Michael J. Astrue, Commissioner of Social Security, and Chubby Checker, Grammy Award winner and rock and roll legend, have launched a new campaign to inform millions of Americans about a new “twist” in the law that makes it easier to qualify for extra help with Medicare prescription drug costs. The extra help program currently provides assistance to more than nine million older adults and people with disabilities — saving them an average of almost $4,000 a year on their Medicare prescription drug plan costs. To apply for extra help, there is an easy-to-use online application available at www.socialsecurity.gov.

To qualify for extra help, people must meet certain resource and income limits. The new Medicare law eases those requirements in two ways. First, it eliminates the cash value of life insurance from counting as a resource. Second, it eliminates the assistance people receive from others to pay for household expenses, such as food, rent, mortgage or utilities, from counting as income. There also is another important “twist” in the law. The application for extra help can now start the application process for Medicare Savings Programs — state programs that provide help with other Medicare costs. These programs help pay Medicare Part B (medical insurance) premiums. For some people, the Medicare Savings Programs also pay Medicare Part A (hospital insurance) premiums, if any, and Part A and B deductibles and co-payments.

To learn more about the extra help program and to view the new TV spot featuring Chubby Checker, go to www.socialsecurity.gov/extrahelp.

Individuals with various health conditions are often reluctant to leave jobs because they are afraid pre-existing condition clauses will limit coverage of any such conditions under a new insurance plan. HIPAA (Health Insurance Portability and Accountability Act of 1996) limits the amount of time an insurer can refuse to cover pre-existing conditions to twelve months. HIPAA also ensures that in some cases there is no waiting period for new coverage. However, an insurer is still not required to cover every condition and disability. In some cases, they can still deny coverage altogether for certain conditions as long as the decision is based on sound actuarial data.State laws may offer more generous protections than HIPAA. You may want to contact your state insurance commissioner’s office to ask about the law where you live. A good place to start is the Web site of the National Association of Insurance Commissioners at www.naic.org.

A “pre-existing condition” is considered to be any condition for which medical advice, diagnosis, care or treatment was recommended or received within the previous six-month period. The maximum amount of time a plan can refuse coverage for any such condition is twelve months. If an individual starts a new job and is subject to a waiting period before being eligible to join the health plan, the waiting period and twelve-month period for the pre-existing conditions must coincide.

The twelve-month period for pre-existing conditions may also be reduced if the individual provides the new insurance plan with proof of their prior health coverage. When leaving a health plan, the plan must provide you with a Certificate of Coverage which details the dates you were covered under the plan. This continuous coverage can be credited toward the pre-existing condition period, provided there was not a “significant break” in coverage between jobs – this is defined as sixty-three days.

Therefore, if you had at least twelve months of “creditable coverage” (which can be from a group health plan, HMO, individual health insurance policy, Medicare, or Medicaid) and then left your job and you started a new job within sixty-three days thereafter, the pre-existing condition period would not apply. Your condition would be covered immediately (provided that the plan regularly covers that condition). COBRA coverage can also be credited towards continuous coverage.

HIPPA can also help provide access to individual insurance when group coverage is not an option. HIPAA guarantees access to an individual plan if: the individual had group coverage for at least eighteen months; did not have their group coverage terminated because of fraud or nonpayment of premiums; is ineligible for COBRA or has exhausted COBRA benefits; and is not eligible for coverage under another group health plan.

Once you become eligible for Medicare, you will be inundated with offers from insurance companies for Medigap (supplemental insurance) policies.  Sorting through these offers can be confusing.  Not only are there 12 standardized plans, but there can be huge differences in premiums between companies.

Medicare plans A and B cover only a portion of medical costs.  Medigap policies are designed to fill in the “gaps” in coverage. The first step is to figure out what coverage you will need. The government created 12 standardized plans (Plans A through L).  Plans in Massachusetts, Minnesota, and Wisconsin have some extra options, so if you live in those states, check with the state department of insurance to find out the differences.
If you regularly see doctors who charge above what Medicare pays, Plans F, G, I, or J which cover excess charges, may be the right plan for you.
If you regularly travel outside the United States, Plans C, D, E, F, G, H, I, and J include coverage for this.
If you have a chronic condition with high medical bills, Plan K or L may work best. Both pay only a portion of covered expenses, but have a yearly out-of-pocket cap on medical expenses. Once you reach the cap, the policy pays 100 percent of all further medical services.

Once you’ve decided what type of coverage you need, the next step is to decide which company to buy from. Each plan covers the same medical services, but premiums can vary significantly from company to company. The companies use three different methods to set premiums: attained age, issue age, or community.

Attained-age policies set the premium based on your age, so the premium automatically increases as you get older. Before buying an attained age policy, check with the insurance company to get the premium costs for the next age increments, so you’ll know the level of increases to expect each year.
Issue-age policies set the premium at the age you first buy the policy. The premium will never be higher than the amount the company is charging new buyers at the same age. For example, suppose you buy the policy at age 65. In five years, the premium will be the amount the company is charging new 65-year-old buyers. While your premiums may increase, the increases may not be large because the company will keep premiums lower to attract new buyers.
Community policies charge the same price to everyone in your area regardless of your age. The premiums go up only when the insurance company raises premiums on all policies of the same type. These increases are regulated by state insurance departments.

While the premiums on an attained-age policy may be lower at first, it is generally better to buy an issue-age or community policy, which may be more expensive at first but doesn’t increase as much over time.

Following are some other things to keep in mind when choosing a policy:

Look for a company that has arranged to file Medigap claims automatically. Companies that offer automatic filing of claims with Medicare can save time and effort.
It is a good idea to purchase from a financially sound company. Make certain that the insurer is rated in the top two categories by one of the services that rates insurance companies, such as A.M. Best or Weiss.
Contact your state insurance department to find out if the insurance company has any complaints filed against it.

The American Recovery and Reinvestment Act of 2009 (known as the Stimulus Bill) provides a premium reduction to certain qualified individuals.  Individuals eligible for COBRA coverage who were involuntarily terminated by their employer on or after September 1, 2008 through December 31, 2009 who are eligible for COBRA and elect COBRA may be eligible to pay a reduced premium amount that is only 35 percent of the premium costs for the COBRA coverage.
The premium reduction for an individual ends upon eligibility for other group coverage (or Medicare), after 9 months from the beginning of the reduction, or when the maximum period of COBRA coverage ends, whichever occurs first.  The premium reduction provisions relate only to premiums for coverage periods beginning after the law was enacted –February 17, 2009.

If a person was terminated between September 1, 2008 and December 31, 2009 and was covered by an employer’s plan on their day of employment, the plan administrator should provide a notice of eligibility to elect COBRA and to receive a premium reduction.  Individuals involuntarily terminated during this period have the right to elect COBRA coverage even if they did not elect coverage when it was first offered; they may also do so if they did elect COBRA, but are no longer enrolled (for example, because they were unable to continue paying the premium). This election period begins February 17, 2009 and ends 60 days after the plan provides the required notice.

For more information the employer should be contacted directly to ask about getting the premium reduction, and how to reconcile any amounts that might have been overpaid after February 17, 2009.