There has been a lot of talk about not being able to purchase or keep existing Medicare supplement plans C or F in 2020. The truth is if you already have a Plan C or F, you can keep it, and if you turned 65 before January 1, 2020, you can still purchase a new plan C or F.
The new law prevents people aging into Medicare after January 1, 2020, from purchasing plan C or F. The reasoning behind the action was to eliminate supplemental coverage that provides first-dollar coverage. Plans C and F both pay the deductible and the co-insurance for Medicare. Studies have shown that some patients tend to over-utilize their benefits when they don’t have to pay a co-pay.
Changes to Underwriting Requirements for Medicare Supplement Plans
Guaranteed issue is legal right for people who lose their qualifying coverage, not to have to answer health questions for certain Medigap plans. The new law also changes the plans eligible for guaranteed issue. A person who would not qualify for a Medicare supplement due to poor health would be eligible for a guaranteed issue if they were losing other qualified coverage. For instance, prior to 2020, a person who was losing their group insurance could apply for a plan F within 63 days of losing coverage without answering health questions. After January 1, 2020, plan F would not be eligible for guaranteed issue. The new plans eligible for a guaranteed issue will be plans D & G.
So how do these changes affect your decision when choosing a plan? It’s a fact that guaranteed issue plans have more frequent premium increases. That’s because all people in a plan are affected by the claims of everyone in the plan.
Typically, people who apply for a Medicare supplement policy must go through medical underwriting. This process is meant to keep premiums stable by allowing the insurance company to select healthy people into the plan. Medical underwriting benefits everyone in the plan because it helps keep premiums lower. However, when a Medicare beneficiary loses their company-sponsored plan or a Medicare Advantage plan; these Medicare beneficiaries are eligible for a guaranteed issue. The applicant does not have to answer any health questions. The result can be higher claims payments and therefore, higher premiums for everyone in the plan.
So why should you care about which plan is eligible for guaranteed issue? If you are able to pass the medical underwriting, you should probably pick a plan that is not eligible for GI like plan F. You may have lower premium increases.
So what is the best plan for 2020 and beyond? If you turned 65 before January 1, 2020, plan F is probably your best option due to the fact that everyone who applies for the plan must be Medically underwritten. Premiums projected for 2020 are looking very good for Plan F. And remember, with plan F, you would have zero out of pocket for Medicare approved services and you can use any doctor or hospital that accepts Medicare. And all your claims are automatically filed which really takes a lot of stress off you.
If you turn 65 after January 1, 2020, you would consider plans G and N. Plan G pays all Medicare-approved expenses except the Medicare Part B deductible. Plan N is similar to Plan G, but also requires a co-pay for outpatient visits.
High Deductible Plan F
Although plans F, G & N are the most popular plans, there are others that some people have found to be the right fit. The high deductible plan F has a low premium and establishes a relatively low out of pocket limit at $2300. You just pay your 20% and deductible to Medicare until your out of pocket reaches the $2300 threshold. If it does, HDF pays 100% for the rest of the year.
All three of these plans file your claims automatically which eliminates the hassle of dealing with bills. And all three plans are universally accepted by any doctor or hospital that accepts Medicare patients.
The chart above gives an overview of the new plans.
If you need assistance in making a decision for your Medicare Supplement plans, we provide free quotes and assistance with selecting a plan.