Medicare Recipients The Clock Is Ticking & Plan F Is Going Away?

March 23,2020  

Plan F will no longer be sold starting in 2020

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.

The new law ensures doctors will be adequately paid for Medicare services

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 in 2017. Since Plan F covers that deductible, it is going to be phased out for new enrollees.

The goal of this measure, in the view of Congress, is to make Medicare beneficiaries put a little more “skin in the game.”

You see, people with Plan F have what we call “first dollar” coverage. Right from the first day, Medicare covers 80% and their Medigap Plan F covers the deductibles and the other 20%. So at the time of service, people currently on Plan F pay no copay for their Medicare-related doctor visits. No deductible either.  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

Medigap Reform begins in 2020

So is Plan F going away? Yes, BUT only for new people starting in 2020. Here’s how it will go:

• If you are are on 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 eligibleMedicare 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 insurance and switch to Medicare, you will still have the right to enroll in Medigap 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 Medigap Plans D or G going forward.

Other popular Medigap 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.

What does this mean for you?

Here’s our advice:

1. Make the best coverage decision for yourself right now. If Plan F feels best to you, go for it. You’ll be grandfathered if you choose to keep that plan past 2020. If you would rather choose Plan G or Plan N that isn’t slated to be discontinued down the road, then that’s fine too. In fact, Plan G offers some great potential savings and gets great reviews.
2.  Watch our posts for future updates. Legislation about Medicare changes often and 2020 is still quite a long way away. We never know what other changes they may pile on between now and then. We’ll keep you posted though, so be sure to check in here at our website or l for future updates as we roll them out.
3. Visit us at www.deleonenterprisesinc.com to learn about these plans and other life insurance plans available in Houston and Surrounding areas. We’ll help you see just how much you would save. - Raymond De Leon