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Say Goodbye to Medicare Plans C and F

Written by Brian Gruss

Medicare Plans C and F are going away. But, before you say goodbye to Medicare Plans C and F, let’s talk about the facts. Medicare Plan F is going away, but don’t panic because it’s not an immediate change.  Since Medigap Plan F is one of the most popular supplement plans in the Medicare market and has been for many, many years. As millions of American seniors will be impacted, the US Government has given us until 2020 to prepare and make adjustments.

These changes are just one of the reasons having a knowledgeable, independent agent to help you figure out the impacts these large changes have on you personally. Let us dig into the details, break it down and clear up some of your questions.

The WHEN of the End of Medigap Plan F

Medicare Plan F will end in 2020. However, some people who are already on Medicare Plan F may be able to keep their plan.  This may make you want to quickly buy a Plan F, however please keep reading. Plan F rates may be affected significantly from the long term view. Let’s break it down and learn about why all these changes are taking place.

The WHY of the End of Medicare Plans C and F

Occasionally Congress decides to make changes to the Medicare supplement plans. These decisions can change what the market looks like and cause confusion. Congress first instituted standardized plan options in 1990. In 2010 Congress eliminated several plan options such as E, H, I and J. And that brings us to current events. Congress will be eliminating Plan C and Plan F for good.

As a result of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 the Medicare Plans C and F are eliminated.  This has been commonly referred to as the “doc fix” law. This law was introduced and passed to help ensure that doctors would be paid fairly for providing services for Medicare patients. We, of course, want doctors to be paid fairly, but some previous laws would actually have enacted a decrease of payment amounts for doctors over the next few years.  Obviously, reducing the payments to doctors was not popular among the medical community. Many doctors threatened to leave the Medicare program if the planned cuts continued. Each year, as the deadlines approached Congress would vote at the last minute to postpone the cuts. However, constantly delaying and slapping a Bandaid on a problem is not a workable long term solution.

Congress needed a permanent solution to stop the doctors from jumping ship! Of course, doing that costs money. A lot of money. Over $200 billion over the course of 10 years. Re formatting the existing Medigap policies, one area that Congress is coming up with the money needed to fill in that cost. There are other ways and areas that Congress is coming up with the $200 billion as well. We will touch on that in a bit.

The HOW of Medicare Plan C and F Changes.

As it stands now, Medicare Parts A & B both have deductibles. The definition of deductible is the amount of money that you pay out of pocket before your benefits begin. In 2020, Medigap plans can no longer pay the Part B deductible for new enrollees. This deductible amount is $183 each year in 2017. Part A Hospital deductible will still be allowed to be covered.  Plans C and F both include covering the Medicare Part B Deductible and that is why these plans are being replaced.

Congress seems to want to make sure that Medicare beneficiaries have more money on the line and are more responsible with their healthcare choices. Since Medicare Plans C and F are “First Dollar” coverage that means that people on these plans pay no deductible and no copays for their Medicare related doctors visits. Congress felt that since Medicare Plan C and F pays all of these costs up front that people go to the doctor for problems and medical issues that might not be medically necessary.  With these changes, all Medicare beneficiaries will have the minimum deductible ($183 in 2017) and will cause you to think about whether you actually need to see a doctor for your issue. The inherent hope, is that you may not go to the doctor as much and reduce the amount of spending from the Medicare Trust Fund.

Whether this strategy will be an effective way to save money and reduce the overall expense of Medicare is still to be proven. People challenging this line of thought have raised the point that people may put off seeing a doctor and something minor may develop into a more serious and more costly issue. If this turns out to be accurate it could cost the Medicare program much more money in the long term. No one will know the real effects of this legislation until after its implementation in 2020.

Here is the bottom line:

Plan F and Plan C is going away. However, only for new Medicare enrollees starting in 2020.

If you are already on a Plan C or Plan F when 2020 arrives, you will be able to continue your plan coverage. You also will be able to purchase Plan C and Plan F from other carriers. The MACRA Act only applies to the sale of these plans to NEWLY ELIGIBLE Medicare enrollees.

Also, if you are eligible for Medicare before 2020, but have delayed enrolling because you have alternative coverage through an employer, you will still be eligible to enroll in either a Plan C or a Plan F.

Medicare Plan G and Plan N will stay the same and be available with no new restrictions. A new high deductible option for Plan G will be created for both new and existing applicants.

The EFFECT of Medicare Plan C and Plan F Changes

Seniors are concerned about quick rate increases with their Plan F or Plan C options. It is hard to know whether there will be a significant impact or not. In 2010 there was a bit of price inflation on the discontinued Medicare Plan H, Plan I and Plan J. However, that inflation was variable and not consistent between companies or states.

Our advice for you is that you should make your decisions based on what is right for you, this year. If you feel that a Plan C or Plan F is right for you, do it. Then you will be grandfathered into that plan past 2020. If you , that a Plan G or Plan N is a better fit for your financial and medical situation, there are great advantages to those plans too. 2020 is still a ways away and there is the possibility of more changes or updates to these policies. We promise to help you navigate this to the best of our ability.

Please contact us if we can answer any questions about these developments or if you would like to learn more.

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About Just Medigap

We work with individuals across the nation to secure the best Medigap rates.  Please don’t hesitate to call us at 352-508-4221 or fill in your information in the form to the left.

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