Changes to Your Medigap Options Starting in 2020
Find out how this change will affect your coverage choices moving forward.
Starting in 2020, there is a big change to your options for Medicare Supplements, also known as Medigap.
The two Medigap plans that covered the cost of the Medicare Part B deductible are no longer available for purchase to those newly eligible for Medicare.
Those two Medigap plans, Plan C and Plan F, both allow their beneficiaries to receive all Part B covered services without paying any out-of-pocket costs.
These Medigap plans have been phased out as a result of Congress passing the Medicare Access and Chip Reauthorization Act (MACRA).
What Happened to Medigap Plan F?
Plan F has long enjoyed a reputation as the most popular Medigap plan thanks to its expansive coverage. So why is it no longer a Medigap plan option for the newly eligible to Medicare?
Plan F was phased out as part of the Medicare Access and CHIP Reauthorization Act of 2015 passed by Congress.
The intention behind this legislation was to overhaul the way doctors are paid by Medicare while reducing beneficiary over-use of the healthcare system.
Without a Medigap plan that covers the Medicare Part B deductible, beneficiaries must pay at least $198.00 (2020) in Part B services before their coverage kicks in. Medicare Part B covers services like doctor visits, preventive care, outpatient medical services, and more.
Proponents of the change claim that making beneficiaries pay this amount will avoid unnecessary trips to the doctor and therefore unnecessary costs to the Medicare system.
Whether or not this approach works has yet to be seen.
Critics of this change argue that it will likely lead to beneficiaries forgoing important medical care in the short term and lead to more expensive care down the road, thus costing Medicare more as an end result.
It is also likely that the change will simply lead more Medicare beneficiaries to join Medicare Advantage plans, as these plans are still allowed to cover the Part B deductible.
High Deductible Plan F 2020
This change includes the High Deductible Plan F option, which many have come to find as an attractive alternative to the traditional Plan F.
The High Deductible Plan F often carries the lowest premium among Medigap options and is about a third of the cost of traditional Plan F.
The High Deductible Plan F requires that beneficiaries pay the high annual deductible of $2,300 for out-of-pocket expenses not covered by Medicare, before the plan picks up coverage of those expenses.
What Happened to Medigap Plan C?
Just as with Medigap Plan F, Medigap Plan C will no longer be an option for the newly eligible to Medicare.
The two plans are nearly identical in their coverage with only one exception: Plan F covers Medicare Part B excess charges, whereas Plan C does not.
This allows Plan C to typically be a less expensive option than Plan F. Though, excess charges can be pricy with some doctors charging up to an additional 15% on the Medicare allowable amount.
However, since Plan C also offers coverage of the Part B deductible, it has been phased out, as well.
What Happens to My Plan F Coverage?
If you currently have Medigap Plan F or Plan C, you may be wondering how your plan is affected? The good news for anyone that already has a Medigap Plan F or Plan C policy is that you can keep your plan and your coverage will be unaffected.
The phasing out of these two plans only affects the Medigap plan options of those newly eligible for Medicare after 2019.
An important distinction to understand about the availability of these plans moving forward is that your Medicare eligibility date determines whether you can purchase either plan starting in 2020 and forward.
A common misconception is that if you have not purchased Plan C or Plan F before the start of 2020, you no longer have the option.
However, if you became eligible for Medicare before this time, you will still have the option to purchase these plans at any point moving forward.
This is even true if you delayed your Medicare Part B enrollment, or you enrolled in a different Medigap plan first. Both Medigap Plans C and F will be available options to you.
Which Medigap Plan Offers the Most Coverage in 2020?
Now that the most comprehensive Medigap plan, Plan F, is no longer available to those newly eligible to Medicare, which plan option will offer you the most coverage?
There are a few sound options available to beneficiaries moving forward (including the option of Medicare Advantage plans).
The Medigap plan that is likely to take Plan F’s spot as the most popular choice in 2020 and moving forward is Medigap Plan G.
Medigap Plan G
Similar to Plan F in many ways, Plan G is likely to become an attractive option to many with Plan F no longer available to new enrollees.
Plan G offers the same comprehensive coverage of Plan F, though without the Part B deductible coverage.
Without this Part B deductible coverage, Plan G typically comes with a lower monthly premium.
For this reason, Plan G can be a better financial option than Plan F for some if you find that the lower monthly premium costs offset the cost of the Part B deductible.
With Plan G, once you meet the Part B deductible ($198 for 2020), all of your out-of-pocket costs for Medicare-approved services are covered.
Up Next: What is Medigap?