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News Release

New Jersey Department of
Banking and Insurance

Commissioner Ken Kobylowski

October 30, 2014

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

Christie Administration Provides Tips for Consumers Reviewing Medicare Options during Open Enrollment

TRENTON – As Medicare beneficiaries in New Jersey find themselves in the midst of a new enrollment period that began October 15 and runs through December 7, 2014, New Jersey Department of Banking and Insurance Commissioner Ken Kobylowski today provided Garden State consumers with guidelines on what to think about when they are reviewing and considering making changes to their plans. With one month left in the open enrollment period, he also outlined basic Medicare options that senior citizens need to understand while reviewing coverage.

“Senior citizens face important decisions each year during the open enrollment period,” said Commissioner Kobylowski. “While their options may seem overwhelming at first, with guidance and careful review, they will be able to make the selections that best fit their health care needs, lifestyles and income levels.”

Commissioner Kobylowski defined key terms for consumers who are reviewing their Medicare coverage during open enrollment season:

Original Medicare: The traditional healthcare program for senior citizens administered by the federal government.

Medicare Advantage: Medicare plans sold by private insurance companies that provide healthcare benefits for senior citizens.

Medigap: Supplemental coverage that pays a portion of original Medicare out-of-pocket costs.

Premium: The monthly fee enrollees pay for Medicare coverage.

Deductible: What you must pay before Medicare starts paying for care.

Copayment/Coinsurance: The amount an enrollee must pay for each service.

Part A: Medicare hospital insurance for inpatient care.

Part B: Medicare medical insurance for outpatient care.

Part D: Medicare drug coverage.

Formulary: List of covered prescription drugs each plan provides.

Medicare Advantage Prescription Drug Plan (MA-PD): A private insurance company plan that provides both health and drug coverage.

Commissioner Kobylowski described the differences between Original Medicare, Medicare Part D and Medicare Advantage plans:

Original Medicare: can include Part A and Part B if the consumer decides to enroll in both. Additionally:

  • Consumers pay a deductible and/or coinsurance when receiving health care, which is typically 20 percent of the Medicare-approved cost for outpatient care;
  • There is no Part A premium for consumers with at least ten years U.S. work history;
  • Most consumers must pay a monthly premium for Part B;
  • Consumers may go to any doctor or hospital in the country that accepts Medicare;
  • No referrals or prior authorizations are needed for services;
  • Consumers may buy a Medigap plan for supplemental coverage; and
  • Those wanting Medicare drug coverage must buy a separate Prescription Drug Plan called Medicare Part D.

Individuals considering Original Medicare and desiring drug coverage will want to review their shopping options for available Medicare Part D plans. Things to remember include:

  • Covered medications may change from plan-to-plan and from one year to the next, so consumers should check the formulary to make sure their prescriptions are covered;
  • Premium prices may change, which means consumers should shop around to make sure they have the plan that best fits their needs;
  • Cost-sharing changes should also be verified as co-payments and coinsurance associated with drugs also vary;
  • Most plans charge a standard deductible, however some plans may lower the deductible. Some of these plans may be lowering the deductible while raising premiums in exchange. Consumers should review deductible and corresponding premium changes carefully; and
  • A majority of prescription drug plans offer lower cost-sharing requirements if filling prescriptions at selected preferred network pharmacies. Consumers should review their pharmacy to make certain it is part of a preferred network.

Medicare Advantage Plans offer an alternative to Original Medicare. They must cover the same Part A and Part B benefits as Original Medicare and also:

  • May cover extra benefits such as vision and dental care;
  • Private carriers generally offer common plan types such as Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Private-Fee-for-Service (PFFS) plans;
  • While containing similar Medicare coverage features, private plans come with different costs and restrictions;
  • Consumers typically pay a deductible and/or co-pay for services (generally a fixed co-pay, such as $15 per office visit);
  • Insureds still pay Medicare premiums and may pay an extra premium;
  • Beneficiaries typically use doctors and hospitals in the plan’s network;
  • Consumers may have to select a primary care doctor, get referrals to see specialists, and may be required to get prior authorization for certain procedures;
  • Can NOT buy Medigap supplemental insurance to pay for a portion of out-of-pocket health care costs;
  • Plans must have out-of-pocket maximums after which consumers pay nothing for the rest of the year; and
  • Those requiring Medicare drug coverage should sign up for an MA-PD plan.    

“Selecting the best Medicare coverage and provider that fits a consumer’s individual needs should not be done without understanding all the details and information available,” said Commissioner Kobylowski. “This Department will continue to assist seniors and consumers of all ages make financial decisions such as Medicare coverage selection that fits their needs.”

Check that the plan chosen is approved by Medicare at or by calling (800) MEDICARE, (800) 633-4227.

For health insurance inquiries or complaints, consumers can call either (609) 292-7272 or the Department Consumer Hotline (800) 446-7467, or file a complaint online at  

OPRA is a state law that was enacted to give the public greater access to government records maintained by public agencies in New Jersey.
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