Soon your favorite Medicare Supplement, also known as a Medigap Plan will no longer be available. Congress has passed legislation that prevents companies from covering the Part B Deductible starting January 1, 2020. The change will make Medigap Plan C and the very popular Medigap Plan F unavailable for new sales. The impact on your Medicare Supplement premiums could be devastating.
Will This Affect Your Medicare Supplement Plan F Coverage
The law only affects plans going forward. If you currently have a Medigap Plan C or Medigap Plan F, they will be grandfathered and continue to cover the deductible which is currently $166.
Don’t Get Trapped in Your Medicare Supplement Plan F
If you currently own a Plan C or Plan F do not keep this coverage! New sales will stop and there won’t be any younger and healthier individuals entering the plan to offset the cost of the older insureds. With an aging block of insureds, rates will have to increase. As rates increase, anyone who is healthy enough to pass underwriting requirements will move to a new plan. This will make the situation even worse.
Why is Medigap Plan F Being Phased Out?
The change is an attempt to save Medicare money. It’s believed by having the Medicare beneficiary pay the deductible themselves, they’ll think twice before seeing the doctor. Of course, some argue this legislation could have the opposite effect. It could cause seniors to put off receiving needed health care and could potentially lead to them requiring more expensive services down the road.
Medigap Plan G Popularity
Currently, 20% of Medicare Supplement Plans sold are Medigap Plan G. After Plan F is phased out in 2020, it is likely to become the most popular choice. However, Plan G is also likely to become the guarantee issue plan of choice for seniors who delayed enrolling in Medicare due to other credible coverage. Although it is not yet clear if this will happen, if it does, it could have an adverse effect on Plan G rates.
More Changes to Medicare Starting in 2018
Another change under the Medicare Access and CHIP Reauthorization Act of 2015 has more affluent seniors paying more for their Part B Deductible in 2018. Individuals with an income between $133,500 to $214,000 (double for couples) will have to pay more. Also, the thresholds for individuals having to pay a higher premium for their Medicare Part B will be lowered.
Contact Medigap Planners
For a free no-obligation evaluation of your current plan and the available alternatives in your area give us a call. If you need to make changes, do it now!