Original Medicare offers its beneficiaries great benefits for a reasonable monthly premium. However, those benefits are maxed at 80% coverage, with no out-of-pocket limits for beneficiaries. Many individuals choose to purchase a Medicare supplement, also called a Medigap plan, to help cover the “gaps” of coverage in Original Medicare.
Occasionally there are changes to Medigap plans, but those changes are not seen often. One of the biggest changes recently impacts who was eligible for Medigap plan F.
This article will discuss what Medicare supplements are, what kind of plans are offered, and what kind of changes have occurred recently. Consider this the Medicare Breakdown as it pertains to Medigap Plan Availability.
What are Medicare Supplements?
Medicare supplements are sold by private insurance companies and regulated by the federal government. These plans are standardized, meaning that they are the same, no matter which carrier you purchase one from.
Medigap plans help pick up the expenses left behind by Original Medicare (Part A and Part B). Since Original Medicare only pays for 80% of covered expenses, Medigap plans were made to help cover the leftover 20% that comes from the Part A and B deductibles, coinsurance, and copayments.
There are currently ten Medigap plans on the market: A, B, C, D, F, G, K, L, M, and N. There are also high-deductible versions of Plans F and G. Each Plan offers varying levels of coverage and comes with its own premium and deductible requirements.
Up until recently, Plan F was considered the best Plan on the market. It offered the most comprehensive coverage, and often its members were left with nearly no out-of-pocket expenses.
Let’s review the coverage benefits of Plan F.
Medigap Plan F Coverage Details
This is the list of services that Plan F offers:
- Part A coinsurance and up to an additional 365 days of hospital costs after Medicare benefits are exhausted
- Part B coinsurance/copayment
- Blood (3 pints)
- Part A hospice coinsurance/copayment
- Skilled nursing facility care coinsurance
- Part A deductible
- Part B deductible
- Part B excess charge
- 80% of foreign travel exchange
- No out-of-pocket limit
You can see why Plan F is so appealing to Medicare beneficiaries. While the higher benefits also come with a higher premium, most individuals who were financially able to enroll in this Plan took advantage of it.
Now, not everyone can choose this Plan. What happened?
- You can see why Plan F is so appealing to Medicare beneficiaries.
Medicare Access and CHIP Reauthorization Act of 2015
The Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization (MACRA) made changes that went into effect on January 1, 2020.
The changes prohibit Medigap plans from paying the Part B deductible for newly eligible beneficiaries, meaning anyone who turned 65 on or after January 1, 2020. Plan F included payment for the Part B deductible, so this Plan became unavailable to those members. (The same rules apply to the high deductible version of Plan F.)
Any beneficiary who was already enrolled in Plan F can still continue their coverage. Anyone who delayed enrollment in Medicare Part B (and thereby a Medigap plan) but still turned 65 prior to January 2020 may also still enroll in Plan F, though it may not be wise to do so.
Because the pool of Plan F members will begin to decrease, the premiums will begin to drastically increase in the upcoming years. It may be affordable now, but it may quickly become too expensive for many individuals. And since members are not always able to change plans without medical underwriting, it is likely a better decision to choose a plan other than Plan F.
The Next Best Thing: Plan G
Medigap Plan G is nearly identical to Plan F, except that it does not pay for the Part B deductible.
Medigap Plan G covers:
- Part A coinsurance and up to an additional 365 days of hospital costs after Medicare benefits are exhausted
- Part B coinsurance/copayment
- Blood (3 pints)
- Part A hospice coinsurance/copayment
- Skilled nursing facility care coinsurance
- Part A deductible
- Part B excess charge
- 80% of foreign travel exchange
- No out-of-pocket limit
Like Plan F, there is also a high deductible version of Plan G. This is a great option for those who are looking for a lower premium and have the financial stability to pay a higher deductible.
Changing Medigap Policies
Those beneficiaries who are currently enrolled in Plan F may want to switch plans as the premium increases. Changing plans may or may not be an option based on the individual’s medical history and current health status.
Speak to your agent if you want to switch policies. They will help you fill out the new application. If it is approved and you are allowed to switch, you will then call your current Plan’s carrier and ask for your coverage to end. There may be additional steps needed depending on the carrier’s requirements.
While Plan F offered the best coverage we’ve seen in recent years, Plan G is still an excellent option for Medicare beneficiaries. Call your agent at The Medicare Gurus today if you are ready to enroll in a Medigap plan or if you would like to inquire about changing plans.
Check out our Medicare Forms and Documents.
