Two popular Medigap plan options in the United States are ending in the near future.
Medigap Plan F and Plan C are going away because of a new law that no longer allows Medigap policies to cover Medicare Part B deductibles after 2020. Newly eligible Medicare beneficiaries will not be able to purchase these two plans starting in 2020.
This decision could impact millions of Medicare beneficiaries.
Medigap Plan F and Plan C are the two most popular Medigap plan options (also referred to as Medicare Supplement Insurance plans). Two out of 3 Medigap enrollees had either Medigap Plan F or Medicare Supplement Insurance Plan C according to 2014 data from America’s Health Insurance Plans.
But there is a way to secure your Plan F or Plan C coverage today.
Medigap Plan F and Medigap Plan C explained
Medicare Supplement Insurance Plan C and Plan F are two of the most popular Medigap plan options because they both provide comprehensive coverage to beneficiaries.
Over 6 million people were enrolled in Plan F, and nearly 1.1 million people had Plan C, according to 2014 Medicare Supplement plans data from America’s Health Insurance Plans.
But all of that might change soon.
Beginning on January 1, 2020, new Medicare beneficiaries will not be able to enroll in Medigap Plan F or Plan C. This is because of a new bill called the Medicare Access and CHIP Reauthorization Act of 2015.
Plans F and C, which cover the Medicare Part B deductible, are being discontinued in an attempt to reduce total Medicare spending by the Government.
Plan F and Plan C are both referred to as “first-dollar” coverage plans because they cover the annual Medicare Part B deductible. This benefit allows policyholders to get non-emergency medical care without having to pay an annual deductible. That’s why it’s big news that these plans that cover so many Medicare costs are ending.
The 2015 Act has created concern among some Medicare beneficiaries, according to Daniel Esposito, a licensed insurance agent for TZ Insurance Solutions.
“People out there that have Plan F are concerned,” he said. “They’re wondering: What’s going to happen with my plan?”
How Medigap plans going away impacts you
If you’re a current Medicare beneficiary and want your Medigap plan to pay for the Medicare Part B deductible, you should enroll in Plan F or Medigap Plan C before the year 2020.
Unless new plans are added, most new Medicare beneficiaries in 2020 will only have 8 Medigap plan options to choose from: Plans A, B, D, G, K, L, M, and N.
If you’re a new Medicare beneficiary starting in 2020, you will not be able to enroll in what is now Medigap Plan C or Plan F, and you will not have coverage for the Medicare Part B deductible benefit. This means you will have to pay the Medicare Part B deductible out of pocket. If you use Medicare Part B services, you must pay the annual deductible, which is $183 as of 2017. The Part B deductible may increase in future years.
Esposito thinks that there is a high probability the Part B deductible will increase at a higher rate than we are used to seeing especially due to the recent increase.
Current Medigap policyholders
If you are currently enrolled in Medicare Supplement Plan C or Plan F, you can still take action today.
Esposito said that if you are currently enrolled in Plan F or Plan C and want to switch carriers before 2020, you should switch as soon as possible to lock in the current rates. He believes that insurance carriers may increase premiums in the future.
“Plan F holders may want to make sure Plan F is the right plan for them and make changes while they are healthy and still able to qualify for a new plan,” he said.
Esposito said one of the best things about Medigap plans is that you can change plans at any time.
“You don’t have to wait for Annual Enrollment,” he said. “If you want to pay less money and you want to get a better deal, you can go get a better deal.”
Choosing the best Medicare Supplement Insurance company
Whether you are switching to a new insurance carrier or enrolling for the first time, it is important to buy a Medigap plan from a stable and trusted insurance company.
Remember — the only differences between one insurance company’s Medigap Plan F and another company’s Plan F are the price and the company itself.
Esposito recommends choosing an insurance company with an A+ rating from rating companies such as A.M. Best Company and the Better Business Bureau.
“A+ rated companies have the ability to not only pay their claims but they have the financial stability to have stable rates,” he said.
Lower rated carriers or new insurance carriers may offer lower premiums at first, but they might increase premiums drastically from year to year, or after the introductory rates are over.
You can get a free quote from A+ rated insurance companies and see how the new law will impact your Medigap coverage by calling a licensed insurance agent today.
Don’t wait to secure your preferred Medigap plan. If you switch to Medigap Plan F or Plan C today, you will have coverage of the Medicare Part B deductible, even if the deductible increases in future years.
“If you are uncertain about plan F or the future of Plan F, give us a call,” Esposito said.