TIPS ON SHOPPING FOR HEALTH INSURANCE

TIPS ON SHOPPING FOR HEALTH INSURANCE


Shop Carefully Before You Buy. Policies differ as to
coverage and cost, and companies differ as to service. Contact
different companies and compare the premiums before you buy.

Don't Buy More Policies Than You Need. Duplicate coverage
is expensive and unnecessary. A single comprehensive policy is
better than several policies with overlapping or duplicate
coverage. Federal law prohibits issuing duplicative coverage to
Medicare beneficiaries even if both policies would pay full
benefits. The law generally prohibits the sale of a Medicare
supplement policy to a person who has Medicaid or another
health insurance policy that provides coverage for any of the
same benefits.

Similarly, the sale of any other kind of health insurance
policy is generally prohibited if it duplicates coverage you
already have. When you buy a replacement Medigap policy, the
insurer is required to obtain your written statement that you
intend to cancel the first policy after the new policy becomes
effective. If you are on Medicaid, insurers may not sell you a
Medigap policy unless the state pays the premium. Anyone who
sells you a policy in violation of these anti-duplication
provisions is subject to criminal and/or civil penalties under
federal law. Call 1-800-638-6833 to report suspected
violations.

Consider Your Alternatives. Depending on your health care
needs and finances, you may want to consider continuing the
group coverage you have at work; joining an HMO, CMP or other
managed care plan; buying a Medigap policy; or buying a
longterm care insurance policy.

Check For Preexisting Condition Exclusions. In evaluating
a policy, you should determine whether it limits or excludes
coverage for existing health conditions. Many policies do not
cover health problems that you have at the time of purchase.
Preexisting conditions are generally health problems you went
to see a physician about within the 6 months before the date
the policy went into effect.

Don't be misled by the phrase "no medical examination
required." If you have had a health problem, the insurer might
not cover you immediately for expenses connected with that
problem. Medigap policies, however, are required to cover
preexisting conditions after the policy has been in effect for
6 months.

Beware of Replacing Existing Coverage. Be careful when
buying a replacement Medigap policy. Make sure you have a good
reason for switching from one policy to another--you should
only switch for different benefits, better service, or a more
affordable price. On the other hand, don't keep inadequate
policies simply because you have had them a long time. If you
decide to replace your Medigap policy, you must be given credit
for the time spent under the old policy in determining when any
preexisting conditions restrictions apply under the new policy.
You must also sign a statement that you intend to terminate the
policy to be replaced. Do not cancel the first policy until you
are sure that you want to keep the new policy.

Prohibited Marketing Practices. It is unlawful for a
company or agent to use high pressure tactics to force or
frighten you into buying a Medigap policy, or to make
fraudulent or misleading comparisons to get you to switch from
one company or policy to another. Deceptive "cold lead"
advertising also is prohibited. This lactic involves mailings
to identify individuals who might be interested in buying
insurance. If you fill in and return the card enclosed in the
mailing, the card may be sold to an insurance
agent who will try to sell you a policy.

Be Aware of Maximum Benefits. Most policies have some type
of limit on benefits. They may restrict either the dollar
amount that will be paid for treatment of a condition or the
number of days of care for which payment will be made. Some
insurance policies (but not Medigap policies) pay less than the
Medicare-approved amounts for hospital outpatient medical
services and for services provided in a doctor's office. Others
do not pay anything toward the cost of those services.

Check Your Right to Renew. States now require that Medigap
policies be guaranteed renewable. This means that the company
can refuse to renew your policy only if you do not pay the
premiums or you made material misrepresentations on the
application. Beware of older policies that let the company
refuse to renew on an individual basis. These policies provide
the least permanent coverage.

Even though your policy may be guaranteed renewable. the
company may adjust the premiums from time to time. Some
policies have premiums which increase as you grow older.

Be A ware That Policies to Supplement Medicare Are Neither
Sold Nor Serviced by the State or Federal Governments. State
insurance departments approve policies sold by insurance
companies but approval only means the company and policy meet
requirements of state law. Do not believe statements that
insurance to supplement Medicare is a government-sponsored
program.

