First-Dollar Coverage Medicare Supplement Plans in 2020
A “first-dollar coverage Medicare plan” refers to a Medicare Supplement Insurance (Medigap) plan that doesn’t require you to first satisfy a deductible before your coverage kicks in.
In other words, your plan coverage takes effect with the “first dollar” you spend on covered care.
Medicare Part A and Part B each require a deductible. Several Medicare Supplement Insurance (Medigap) plans provide first-dollar coverage for Medicare Part A, meaning that you don’t have to pay any Part A deductible costs.
Beginning in 2020, however, the two Medigap plans that cover the Part B deductible (Plan F and Plan C) will no longer be available to newly eligible Medicare beneficiaries.
What’s Happening to First-Dollar Coverage Medicare Plans F and C in 2020?
As a result of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Medigap first-dollar coverage of the Part B deductible will be restricted to beneficiaries who became eligible for Medicare prior to January 1, 2020.
Anyone who becomes eligible for Medicare on or after Jan. 1, 2020, will not be allowed to enroll in either Medigap Plan F or Plan C, both of which provide first-dollar coverage of Medicare Part B services.
If you are already enrolled in Plan F or Plan C prior to January 1, 2020, you will be allowed to keep your Medigap plan.
If you are eligible for Medicare before Jan. 1, 2020, you can still be able to enroll in either Plan F or Plan C if they are available where you live.
Plan F and Plan C are both popular Medigap plans. In 2017, 55% of all Medigap beneficiaries were enrolled in Plan F, while 6% of all Medigap beneficiaries were enrolled in Plan C.1
In 2019, the Medicare Part B deductible is $185 per year.
Is Medicare Plan G Now Better Than Plan F?
Plan F is the only Medicare Supplement plan that covers all nine of the benefit areas covered by standardized Medicare Supplement plans.
Staring in 2020, the Medigap plan that covers the most benefits for newly-eligible Medicare beneficiaries will be Medicare Plan G, which covers all possible Medigap benefits except the Part B deductible.
Medigap Plan G is increasingly popular. In 2017, 13% of all Medigap beneficiaries were enrolled in Plan G. This was 31% increase from the previous year, which was by far the sharpest enrollment increase of any Medigap plan.1
Why Is Medicare Plan F Being Discontinued for New Medicare beneficiaries?
The idea behind the MACRA legislation was to force Medicare Part B beneficiaries to maintain some “skin in the game.” That is, the belief is that Medicare beneficiaries may be more invested in their outpatient medical care if they aren’t able to visit the doctor without paying out-of-pocket costs.
Proponents of the rule say that people will think twice about visiting the doctor for every little pain or sniffle, because they will have to pay at least some costs out of pocket for the appointment. The intended result would be less-crowded waiting rooms and lower overall health care costs.
Critics argue that eliminating first-dollar coverage might cause some people to forego care, resulting in more expensive care (or more serious health effects) later on.
Which Medigap Plans Offer First-Dollar Coverage of Medicare Part A?
If you become eligible for Medicare on or after January 1, 2020, you will be able to apply for one of seven Medigap plans that provide coverage of the Part A deductible (depending on your local plan selection).
Those who were eligible for Medicare prior to Jan. 1, 2020, can also apply for a plan that offers first-dollar coverage of Part A with Medigap Plan C and Plan F, which both provide 100 percent coverage of the Part A deductible.
The chart below shows the benefits that are offered by each of the 10 standardized 2019 Medigap plans available in most states.
How Much Does the Medicare Part A Deductible Cost?
While some health insurance deductibles operate on an annual basis, the Medicare Part A deductible is not an annual deductible.
The Part A deductible is based on a “benefit period.”
A benefit period begins the day you are admitted to the hospital as an inpatient.
A Part A benefit period ends once you have not been an inpatient for at least 60 consecutive days.
It’s possible for a Medicare beneficiary to accrue more than one benefit period within the same calendar year. In this case, you have to pay the full Part A deductible for each benefit period.
In 2019, the Part A deductible is $1,364 for each benefit period.
How Can I Find First-Dollar Medicare Supplement Plans?
If you became eligible for Medicare before Jan. 1, 2020, you may still be able to apply for a Medigap plan that provides first-dollar coverage for Medicare Part B, if one is available where you live.
If you don’t become eligible for Medicare until after that date, you may be able to apply for first-dollar Medicare Supplement coverage of Medicare Part A, if one of these Medigap plans is available in your area.
Call today to speak with a licensed insurance agent who can help you compare Medigap plans in your area to find a plan that works for your coverage needs.
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1 AHIP. State of Medigap 2019. (May, 2019). Retrieved from www.ahip.org/wp-content/uploads/IB_StateofMedigap2019.pdf.
Christian Worstell is a health care and policy writer for MedicareSupplement.com. He has written hundreds of articles helping people better understand their Medicare coverage options.