Medicare Supplement, or Medigap, is a program used to help pay traditional Medicare costs, those of Part A and Part B. Though Medigap is a dependable option for many seniors who cannot pay various out-of-pocket costs like co-insurance, co-pays, and deductibles, it is facing some changes. Many of these changes involve the closing of popular Medigap plans.
Medigap Plans That Are Ending Soon
There are 10 Medigap plans, each denoted by a letter of the alphabet. These plans are mostly the same nationwide in terms of benefits, regardless of the insurance company you choose. You can customize what kind of gaps you’ll be paying for by choosing a plan best suited for your health insurance needs.
However, Medigap is not static and some of its most popular plans are facing termination.
Medigap Plan F
Medigap Plan F is one of two Medicare Supplement plans that cover Medicare Part B excess charges (the other is Medigap Plan G). Essentially, Plan F keeps you from paying additional out-of-pocket costs for doctors’ costs that Medicare doesn’t cover. Besides covering 100% of the excess charges, Plan F also has coverage for Part A and B deductibles.
On January 1, 2020, Medicare Supplement Plan F will close for new Medicare beneficiaries. Those enrolling in Medicare for the first time during this period will not be permitted to enroll in Medigap Plan F. The root of this change is the Medicare Access and CHIP Reauthorization Act of 2015.
Medigap Plan C
Medigap Plan C is one of the more comprehensive supplement plans, only surpassed in coverage by Plan F. Medigap Plan C covers Medicare Part A hospital and hospice co-insurance, Medicare Part B copayments and co-insurance and several other payments.
Medigap Plan C is also being phased out and will end on January 1, 2020, like Plan F, as part of The Medicare Access and CHIP Reauthorization Act of 2015. Plan C will also be closed off from new enrollees to reduce government spending on Medicare.
Medicare Part B: The Reason Behind the Extinction of These Plans
Medicare Supplement Plan F and Plan C have something major in common – which is the reason behind their extinctions. Both of them are classed as “first-dollar” coverage plans because they both cover the Part B deductible. This means beneficiaries have access to non-emergency medical care without paying an annual deductible. These plans render the premium as the only cost for Part B.
Some proponents of The Medicare Access and CHIP Reauthorization Act of 2015, which discontinues these two plans, argue that Plan F and Plan C lead to overconsumption of health care service use.
The rationale lies in the fact that beneficiaries have either no or little out-of-pocket costs to pay under Plan F and C, aside from the premium. Proponents of the plan contend that there will be less consumption of services, therefore less government spending without these plans.
How The Extinction Will Affect You
The extinction of Medigap Plan F and Plan C will not affect beneficiaries who have enrolled in these plans before January 1, 2020. However, if current beneficiaries of Plan F or C want to change their Supplement insurance carrier and keep their same plan letter, they can do so as long as it is before 2020.
As for beneficiaries who are new to Medicare in 2020, they will still have eight other Medicare Supplement plans to enroll in: A, B, D, G, K, L, and N. They will have to pay for the Medicare Part B deductible and other costs out of pocket. The Part B deductible will likely have risen by 2020, as it has already increased by 13% between 2015 and 2016.
Enrolling In Medigap Plan F and C
Medigap Plan F and C are two of the most popular Medicare Supplement plans, with six million members enrolled in Plan F and 11.2 million enrolled in Plan C in 2014. Given that these plans can help save money and allow for more non-emergency medical doctors visits, it is important to enroll in these plans if they fit your needs, now more than ever since they will be phased out in 2020.