The question I get more and more lately is this, “Is the Medicare Supplement/ Medigap Plan F going way?” The answer is Yes and No. Let me explain what is happening to the Plan F and Plan C and what you can do or should consider doing if you have one or think you may want one in the future.
A Medigap Plan F is a Medicare Supplement plan that picks up the costs that Medicare doesn’t cover. It pays second to Medicare. It picks up the Part A (Hospital) deductible, the Part B (Medical) deductible, Skilled nursing co-payment and the 20% cost share that Medicare does not cover. So basically, when you go to the doctor or hospital if it is covered by Medicare you should have no bills.
In 2015 Congress passed legislation called the Medicare Access and CHIP Reauthorization Act or (MACRA). MACRA is a federal program that redesigned several Medicare-related reporting and reimbursement structures. One of the main goals of MACRA is to provide a new system to promote compensation based on patient experience and outcomes vs. the old fee for service system. MACRA has many components to it and is an article on to itself.
One of the components to MACRA is that the Federal Government eliminated Medicare Supplement/ Medigap’s plans that cover the Part B deductible, which happens to be $185.00 in 2019. The two plans affected by this are the Plan F and the Plan C.
This new legislation will only affect individuals that are turning 65 or eligible for Part A and Part B after January 1st, 2020. If you are eligible for Part A prior to January 1, 2020 you can still get a Plan F or Plan C if you qualify. This also means if you turn 65 after January 1st , 2020 you can no longer get a Plan F or Plan C.
So, what do you do? It’s simple, you can get a Plan G. The plan G is kind of the replacement for the Plan F even though it’s been around for a few years. Here is the good news. The Plan G covers everything a Plan F covers except the Part B deductible, which is $185.00 annually in 2019. So, when you have a Plan G when you go the doctor or use your Medical benefits (Part B) for the first time each year, you will be responsible for the first $185.00. After you pay the Part B deductible, $185.00 for 2019, all allowable expenses will be covered.
How can this be good news? It is good news because the premium difference between the Plan F and Plan G can more than make up for the Part B deductible you will be paying. The difference can be anywhere between $50 and often more than $100.00 per month more for a Plan F vs a Plan G. I don’t know about you, but I sure don’t want to spend even $50.00 more a month, that’s $600.00 a year in premium to cover $185.00. It often does not make financial sense to have Plan F over a Plan G regardless of how long you have had your Plan F. I recently was able to save a 74-year-old couple over $900.00 just by switching from a Plan F to a Plan G.
What if you already have a Plan F? If you already have a Plan F you can keep it. Chances are if you have recently or are currently dealing with any health issues you would want to consider hanging on to your Plan F since you may not pass underwriting for a new Plan G. The other option is to apply for a Plan G and see if there is significant savings. In order to switch you will have to go through underwriting or answer health questions. You must pass underwriting in order to switch. If you feel relatively good about your health it may be a great way to have the same quality benefits, minus the Part B deductible of course, and potentially save hundreds of dollars a year.
If you have more questions about the Plan F being phased out or would like to see if can qualify for a lower cost Plan G please give me a call at 804-405-3350.