The alphabet soup of Medicare will lose a couple letters in the New Year, when two of the most popular Medicare supplement plans will be closed to new beneficiaries.
Medigap Plans F and C won’t be available to those who turn 65 on or after Jan. 1, 2020. Supplement plans are sold by private insurers to fill in the gaps of Original Medicare coverage, such as copayments and coinsurance (the percentage of the bill that you’re responsible for). Plans F and C are the only Medigap plans that cover the Part B deductible, so beneficiaries on them generally don’t incur any bills when they visit the doctor or access any of the other outpatient services that Part B covers.
But the government wants to give seniors more of a financial stake in their medical care. Starting next year, all Medigap plans available to new beneficiaries will require you to pay the annual Part B deductible, which will rise to $198 in 2020.
“They want you to think twice before a sniffle visit,” says Danielle Roberts, co-founder of Boomer Benefits, a licensed Medicare insurance broker.
Plans F and C aren’t being discontinued, though: if you’re currently enrolled in Plan F or Plan C, you can keep your plan. But you should pay attention to your premiums, Roberts cautions. Since these plans are closed to new customers, the pool of covered beneficiaries will only get older. Without an influx of younger customers in relatively good health — who pay the monthly premium but don’t access as much care as older customers — the plan’s costs will rise and insurers might have to increase premiums more than usual in response.
Beneficiaries who get a rate increase of 10% or more might want to explore other options, Roberts says. But never drop your existing plan until you’ve secured new coverage. Outside of certain circumstances, insurers can charge you more for Medigap or deny you coverage altogether because of your health status (serious conditions like cancer are often disqualifiers). You want to make sure you can get the coverage you want at the price you want before you drop what you have.
The second most comprehensive Medigap policy is Plan G, which is the same as Plans F and C except that it doesn’t cover the Part B deductible. Plan G will now feature a high-deductible option that takes the place of Plan F with a high deductible for new beneficiaries.