If anyone tells you that they are from the government and
later tries to sell you an insurance policy, report that person
to your state insurance department or federal authorities. This
type of misrepresentation is a violation of federal and state
law. It is also unlawful for a company or agent to claim that a
policy has been approved for sale in any state in which it has
not received state approval, or to use fraudulent means to gain
approval.

Know With Whom You're Dealing. A company must meet certain
qualifications to do business in your state. You should check
with your state insurance department to make sure that any
company you are considering is licensed in your state. This is
for your protection. Agents also must be licensed by your state
and may be required by the state to carry proof of licensure
showing their name and the company they represent. If the agent
cannot verify that he or she is licensed, do not buy from that
person. A business card is not a license.

Keep Agents' and/or Companies' Names, Addresses and
Telephone Numbers. Write down the agents' and/or companies'
names, addresses and telephone numbers or ask for a business
card that provides all that information.

Take Your Time. Do not be pressured into buying a policy.
Principled salespeople will not rush you. If you are not
certain whether a program is worthy, ask the salesperson to
explain it to a friend. Keep in mind, however, that there is a
limited time period in which new Medicare Part B enrollees can
buy the Medigap policy of their choice without conditions being
imposed (see page 11). Once this open enrollment period
elapses, you may be limited as to the Medigap policies
available to you, especially if you have a preexisting health
condition.

If You Decide To Buy, Complete the Application Carefully.
Do not believe an insurance agent who tells you that your
medical history on an application is not important. Some
companies ask for detailed medical information. If you leave
out any of the medical information requested, coverage could be
refused for a period of time for any medical condition you
neglected to mention. The company also could deny a claim for
treatment of an undisclosed condition and/or cancel your
policy.

Look For an Outline of Coverage. You must be given a
clearly worded summary of the policy... READ IT CAREFULLY.

Do Not Pay Cash. Pay by check, money order or bank draft
made payable to the insurance company, not to the agent or
anyone else. Get a receipt with the insurance company's name,
address and telephone number for your records.

Policy Delivery or Refunds Should be Prompt. The insurance
company should deliver a policy within 30 days. If it does not,
contact the company and obtain in writing the reason for the
delay. If 60 days go by without a response, contact your state
insurance department.

Use the "Free-Look" Provision. Insurance companies must
give you at least 30 days to review a Medigap policy. If you
decide you don't want the policy, send it back to the agent or
company within 30 days of receiving it and ask for a refund of
all premiums you paid. Contact your state insurance department
if you have a problem getting a refund.


For Your Protection


As noted above, federal criminal and civil penalties can
be imposed against anyone who sells you a policy that
duplicates coverage you already have unless you sign a
statement declaring that the first policy will be cancelled, or
unless you have Medicaid and the state Medicaid agency pays the
premium for your Medigap policy. Penalties may also be imposed
for claiming that a policy meets legal standards for federal
certification when it does not, and for using the mail for the
delivery of advertisements offering for sale a Medigap policy
in a state in which it has not received state approval.

Additionally, it is illegal under federal law for an
individual or company to misuse the names, letters, symbols or
emblems of the U.S. Department of Health and Human Services,
the Social Security Administration, or the Health Care
Financing Administration. It also is illegal to use the names.
letters, symbols or emblems of their various programs.

This law is aimed primarily at mass marketers who use this
information on mail solicitations to either imply or claim that
the product they are selling whether it be insurance or
something else--has either been endorsed or is being sold by
the U.S. government. The advertising literature used by these
organizations is often designed to look like it came from a
government agency.

If you believe you have been the victim of any unlawful
sales practices, contact your state insurance department
immediately. If you believe that federal law has been violated,
you may call 1-800-638-6833. In most cases, however, your state
insurance department can offer the most assistance in resolving
insurance related problems.


Standard Medigap Plans


Following is a list of the 10 standard plans and the
benefits provided by each:


PLAN A (the basic policy) consists of these basic benefits:


* Coverage for the Part A coinsurance amount ($174 per day
in 1994) for the 61st through the 90th day of
hospitalization in each Medicare benefit period.

* Coverage for the Part A coinsurance amount ($348 per day
in 1994) for each of Medicare's 60 non-renewable lifetime
hospital inpatient reserve days used.

