Medicare has major coverage gaps, most notably that Part B pays only 80 percent of covered expenses, and the other 20 percent must be paid by the consumer. When you purchase a Medicare Supplement plan from a private insurer, you close that gap. These supplement plans have been growing in popularity over the years, mainly plans C and F. Congress has ruled to eliminate these two plans in the year 2020.
The legislation called the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), ruled that as of January 1, 2020, all newly eligible Medicare recipients cannot sign up for a supplemental plan that covers the Medicare Part B deductible. This means that Medicare Supplement Plans (also called Medigap Plans) C and F will be eliminated. However, those who are enrolled in Plan C or F as of December 31, 2019 will be “grandfathered” and continue with the plan as long as they want.
Why the changes?
Medicare is experiencing a growing financial strain from the ongoing enrollment of the Baby Boomer generation. This created a non stop increase of costs of health insurance. In an attempt to control costs by reducing claims, Congress decided it made sense to have Medicare recipients be responsible for more of their out-of-pocket medical expenses.
Medicare covers 80% of your outpatient benefits and Plan F covers both your Part A and B deductibles as well as the other 20%. Medicare Supplement Plan F is considered the Cadillac of all the supplement plans because it provides first dollar coverage, covering all the gaps in Medicare, leaving you with $0 out of pocket. People with Plan F have no copays for services that are Medicare-covered including copays at the doctor. Medicare Supplement Plan C is similar but does not include Medicare excess charge coverage
Lawmakers want to reduce medical misuse because they believe having this type of coverage leads to overuse of healthcare services. They fear that the people who have these plans will utilize it for every little thing like a cough, and run to the doctor because once the deductible is paid off, there are no co-pays, deductibles, or network of doctors to follow you. However, if you paid for your own deductible then you would reconsider doctor visits for minor things.
How will this affect policyholders?
People who are grandfathered can continue to hold onto Plan F indefinitely. When the new change occurs in 2020, we will expect Medicare Supplement Plan F premiums to rise annually due to less people being enrolled.You can switch insurers, so if someone offers a better price, then you can apply to change to that insurance company’s policy.
If you are not grandfathered in and you cannot purchase plans F or C after January 1, 2020, you will want to consider plan G. Medicare Supplement Plan G is commonly known as the plan with the best value plan. Plan G has the same exact benefits as Plan F, but Plan G requires you to pay the annual Medicare Part B Deductible.
There are some concerns with the elimination of these plans. This could lead to consumers to not seeking treatment, which could lead to missing an early diagnosis and advanced health conditions. Essentially this will be more difficult and costly to treat, which defeats the money saving purpose Medicare began covering more preventative benefits.
With these changes ahead, you should plan for the financial impact it will have on you. If you need to compare, or would like to switch Medicare Supplement plans, contact EZ.Insure. A trained agent is always ready to help guide you. We can be contacted through email at [email protected] or by phone, 888-753-7207. Our agents will walk you through your options and help you find a plan with the right coverage within your budget. No hassle & no obligation, do it the easy way.