There are some big changes coming to Medicare Supplement plans in 2020. Plans C, F and High Deductible F will no longer be available for new Medicare enrollees.
In other words, if you become eligible for Medicare on or after January 1, 2020, you won’t be able to enroll in Plans C, F or High Deductible Plan F. However, if you are already enrolled in one of these plans, you’ll be grandfathered into that coverage and can keep that plan in place indefinitely.
Plan F has been considered the “Cadillac” of the Medicare Supplement plan options. It has historically been the most purchased plan because it provides for the greatest amount of coverage. Plan F covers all of Medicare’s deductibles, copays and out-of-pocket expenses.
High Deductible Plan F has become a popular alternative to traditional Plan F over recent years. It typically has the lowest premium amongst the Medicare Supplement plan options. High Deductible Plan F requires Medicare beneficiaries to pay a $2,300 calendar year deductible before providing coverage for the outof-pocket expenses for which Medicare doesn’t cover. High Deductible Plan F typically costs about onethird of the premium of traditional Plan F.
Plan C is identical to Plan F with one exception. Plan C does not provide coverage for Medicare Part B excess charges. Some doctors charge up to 15% more than the Medicare allowable amount (i.e. an excess charge). Plan F covers excess charges whereas Plan C does not. Plan C is typically only a few dollars less expensive than Plan F, so most people go with Plan F when choosing amongst those two options.
Why are these plans going away?
In 2015, Congress passed a law known as the Medicare Access and CHIP Reauthorization Act. Amongst other things, the law called for the elimination of certain Medicare Supplement plans starting in 2020. Some members of Congress believe certain Medicare Supplement plan designs cause an overutilization of healthcare services, and so they passed a law to discontinue the sale of those plans.
What’s next for Medicare Supplement plans?
Plans G and N are likely to thrive in 2020 and beyond.
Plan G is very similar to Plan F, but it doesn’t cover the Part B deductible. The Part B deductible is only $185, and often the premium savings of Plan G versus Plan F exceeds this amount. Plan G is actually a better financial option for most people when comparing it to Plan F. There are also rumors that a High Deductible Plan G may become a new option in the future, but there’s no guarantee.
Plan N includes some cost sharing for members, but these are relatively nominal. There are $20 copays for office visits and $50 copays for emergency room visits. Most other out-of-pocket expenses are covered under Plan N.
And let’s not forget about Medicare Advantage plans. These will continue to be an alternative option to Medicare Supplement plans. Some of these plans even have a $0 premium and include Part D coverage.