part B), and are known as MA-only plans. Note that the type of MA plan you join determines whether or not you can join a stand alone prescription drug plan (PDP) if your MA plan does not offer Part D drug benefits.
For more information on Medicare Advantage Plans including details on the various types of plans listed above, please see our section Medicare Advantage: an overview.
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Page updated July 8, 2008