Medicare Supplement Plan F is one of the most popular supplement plans on the market—and has been for decades. Seniors looking to avoid out-of-pocket costs, including the Part B deductible and excess charges often turn to Plan F for benefits on day one. But if Plan F is so popular, why is it being phased out in 2020? Here’s some background information on what’s going on with Medigap and what you should know to make an informed decision.
Phasing Out Plan F
Congress knew they could find some of this money by ending all Medigap plans that provided coverage for deductibles. Beneficiaries of Original Medicare (Part A and Part B) pay a deductible ($198 in 2020) before any services can be received, why shouldn’t Medigap require the same?
Beginning Jan. 1, 2020, all newly eligible Medicare beneficiaries will not be able to buy a Medigap plan that covers the Medicare Part B deductible (currently, only Plan F and C). However, people who already have these plans will be exempted. Medigap offers many different plans, but only Plan F and C cover the entire Part B deductible. Beginning in 2020, new enrollees will not be able to get this coverage, and Plan F and C will be phased out.
Ending the Doctor-Medicare Dispute—Changing the Law
Doctors who provide Medicare services expect to be compensated accordingly. However, Medicare legislation included budget cuts that negatively impacted doctors—and they weren’t happy. While the cuts were stalled for years, the debate reached a tipping point when many doctors suggested they might stop providing services altogether.
In response, Congress passed the Medicare Access and CHIP Re-authorization Act of 2015 (MACRA)—a fancy name for a law that changed the way Medicare doctors are reimbursed. While lawmakers thought they created a solution, they actually created a new problem: where would they get the funds to make up for the loss?
But, We Love Plan F
Medigap Plan F has always been popular with seniors because it offers coverage from day one without any out-of-pocket costs (also known as first dollar coverage). In other words, Medicare pays 80 percent of covered services and Plan F pays the remaining 20 percent and the Part B deductible. Seniors know that with Medigap Plan F, they can get the services they need immediately without having to pay a copayment or a deductible.
Anytime Medicare makes changes, it can be complicated. But, there is some good news: if you already have Medigap Plan F, you will not lose your coverage in 2020. In fact, you will be “grandfathered”, and can keep your plan for as long as you like. The phase out is directed at new enrollees only. Of course, other Medigap plans will still be available even after Plan F and Plan C are no longer available. Plan G and N offer similar benefits. And, Medicare will be creating a new high deductible Plan G for new and current enrollees.
If you are already enrolled in Plan F, in 2020
- You will not be kicked off your plan.
- You can still buy coverage from another provider.
If you are not enrolled in Plan F, in 2020
- You will not be able to join as a new enrollee
If you are eligible for Medicare before 2020, but delay enrollment because of employer coverage
- You can join Plan F when you retire or when you lose employee provided coverage.