Anthony Selm – Licensed Broker
Is Medicare Supplement Plan F going away?
Yes, it is – but not for a while yet, so don’t panic. Medigap Plan F has been one of the most popular supplement plans on the market for decades. Millions of people will be affected, so Congress has given us plenty of time to prepare for this – until 2020, in fact.
We’ve got the scoop so you’ll know what to expect in 2020, when these changes come about.
Why Are They Changing Plan F?
The changes coming are a result of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. You may have heard it referred to as the “doc fix” law.
The Doc Fix was necessary Congress passed this legislation last year to ensure that doctors would be paid adequately for providing Medicare services. We all want our doctors to be paid fairly for seeing Medicare patients, but some earlier laws actually budgeted for doctors to have rate decreases over the years.
Doctors, of course, don’t like this, and many threatened to leave the Medicare program if the cuts continued. Every year, Congress has been voting at the last minute to stall the cuts, but kicking the can down the road doesn’t work forever.
They needed a solution to fix the payments for physicians so that they would not bail out of the Medicare program.As you can imagine, that costs money, around $200 billion over the next 10 years. Congress had to come up with that money somewhere. They decided to reform our existing Medigap policies, among other measures.
All Medicare Beneficiaries Must Be Subject to a Deductible
Currently Medicare Parts A & B both have deductibles. Deductibles are the amount of money that you pay out of pocket before your benefits begin.
Medigap plans can still cover the Part A Hospital deductible, but as of 2020, the plans can no longer cover the Part B deductible for new enrollees. Currently this deductible is $183 per year as of 2017. Since Medicare Supplement Plan F covers that deductible, it is going to be phased out for new enrollees.
The goal of this measure is to make Medicare beneficiaries put a little more “skin in the game.”
You see, people with Medicare Supplement Plan F have what we call “first dollar” coverage. Right from the first day, Medicare covers 80% and their Medicare Supplement Plan F covers the deductibles and the other 20%. So people currently on Plan F pay absolutely nothing for their Medicare-related doctor visits. No deductibles. No copays at the doctor. Lawmakers fear that this lack of cost-sharing results in people running to the doctor for minor issues that may not really require medical care.
These changes mean that all Medicare beneficiaries will have least $183 in deductible spending out of your own pocket each year. In light of this, they hope you might think twice before seeing a doctor and perhaps causing the Medicare Trust Fund some unnecessary spending.
Basically…. they want you to think about whether you really need to see a doctor for every little sniffle.
Will this really work to reduce Medicare’s overall annual expenditures? We’ll see. Opponents have argued that people may end up waiting to seek medical care for serious issues. This would ultimately cost the Medicare program more money down the road. The end result is something we’ll all be discovering together after 2020.
The 2020 Changes
So is Plan F going away? Yes, BUT only for people new to Medicare starting in 2020. Here’s how it will go:
If you are are on Medicare Supplement Plan F already when 2020 rolls around, you won’t be kicked off your coverage. In fact, you will continue to be able to purchase Plan F policies from other carriers after 2020 as well. (Again, the MACRA act only prohibits the sale of Medigap Plans C & F to newly eligible Medicare beneficiaries.
If you are eligible for Medicare before 2020 but have delayed it because you are still working and have employer insurance, don’t worry. When you leave that company insurance and switch to Medicare, you will still have the right to enroll in Medicare Supplement Plans C or F.
People eligible for Medicare AFTER 2020 will not have this same right, but they will have a similar right to enroll in Medicare Supplement Plan D or Medicare Supplement Plan G going forward.
Other popular Medicare Supplement plans like Plan G and Plan N will continue to be available for everyone in their current format. A New High-Deductible Plan G will be created and made available for both newly eligible and previously eligible applicants.
Call us today at 866-572-9255 and one of our licensed brokers can help find out whether or not Plan F is still the best plan for you.