Is Medigap Plan F Going Away?
Originally published January 9, 2018
Updated March 13, 2019
On January 1, 2020, the Medicare Supplement Plan F will no longer be available to new Medicare enrollees.
This comes from Congress via the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) bill:
"Sec. 401) Amends SSAct title XVIII to deny Medigap policies that cover Part B deductibles to Medicare beneficiaries newly eligible on or after January 1, 2020."
That leaves a lot of us with questions:
- Why is Plan F going away?
- Can I still get a Plan F after 2020?
- What if I currently have a Plan F?
- What will replace Plan F?
- What will happen to the cost of a Plan F?
- What should I do?
We’ll be answering your questions in this article, but if you would like to speak to one of our Medicare specialists, just click the link below.
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Why Is Plan F Going Away?
If you have Plan F, or if you’ve heard about how great Plan F is, you’re probably wondering: why is Plan F going away?
The short answer is because the government said so.
The longer answer has to do with the dilemma of first-dollar coverage.
In other words, if you have a Plan F, you can go to the doctor without paying any co-pays, deductibles, or coinsurance. The government worries that since you can go to the doctor for free, you might go more than you need to.
If that were the case, it would mean that people who have a Plan F cost Medicare money that they’d rather not spend.
There are various debates going on about whether this is true. Many studies have shown that people who go to the doctor more often are more likely to find problems sooner, which costs less in the long run.
On the flip side, people who don’t go to the doctor as often are more likely to miss potential health conditions, which can end up costing more.
In the end, Plan F will not be available for newly eligible individuals starting in 2020.
Can I Still Get Plan F After 2020?
While newly eligible individuals can’t purchase Plan F starting in 2020, anyone who was eligible before that date can still purchase a Plan F.
This means that if you turn 65 before January 1, 2020, you’re able to purchase a Plan F. However, if you turn 65 after January 1, 2020, you cannot.
We did the math, and that’s still over 60 million seniors who will able to purchase a Plan F going forward.
What If I Currently Have a Plan F?
If you currently have a Plan F, you can keep your policy for as long as you like.
While Plan F is going away, the fact that there are over 60 million people who can still get it means that it’ll be a long and gradual phase-out.
Many individuals who currently have a Plan F are asking us if they should keep it or switch to a different plan.
This depends on the individual. We always do what’s best for each individual client, which means we’d need to learn more about what company you have and how much you pay each month. It could save you money to switch to a different Plan F company or even a different plan altogether.
We won’t know until you contact us for help. (Our help is free!)
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What Will Replace Plan F?
After January 1, 2020, the following Guaranteed Issue plans will be available for newly eligible Medicare beneficiaries:
- Plan D
- Plan G
- High-Deductible Plan G (This is a brand-new plan option)
Out of these three options, we would recommend a Plan G.
Guaranteed Issue situations occur when something happens to your existing insurance. Here are 2 common examples:
- You’re in a Medicare Advantage Plan, and you move out of the plan’s service area.
- Your employer’s group health plan is ending.
You can read more about Guaranteed Issue here.
What Will Happen to the Cost of a Plan F?
If you’re part of the group who will still be able to buy a Plan F after January 1, 2020 (those eligible for Medicare prior to January 1, 2020), you may be wondering if the F will be competitively priced.
There are 2 main schools of thought when it comes to the future of Plan F:
- There will be more rate increases due to fewer enrollees
- Plan F will become the plan of choice again with the most competitive rates
Before 2010, there was a plan called Plan J. It was pulled from the market, just like Plan F will be, and it had some of the highest rate increases.
That leaves a lot of experts thinking that Plan F will follow that same pattern. However, Plan J was shut down completely, whereas over 60 million people will still be eligible for a Plan F. That’s a lot of people, which makes Plan F very unique.
Starting in 2020, Plan F will no longer be a Guaranteed Issue product, which means there won’t be unhealthy individuals being accepted into the plan.
The people on a Plan F will be mostly underwritten, meaning they had to answer and pass health questions. Theoretically, Plan F will have a lot of healthy people on the books.
That could help Plan F see fewer rate increases, making it the plan of choice again.
We can’t know the future, but we anticipate Plan F rates to go down, giving individuals a great chance to get some great buys. As long as you’re healthy enough to pass medical underwriting, you can switch companies and take advantage of better pricing.
If your health allows, we encourage you to shop around and get a great buy on a Plan F.
What Should I Do?
At this point, you’re probably ready for the big answer: what should I do?
We recommend that you meet with your insurance agent, or one of our agents, once a year for a Medicare Supplement review.
Once 2020 approaches, your agent will keep an eye on your plan’s potential rate increases.
If you start experiencing big rate increases on your Plan F, you can switch to a cheaper company if your health allows. If not, you could always consider moving over to a Medicare Advantage plan or a Medicare Medical Savings Account. Both of these options do not have any health questions.
→ Learn more about the Medicare Medical Savings Account
Only time will tell what might happen to Plan F premiums, but in any case, our agents will be here to help you keep the most competitive prices for the best coverage.
If you’d like to have your supplement reviewed by one of our Medicare specialists, simply click on the button below to get schedule your free consultation.
Our team of dedicated, licensed agents can help you as little or as much as you need. Whether it’s answering a few questions about Medicare or creating a comprehensive Medicare Planner with you, we are your Senior Allies.
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