* After all Medicare hospital benefits are exhausted,
coverage for 100% of the Medicare Part A eligible hospital
expenses. Coverage is limited to a maximum of 365 days of
additional inpatient hospital care during the
policyholder's lifetime. This benefit is paid either at
the rate Medicare pays hospitals under its Prospective
Payment System or another appropriate standard of payment.

* Coverage under Medicare Parts A and B for the reasonable
cost of the first three pints of blood or equivalent
quantities of packed red blood cells per calendar year
unless replaced in accordance with federal regulations.

* Coverage for the coinsurance amount for Part B services
(generally 20% of approved amount; 50% of approved charges
for mental health services) after $100 annual deductible
is met.


PLAN B includes the basic benefits plus:


* Coverage for the Medicare Part A inpatient hospital
deductible ($696 per benefit period in 1994).


PLAN C includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care coinsurance
amount ($87 per day for days 21 through 100 per benefit
period in 1994).

* Coverage for the Medicare Part B deductible ($100 per
calendar year in 1994).

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.


PLAN D includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care daily
coinsurance amount.

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.

* Coverage for at-home recovery. The at-home recovery
benefit pays up to $1600 per year for short-term, at-home
assistance with activities of daily living (bathing,
dressing, personal hygiene, etc.) for those recovering
from an illness, injury or surgery. There are various
benefit requirements and limitations.


PLAN E includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care daily
coinsurance amount.

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.

* Coverage for preventive medical care. The preventive
medical care benefit pays up to $120 per year for such
things as a physical examination, flu shot, serum
cholesterol screening, hearing test, diabetes screenings,
and thyroid function test.


PLAN F includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care daily
coinsurance amount.

* Coverage for the Medicare Part B deductible.

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.

* Coverage for 100% of Medicare Part B excess charges. *


PLAN G includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care daily
coinsurance amount.

* Coverage for 80% of Medicare Plan B excess charges.*

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.

* Coverage for at-home recovery (see Plan D).


PLAN H includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care daily
coinsurance amount.

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.

* Coverage for 50% of the cost of prescription drugs up to a
maximum annual benefit of $1,250 after the policyholder
meets a $250 per year deductible (this is called the
"basic" prescription drug benefit).


PLAN I includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care daily
coinsurance amount.

* Coverage for 100% of Medicare Part B excess charges. *

* Basic prescription drug coverage (see Plan H for
description).

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.

* Coverage for at-home recovery (see Plan D).


PLAN J includes the basic benefits plus:


* Coverage for the Medicare Part A deductible.

* Coverage for the skilled nursing facility care daily
coinsurance amount.

* Coverage for the Medicare Part B deductible.

* Coverage for 100% of Medicare Part B excess charges. *

* 80% coverage for medically necessary emergency care in a
foreign country, after a $250 deductible.

* Coverage for 50% of the cost of prescription drugs up to a
maximum annual benefit of $3,000 after the policyholder
meets a $250 per year deductible (this is called the
"extended" drug benefit).

* Plan pays a specified percentage of the difference between
Medicare's approved amount for Part B services and the
actual charges (up to the amount of charge limitations set
by either Medicare or state law).

[Graphic Omitted]

Basic Benefits pay the patient's share of Medicare's
approved amount for physician services (generally 20%) after
$100 annual deductible, the patient's cost of a long hospital
stay ($174/day for days 60-90, $348/day for days 91-150,
approved costs not paid by Medicare after day 150 to a total of
365 days lifetime), and charges for the first 3 pints of blood
not covered by Medicare.


Two prescription drug benefits are offered:


1. a "basic" benefit with $250 annual deductible, 50%
coinsurance and a $1,250 maximum annual benefit (Plans H
and I above), and

2. an "extended" benefit (Plan J above) containing a $250
annual deductible, 50% coinsurance and a $3,000 maximum
annual benefit.

Each of the 10 plans has a letter designation ranging from
"A" through "J". Insurance companies are not permitted to
change these designations or to substitute other names or
titles. They may, however, add names or titles to these letter
designations. While companies are not required to offer all of
the plans, they all must make Plan A available if they sell any
of the other 9 in a state.