Historically, the Medicare Supplement Plan F has been the most common Medigap plan. In recent studies, Plan F makes up approximately 40% of the market among all Medigap plans. Many seniors choose Plan F because it has “first dollar” coverage, meaning that it pays everything that Medicare does not pay at the doctor and hospital leaving you with no co-pays, deductibles or coinsurance. Unfortunately, it is this feature that now has put Plan F on the road to change. So, is Medigap Plan F doomed?
The short answer is “Yep”, barring some new legislation between now and the year 2020. In April of 2015 the “Medicare Access and CHIP Reauthorization Act” was passed into law. This legislation was touted by the media that it fixed the doctor reimbursement rates for years to come. Overlooked is that the legislation also scheduled the end to the “first dollar” coverage plans – Medigap Plan C and Medigap Plan F, to be effective January 2020.
In past instances where the Medicare Supplement plans have been re-structured, existing policyholders were “Grandfathered in”, they were allowed to keep their plans. However, rates on the eliminated plans have always been more likely to rise rapidly due to the aging population on the plan, (because of no new enrollees). That means it is very likely this will happen with Medigap Plan F as well. So, you should be able to keep your plan. However, it may not be advisable to do so, as the rates will likely go up significantly over time.
So, what should you do if you have Plan F now? Our recommendation has been away from Plan F for the past year due to this legislation and the greater overall rate stability on other plans. Specifically, if you have Medigap Plan F now, we would recommend looking at a Medigap Plan G or a Medigap Plan N as an alternative.
Keep in mind that you may have to go through underwriting, ‘qualifying medically’ when you change from one Medicare Supplement plan to another. This could be a problem if you have health issues. Fortunately, there are no restrictions on what time of year you can make this type of change.
Plan G is set to be the big winner from this situation. It has been growing considerably for the last several years. Plan G has been a better “deal” than Plan F for a while. The only difference between Plan G and Plan F is the coverage of the Medicare Part B deductible, which is $166 a year for 2016. All the other benefits are identical except maybe for some extras. The amount you save on premiums for a Plan G are typically far greater than the deductible amount and, in most cases, are in the $300-400 a year range.
To learn more call Sonia Ashford at 817-689-3536.
Sonia Ashford is an independent insurance agent in the Medicare field, and has delivered hundreds of speeches about turning 65, Medicare Advantage and Medicare supplement insurance to consumers in Tarrant County. A respected agent within the Medicare insurance industry, she is the owner of Ashford Insurance Services. Visit Sonia's agency website http://ashfordinsuranceservices.com/ to learn more about how she can help you with your Medicare decisions.