Original Medicare covers many different health services, but it does not always cover them 100%. This is where Medicare Supplement Plans, also called Medigap Policies, come in. These plans help reduce out-of-pocket expenses associated with Original Medicare. Relatively recent legislation has affected which policies insurance companies can offer. Learn more below.
How Medigap Plans Work
Medigap policies are policies offered by private insurance companies meant to cover out-of-pocket expenses that Medicare generates. For example, Medicare Part B covers many services, but it only covers about 80% of these costs. You are then responsible for the remaining 20%. A Medigap policy will help cover that cost.
While private insurance companies offer plans, they have to base them on 10 templates. These templates outline which costs they can cover and to what extent. Common costs covered by Medicare Supplement Plans include the Part A deductible, Part B deductible, Part A coinsurance, and hospital costs, Part B coinsurance or copayment, Part B excess charges, and healthcare costs while traveling internationally, to name a few.
What is MACRA?
MACRA stands for Medicare Access and CHIP Reauthorization Act of 2015. MACRA had multiple changes. It repealed the Sustainable Growth Rate formula, changed the way Medicare incentivizes physicians to improve the quality of healthcare patients receive and gave bonus payments for participation in eligible alternative payment models. In regard to Medigap Plans, MACRA changed 2 plan templates: C and F.
Effect of MACRA on Policies C and F
MACRA enacted changes with the aim to decrease unnecessary doctor visits. They incentivized this by discontinuing coverage for the Part B deductible. That means that the plans that covered the Part B deductible, Policies C and F, are no longer offered.
Policies C and F were two of the most comprehensive plans. Plan F covered every out-of-pocket expense that could be covered by a Medigap policy. Part C was the next comprehensive, covering everything except Part B excess charges. Due to MACRA, Plans C and F are no longer being offered to people newly eligible for Medicare after January 1, 2020. However, there are still other comprehensive policies available, like Plans G, and N.
While MACRA changed which Medigap policies are available to people newly eligible for Medicare in 2020 and onward, there are still plenty of options. If you have questions or need help navigating Medicare Supplement Plans, contact us today to speak with an agent.