Changes To Medicare Supplement Plans Begin In 2020

Question: Is it true and important that Medigap plans are not available?

Answer: Over the last year or so, we often talk about upcoming changes to the Medicare Supplement plans. Those changes are scheduled to happen January of 2020.

Medicare Supplements (Medigap) are plans that can be purchased to work with Original Medicare to help pay for your medical expenses. These Supplements are highly regulated plans that are available in a variety of levels of coverage. Medigap insurance policies would be secondary to Medicare A & B. Medigap is literally designed to “fill the gaps” left by Medicare. The Plans were regulated many years ago into lettered plans. This was done to protect consumers and allow you to compare plans in a comprehensive way. Letters of the alphabet delineate the levels of coverage. Currently there are eleven levels of coverage available (A, B, C, D, F, HDF, G, K, L, M, & N). These plans have not changed since June of 2010. At that time a number of ‘letters’ went away (E, H, I, J) and K, L, M & N were added.

The following is a link to the Medicare webpage illustrating Medicare Supplement policies that are available — medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies.

Each letter delineates a different level of coverage after Original Medicare has paid its portion of the bill. These Medigap plans work with Medicare to cover and pay for your Medical care. When you are comparing the plans, you decide on the level of coverage you wish to have (letter), and the company you choose should be influenced by the price of the premiums.

When discussing this process, I often use the example of Campbell’s soup. You know when you look to buy Campbell’s soup, whether it is Tomato, Chicken Noodle, Minestrone or Cream of Celery, the soup inside the can is the same no matter what store you are in. The price you pay for each of these soups is very different based on the store you buy it. So once you decide on Chicken Noodle, you can decide on which store to buy it. Some use price as the one of the main deciding factors. Of course with Soup it can also be convenience.

With Medigap plans, the coverage is exactly the same between companies for each letter. So once you decide which plan you want, a Plan F or Plan N or a Plan G, you should consider cost as one of the main factors for comparisons.

Currently the most comprehensive plans are Plan C & F. With Plans C & F, Original Medicare is primary and the remainder of the medical bill is covered and paid for by the Medigap Plan C or F whichever you choose. For this reason these two plans tend to be very popular.

Beginning in January of 2020 anyone who is new to Medicare will be unable to purchase a Medicare Supplement Plan F or C at all. Now that sentence seems pretty clear, but let me clarify further. This change only impacts those individual who age into Medicare after Jan. 20, 2020, (turn 65 after Jan 2020, are born after Jan. 1, 1955), or become eligible for Medicare due to a disability after Jan. 1 2020.

If you have turned 65 or have Medicare due to a disability prior to Jan. 1 2020 even if you have not signed up for Medicare Part A or B you could still purchase a Medicare Supplement Plan F or C.

This is a significant clarification. Right now there are a lot of individuals in our region who have Medicare already and are thinking they must purchase a Medicare Supplement Plan F or C now before they go away to be grandfathered into the possibility of having one later. We have now learned they are already grandfathered into that possibility. They have Medicare now, therefore as long as there is a company selling Medicare Supplement Plan F or C, they can purchase it. Even for those individuals who are 65 and have decided not to begin Medicare (because they are working and have insurance) they will still be allowed the opportunity to purchase a Medicare Supplement Plan F or C, if there are companies offering Medigap Plan F or C.

The rule does NOT eliminate the Medigap Plans C & F for those individuals who already have those plans. It is important to remember that Medicare Supplement Plans (Medigap Plans) are always renewable. That means once you purchase a Medigap policy you can keep that policy for life as long as you continue to pay the premiums.

This new rule change applies to those that become eligible for Medicare after Jan. 1, 2020.

After January of 2020, those individuals who age into Medicare will have Medicare Supplement Plans available to them, just not Plan F or Plan C. They could purchase Plan A, B, D, G, K, L, M & N. The closest plan available to Plan F is Plan G, the only difference being the Part B deductible is not covered by Plan G, which means you pay the Part B deductible (which in 2019 is $185). The closest plan to Plan C is Plan D, the only difference being the Part B deductible is not covered by plan D (which in 2019 is $185). You could also review the other plans available and you might find one of the other letters a better fit for what you need.

This new rule change is important, but not as terrible as we thought it was going to be. Remember that each state has different rules regarding enrollment and renewal for Medicare Supplements. In New York State Medicare Supplement (Medigap) Plans always have open enrollment. You can change the letter of the Medigap plan you have and the company you have every single month. I certainly do not recommend changing your insurance that often, but you are allowed to do that if you want. Many individuals enroll in a Medigap plan that is less expensive and has higher co-pays when they are younger, and then when they have serious medical problems will switch to a more comprehensive plan. You can keep the plan you have now and maybe change to a different plan later in your life based on the plans available at that time.

To your question, “Are Medigap plans going away?” The answer is yes & no. Plan C & F are going way for those that are new to Medicare, but that is not devastating. To your question, “Is that important?” It is different, but not as significant as we had originally thought. If you are eligible for Medicare now or between now and Dec. 31, you will probably be able to purchase a Medigap Plan C or F. I say probably because you may find that one of the other plans is a better fit for you anyway. If you already have Medigap Plan C or F, you can always keep that plan. I also would not suggest that individuals with Medicare hurry to get into a Medigap Plan C or F before they go away. Currently Plan G is being heavily advertised by many insurance companies and is priced competitively. We will see more of that as December gets closer.

You also can review this decision in the Fall Open Enrollment Period, Oct. 15 to Dec. 7, when you look at your Prescription Drug Coverage (Part D). That may be the best time to look at your overall situation and decide what makes the most sense for you at that time.

To contact Janell Sluga, GCMC with questions or concerns, please call 720-9797 or e-mail her at janells@lutheran-jamestown.org.

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