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THE CHANGES in Medicare coverage that took effect this year require all older Americans to re-evaluate their health insurance needs and their current policies.

Those who do so may find they have unnecessary duplicate coverage, or that supplemental Medicare insurance coverage they purchased from a private insurer does not offer much additional protection.

To figure out what you need, you have to understand Medicare: Even though Medicare coverage was improved by Congress last year, major gaps remain, says Consumer Reports, the monthly magazine published by the non-profit advocacy group, Consumers Union.

The changes to Medicare have eliminated many of the co-payment liabilities for Medicare beneficiaries, which forced them to pay part of the cost of hospital services. Beneficiaries pay just one $560 annual deductible in 1989; the deductible increases each subsequent year.

But the majority of Medicare beneficiaries who pay a monthly premium for Part B coverage, which includes coverage of doctors' bills, face a big gap: Medicare pays only a portion of most doctors' bills and the rest has to be picked up by the patient.

Some doctors accept the Medicare payment as payment in full, but the majority do not and bill their patients an average of 37 percent more than what Medicare pays, Consumer Reports says. Even if your doctor accepts Medicare's allowance as payment in full, you may someday need the services of an expensive specialist who does not, the magazine warns.

So what Medicare refers to as a doctor's "excess charge" is the big gap that needs to be covered by a supplemental policy, it says.

Coverage of excess doctors' charges by private insurers varies greatly, the magazine found in examining policies offered by 25 of the biggest insurers.

Some pay a large percentage of the excess charges, while others pay little or nothing.

Many of those policies that do pay for a big chunk of excess charges -- and which earned high marks from Consumer Reports for doing so -- are not sold in New York.

One that is sold here is a joint venture of Prudential Insurance (800-523-5800) and the American Association of Retired Persons -- the AARP Comprehensive Medicare Supplement, which pays 100 percent of those excess charges that it says are "all usual and prevailing charges above the allowable charge."

Note that this and similar definitions offered by insurers mean they do not guarantee they will pay
every penny of a bill you receive from the doctor -- if they deem a doctor's excess charges to be above what they consider to be the "usual and prevailing charge," then they will not pay for all of it.

Note also that the Prudential/AARP policy that earned high ratings is not the most popular of AARP's offerings because it is expensive: the monthly premium in New York is $97.50. AARP's more popular Medicare Supplement Plus policy is cheaper, but pays nothing toward excess doctors' charges.

But the Prudential/AARP policy has one big advantage over many other private policies -- it will insure anyone who is a member of AARP, while many other companies take only low-risk customers and exclude applicants with poor medical histories.

Another top policy identified by Consumer Reports is the Secure Care Preferred policy offered by National Home Life (800-252-1053).

This may seem surprising, since National Home is one of those direct sellers who use television personalities to hawk their wares and who have been criticized by insurance regulators in some states for running misleading ads. National Home has used Art Linkletter in its ads.

But Consumer Reports found that National Home's policy contained few restrictions, is sold at low cost ($50 a month in other states; the New York rate is not yet set), and pays a good portion of excess doctors' charges. Incidentally, the magazine said it viewed the firm's recent television commercials and
found them "free from the misleading statements of previous offerings."

National Home's policy is not yet sold in New York -- the company has submitted the policy to the state Insurance Department and hopes to get approval soon, a spokesman said. The Insurance Department probably will rule on the policy application within a few weeks, a department spokesman said.

Consumer Reports did not rate most of the Medicare supplemental policies sold in New York. Medicare beneficiaries who want to compare the benefits offered by all policies sold here will have to wait until July, when the Insurance Department will begin offering updated versions of its free, comprehensive guide to these policies.

In the meantime, the magazine offers some other guidelines for shoppers:

Do not buy more than one supplemental policy. "One good policy will cost less and do the job of several inadequate ones," the magazine says.

If you are eligible for Medicaid -- the supplemental government insurance program for people with low incomes -- do not buy a private supplemental policy.

Consider joining a health maintenance organization, which might be less costly than buying a policy.

If your former employer offers health insurance for retirees, take it, even if you pay part of the cost. Such policies often pay excess doctors' charges.

Avoid policies that pay a flat amount for hospital stays, individual diseases, or particular accidents.

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