What is Medigap Plan F?
Medicare Beneficiaries choose to supplement their Original Medicare benefits with additional coverage that helps to cover the gaps. For decades, Medigap Plan F has been a top seller. This is largely because it covers all of the deductibles, coinsurance, and copays that would normally be your responsibility after Original Medicare pays its share. Beneficiaries insured with Medicare Plan F pay nothing for doctor visits, lab work, surgeries, hospital stays, and much more.
This type of first-dollar coverage provides huge peace of mind to Medicare recipients as they age because their costs are predictable. If there is an illness that requires extensive treatment, they don’t need to worry about what kind of bills will be showing up in their mailbox.
However, in 2020, this will be changing because Plan F and Plan C are being discontinued.
Why Are Plans Being Discontinued?
In 2015, Congress passed the Medicare Access and CHIP Reauthorization Act. Part of this legislation will outlaw the sale of Medigap plans (on or after January 1st, 2020) that pay for the Part B deductible to a newly eligible Medicare beneficiary. In 2018, the annual Part B deductible is $183.
Since Plan C and F both pay for this deductible, they will no longer be available to new beneficiaries. The reasoning behind the law is that Congress doesn’t want people to have plans that pay for literally everything because that might encourage people to access medical care more often.
Individuals who know they must pay for their own Part B deductible once a year might think twice about visiting the doctor for a minor ailment. Fewer doctor visits equal less spending by Medicare itself.
Who Can Keep Medigap Plan C or F Coverage?
People who are already insured by a Medigap Plan C or F will be able to keep their coverage. It is only new enrollees who will not have the option to buy it.
What Are the Options?
Therefore, this leaves many current Medicare enrollees with some decisions to make: enroll in Plan F now so you can keep it or switch out of Plan F before it is discontinued.
Beneficiaries who stay insured on these plans could find that after 2020, the rates for these plans will begin to creep up. This is certainly possible, as the block of insured individuals will be aging with no new and younger policyholders joining the group.
Some beneficiaries are choosing to leave Plan F now and enroll in other Medigap plans that are not going away. Plan G is a good example. It covers all the same services that Plan F does except for the Part B deductible. Although Plan G policyholders will have to pay the Part B deductible if they incur any medical services, the premiums for Plan G are considerably lower, making that plan a good value either way.
We find that the majority of new Medicare Beneficiaries are selecting Plan G over Plan F because the cost saving far outweighs the $183 annual deductible. We can help you find the right Medicare Supplement Plan for your health needs and your budget. Call us at (512) 900-3008 or contact us via email, if you have any questions.