Coming Changes to Medigap Plans

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Changes to Medigap as part of the Medicare Access and CHIP Reauthorization Act go into action beginning next year.

Medicare is bringing big changes in 2020. The forecast of first-dollar coverage plans is that as less beneficiaries are eligible to enroll, other Medicare Supplement Insurance plans, known as Medigap, will become more popular.

Providers can easily explain how Plan F works because the beneficiary really has no out of pocket expenses with that first dollar coverage policy. When a patient has a policy with a coinsurance, explaining a service costs a percentage is more difficult.

Patients want to know the cost of procedures prior to receiving them; as a doctor, knowing how the insurance company pays makes it easier for you to understand patient responsibility.

Expect to see a rise of enrollees in the Medicare Supplement High-Deductible Plan G (HDG), which should officially be available for purchase on the Medicare market in January.

Patients that need to pay higher costs out of pocket could be more likely to skip doctors’ appointments due to inability to cover their portion of the bill.

Changes to Medigap as part of the Medicare Access and CHIP Reauthorization Act (MACRA) go into action beginning next year. The new federal law is pushing state insurance regulators to set a deductible requirement for Medigap plans before January 2020.

Since MACRA prohibits insurance companies from selling any Medigap plan that includes coverage for the Part B deductible, plans F and C won’t be available for anyone who is eligible for Medicare after January 1, 2020.

In fact, one proposal is that any state failing to adopt the new requirements may forfeit their rights to regulate Medigap coverage all together.

However, if a beneficiary is eligible for Medicare prior to 2020, they can enroll in retiring plans. Current enrollees can continue with coverage in these retiring plans, although their premium costs may increase.

Forecast of First-Dollar Coverage Plans


Under MACRA, first dollar coverage plans must be eliminated. This means Medigap plans D and G replace plans F and C. The coverage is almost identical with one difference: plans D and G require beneficiaries to pay the Medicare Part B deductible. Carriers that sell plans that include coverage for Part B deductibles can face a $25,000 fine and/or imprisonment for up to 5 years.

Currently, beneficiaries with Plan F can keep their coverage.

Congress wants patients to start paying out-of-pocket for some healthcare services with the hope that if they have some skin in the game, patients will not overuse healthcare resources. This is good news for doctors and healthcare providers.

As a result, the new law could impact the number of patients a doctor will see throughout each day. As providers see a decline in the number of unnecessary appointments, the quality of care they can provide will likely increase.

Some Medicare Agents are Confused

Many Medicare agents are unclear of the new changes. Some Medicare agents are under the impression that plans C and F are completely unavailable after December 31, 2019, and they’re telling policy holders to purchase a new plan so as to not lose Medicare supplement coverage. This is false, misleading and unnecessary.

The new federal law states that carriers that sell Medigap policies other than Plan A must also sell plans C and F to eligible members. Any agent found convincing policy holders to switch plans by using marketing and sales techniques, are in violation of Medicare’s Supplement Insurance laws.

In addition, this violates a states’ unfair trade practice laws. As a result, states may take appropriate administrative action if a state finds this activity.

First-Dollar Coverage Plans in Waiver States

Policies in Massachusetts, Minnesota, and Wisconsin will see the biggest changes as first-dollar plans go away for new enrollees. Before this new rule, these states were exempt from enforcing Medicare Supplement policies.

In 1990, Massachusetts, Minnesota, and Wisconsin had Supplement policies available to Medicare beneficiaries in their state. Since these states already developed standardized coverage options, the 3 states received waivers, exempting them from Supplement policy changes.

In turn, Massachusetts, Minnesota, and Wisconsin have different options than the rest of the country. However, that’s about to change.

Now, MACRA requires waiver states to comply with the new rules before the new year begins. Furthermore, states must adjust to the new changes and adopt the new federal law to avoid potential future issues.

Doctors should ensure staff members are aware of the new changes as billing processes will take some getting used to.

Say Goodbye to High-Deductible Plan F

The upcoming changes to plans C and F are the most common and Plan F can be sold with a high-deductible option. However, High-Deductible Plan F (HDF) is also going away for new enrollees in 2020. Instead, HDG will replace HDF.

HDG and HDF likely share the same deductible costs. Medicare Supplement HDF requires a $2300 deductible. While the Part B deductible is $185 a year, it’s part of the HDF deductible. On the other hand, HDG policies may not cover the Part B deductible cost; it’s likely the cost will apply toward the total deductible amount.

The new policy is just like HDF. We don’t have the benefit summary for this policy just yet, but we’re expecting deductible amounts to be met before coverage starts.

Offering identical coverage, HDF and HDG are equal in comparison. Although, new-to-Medicare beneficiaries must pay a Part B deductible for Plan G coverage.

Medigap Premium Rate Changes 2020

As of January 1, 2020, first-dollar coverage plans are going away for those eligible for Medicare. Plans F and C are known as first-dollar plans because once the premium is paid, there’s no out-of-pocket deductible cost before coverage begins.

HDF is also going away. Plan F is most popular because it’s the most comprehensive Supplement plan. Plan F includes all costs, (including Part B deductible costs) after Original Medicare pays its portion of the doctors’ medical bill of service.

Meanwhile, Plan C covers all expenses minus any excess charges. After the new year, premium amounts may increase for those who keep their current first-dollar plans.

Predictions are Not Final

Medicare is constantly changing. What we know from past discontinuation of plans helps us predict how changes impact both beneficiaries, and healthcare providers. When Plan J retired, we saw a rise in premium rates. The same is likely to happen as Medicare retires HDF and plans F and C. As rates increase, beneficiaries will likely switch to other Supplement Insurance plans. Over the next few years, providers can expect more patients enrolling in HDG and plans G and N over the next few years.

Doctors can’t tell patients which insurance to purchase, but they can inform their patients about how the insurance covers a service or procedure. The doctor that explains coverage properly and clearly to a client will make the patient feel more at ease.

If you have a lower income patient with true concerns, tell them about the Medicare Savings Program or the Extra Help for prescriptions. Patients shouldn’t go without insurance coverage, and doctors play an important role in ensuring patient care is optimized.