You may have seen this in print or heard it from a friend – we have gotten this question frequently in the last year… Is Medigap Plan F Ending? The short answer is “Yes”, but the details are a little more nuanced than that.
First and foremost, it is important to understand what Plan F is. Plan F is the most common and comprehensive Medigap plan. It pays everything that Medicare Parts A & B do not cover at the doctor and hospital. It also accounts for almost half of the current enrollees in Medigap plans.
In 2014, Congress passed legislation that included a prohibition against “first-dollar” Medigap coverage (i.e. Plan F). Now, this does not take effect until 2020. But as of 1/1/2020, plans that cover “everything” Medicare does not cover, including Plans F and C, will be eliminated to NEW enrollees.
So, what does that mean for someone turning 65 now – is Medigap Plan F ending for you? Actually, you can still sign up for Medigap Plan F now (and many people still are!). And, it is expected that you will be able to keep (“grandfathered in”) your Plan F after 1/1/2020.
While you may be able to sign up for it now and may be able to keep your Plan F after 1/1/2020, it may not be wise to do so. First, Plan F is not actually the best “deal” in most situations now – even before the announced end of the plan. Other plans like Plan G and Plan N, which require some cost-sharing, have proven to be both more cost-effective and rate-stable over time. Although those plans have some deductibles, co-pays and out of pocket costs, the premium savings (in most situations) more than offsets any out of pocket costs you would pay.
Also, when a Medigap plan ends to new customers, it becomes a “closed” block of business. This just means that everyone that has that plan is aging with no “turning 65” new customers to offset that. An aging customer base means more claims, and most likely, higher/more frequent rate increases. Because of this, being in a Plan F after 1/1/2020 is probably not a desirable place to be.
It is undetermined what will actually happen to the current Medigap coverage chart. Maybe there will be new plans added or additional plans eliminated? In past instances of plan changes, the Medigap coverage chart has been completely overhauled to reflect plan changes, new plans and eliminated plans. It’s likely that would occur again in 2020. However, those changes have not been finalized or announced.
In your research for turning 65, have you asked the question is Medigap Plan F ending? Many people, who are currently on Medicare with a Plan F, don’t even realize the plan is scheduled to end in a few years. But it is important, as it will likely have a great impact on rate stability moving forward. This knowledge allows you to make a more prudent decision on the best Medigap plan for you, which will be a wise long-term choice.
If you have specific questions about Plan F ending or want a list of the plans for your area, please contact us.