Note: I thank Ron Iverson, president of NAMSMAP* for assembling this data. This information comes from the National Association of Insurance Commissioners. *National Association of Medicare Supplement and Medicare Advantage Producers. This article is a revision from one published earlier this year.
A Brief Summary
Plans C and F will not be available for people turning 65 after January 1, 2020. People on Medicare prior to that date can still purchase Plans C and F, subject to medical qualification in most cases. If you’re not a detail person, you can to stop here. For the mavens that enjoy knowing the full details, keep reading.
Now the Details and the Long Version
1) Why is the standard model for Medicare supplement (Medigap) plans being revised?
A new federal law was passed on April 16, 2015. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) makes changes to Medigap policies that cover the Part B deductibles for “newly eligible” Medicare Beneficiaries on or after January 1, 2020.
2) What does MACRA require?
As of January 1, 2020, MACRA does the following:
2a) Prohibits first dollar Part B coverage on Medicare Supplement plans (Plans C and F) to “newly eligible” Medicare Beneficiaries, so Plans C and F cannot be sold to those “newly eligible” for Medicare. Those enrolled in Plans C and F prior to January 1, 2020 may keep their plan.
2b) Makes Plans D and G the guarantee issue plans for “newly eligible” Medicare Beneficiaries for the specified periods under current law that name C or F for current Medicare beneficiaries.
2c) Who is considered a “newly eligible” Medicare beneficiary under MACRA?
MACRA defines “newly eligible” as anyone who: (a) attains age 65 on or after January 1, 2020, or (b) who first becomes eligible for Medicare benefits due to age, disability or end-stage renal disease on or after January 1, 2020.
3) How much is the Medicare Part B deductible?
Medicare Part B deductible is $185 in 2019.
4) How does this relate to efforts to eliminate Medigap or Medicare supplement “first dollar coverage”?
This accomplishes the efforts to eliminate Medigap “first dollar coverage” (coverage of all claims without paying any out of pocket cost) by discontinuing sale of Plan C and Plan F only for “newly eligible” Medicare Beneficiaries
5) How are people eligible for Medicare on the basis of disability impacted by these changes?
Current beneficiaries are not impacted. The restrictions under MACRA apply to persons who qualify for Medicare as a result of a disability on or after January 1, 2020.
6) Why are plans “re-designated” for only “newly eligible” Medicare beneficiaries?
The Federal Government wanted to eliminate coverage for the Part B deductible making consumers responsible for that first dollar coverage. The only difference between Plans C and F and Plans D and G is the coverage of the Part B deductible under Plans C and F. All other benefits are exactly the same for D and G. Since Plans C and F will no longer be available for “newly eligible” beneficiaries, it was necessary to designate Plans C and F as Plans D and G for these individuals.
7) How are enrollees in current Plans C and F affected by these changes?
Current enrollees (those eligible for Medicare PRIOR to January 1, 2020) can continue with their Plan C or Plan F, including F High Deductible plan, and may continue to buy Plans C and F beyond January 1, 2020. Current enrollees will also be able to buy the new Plan G High Deductible plan on or after January 1, 2020.
8) What changes are made to High Deductible Plan options?
Since Plan F High Deductible cannot be sold to those “newly eligible” Medicare beneficiaries, a new Plan G High Deductible is created for those “newly eligible” Medicare beneficiaries as of January 1, 2020. The effective date of coverage for Plan G High Deductible must be on or after January 1, 2020. If you are not a “newly eligible” beneficiary and are enrolled in a Plan F High Deductible prior to January 1, 2020, you are able to continue this coverage beyond January 1, 2020 and to purchase this coverage on or after January 1, 2020.
9) When can the new High Deductible Plan G be sold and who can buy it?
Plan G High Deductible can be made available beginning on January 1, 2020; “newly eligible” Medicare beneficiaries and current beneficiaries would be able to buy the new Plan G High Deductible.
10) For high deductible plans, does payment of the Part B deductible count towards the plan deductible?
For Plan G High Deductible; while the Part B deductible is not covered (reimbursed), it does count towards the High Deductible plan’s deductible. If, in the rare circumstance the Plan G’s High Deductible is met with all Part A expenses and Part B Deductible expenses are then incurred, these expenses will not be covered expenses until the beneficiary meets the Medicare Part B deductible.
11) For the new High Deductible Plan G sold on or after January 1, 2020, what happens if a policyholder meets the high deductible amount with all Part A out of pocket expenses?
If, in the rare circumstance the Plan G’s High Deductible is met with all Part A expenses any Part B Deductible expenses incurred will not count towards meeting the High Deductible nor will they be covered expenses.
12) What changes are made to Guaranteed Issue requirements?
Since two of the current guaranteed issue plans, Plans C and F, will no longer be available for “newly eligible” Medicare Beneficiaries on or after January 1, 2020, Plans D and G will become two of the guaranteed issue plans for these individuals. Current enrollees can remain with or buy Plans C and F and individuals who do not fall within the definition of “newly eligible” Medicare beneficiary will still be able to purchase Plans C and F.
13) How does this change the way Plans C or F, and D or G, may be sold in the state?
Insurers can continue to sell Plans C or F to current Medicare beneficiaries. However, “newly eligible” Medicare beneficiaries cannot apply for or purchase Plan C or F. The “newly eligible” would be offered Plans D or G on a guaranteed issue basis instead. All other currently available plans may continue to be offered to all Medicare beneficiaries regardless of their date of eligibility for Medicare.
You are NOT considered “newly eligible” because you turned age 65 before January 1, 2020; and although you must enroll in Part B to purchase Medigap and that would occur after January 1, 2020, you could purchase C or F because you turned age 65 before January 1, 2020.
1) Plans C and F, and High Deductible F, will not be available to anyone who turns 65 (“newly eligible”) after January 1, 2020, including those eligible for Medicare by reason of disability.
2) People currently with Plans C and F and High Deductible F will be able to keep them after the date.
3) People who turn 65 and register for Medicare before the date, can still purchase Plans C and F because they are not considered “newly eligible.”
4) And…even though a person who purchases Part B after January 1, 2020, they can still purchase Plans C or F because he/she turned 65 before the date.
5) The current Plan C will become (be designated) the current Plan D after the date.
6) The current Plan F will become (be designated) the Current Plan G after the date.
7) All High Deductible Plan Fs will be available as they currently are after the date, and will become (be designated) High Deductible Plan G. Available purchase will include people who turn 65 before the date, but again, not those “newly eligible.”
8) Guaranteed Issue (GI) Plans C and F will not be allowed to be sold to newly eligible, but GI plans D and G will.
9) Plans K and L will remain the same, with the exception of the yearly raise of out-of-pocket expense.
10) Plans M and N will not change.
11) The rules also apply to “Medicare Select” plans.