Changes for new Medicare beneficiaries January 2020 is on the horizon. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is new legislation that will make changes to Medigap policies for “newly eligible” Medicare Beneficiaries starting January 2020. As part of the MACRA, Congress is eliminating Plan F and Plan C, which cover the Part B deductible.
Here is more information on which plans are being eliminated and who is affected by this change so you can help your Medicare Beneficiaries.
What are Plan F and Plan C?
Both plans are Medigap plans that provide first dollar coverage after Medicare. Plan F is the more popular plan, giving policyholders 100% coverage by covering their Part A and Part B Deductibles as well as the 20% coinsurance. Plan C is similar, except it doesn’t pay Medicare excess charges.
Why will MACRA eliminate these?
Legislators who argued and voted in favor of eliminating Plan F and Plan C thought that people with Plan F or Plan C would visit their healthcare providers more often than someone who must pay their own deductible. They worried it would lead to more unnecessary Medical visits for minor ailments that having a copay would reduce this problem.
Who is affected by these changes?
Plan F and Plan C will not be eliminated for everyone. MACRA has designated that only “newly eligible” on or after January 1, 2020 will not be allowed to enroll in either plan. Anyone who becomes eligible before January 2020 can still enroll and keep these plans. Anyone who turns 65 before January 1, 2020 can still enroll in a new Plan F and Plan C, even after January 1, 2020, since the elimination is only for people turning 65 starting January 1, 2020.
Other plan options?
As always, you want to determine with your client the plan that best fits their needs. For a lot of clients who would normally opt for Plan F or Plan C, Medicare Plan G may be the best option. However, this can only be determined after meeting with the client and discussing their medical needs. Another change to remember is that Plan D and Plan G will become subject to Open Enrollment and Guarantee Issue, which was historically designated to Plan F. Keep this in mind for newly aging in customers, customers who are moving, or those who are losing their plan due to a plan exit. After January 1, 2020 their guarantee issue option will be Plan D or Plan G.