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Summary: In 2020, Medicare Supplement Plan F and Plan C will no longer be available to those who became eligible on or after January 1, 2020. In addition, in 2020, Medicare will be on its way to closing the Medicare Part D Donut Hole.
Some Medicare Changes in 2020
Whether Medicare has been your health care plan for many years, or you expect to be eligible for Medicare on or after January 1, 2020, there are some things you need to know about changes coming to Medicare Supplement plans and the Donut Hole.
In 2015, legislation established these changes. They did so with a goal of saving the government money. This means you will almost assuredly have more out-of-pocket expenses.
Overview of Medicare Supplement (Medigap) Insurance
Medicare Supplement Insurance, also referred to as Medigap, is an insurance policy sold by a private company. Just as the term “supplement” implies, the purpose for purchasing such a plan is that it will pay for some of the costs that original Medicare does not pay for, like deductibles, copayments, and coinsurance.
You pay the private insurance company a monthly premium for your Medigap plan. This is in addition to the premium you pay Medicare for your Part B coverage.
Medigap policies are guaranteed renewable no matter what your health situation is. As long as you pay your premium, the company cannot cancel your policy.
How it works is that Medicare pays its share of the Medicare-covered expenses. Then, your Medigap policy pays its share. If there are copayments, you will have to pay these prior to services rendered. You will pay deductibles or your coinsurance amount after Medicare and Medigap have paid their share.
There are different types of Medigap Plans you can purchase. You make the choice based on your medical needs and your budget. Some of the most popular plans include Medigap Plans C and F.
- Plan C provides coverage for Part B deductibles. This means you have very little out-of-pocket costs.
- Plan F provides coverage for almost all deductibles as well as any Part B excess charges. An excess charge is when a Medicare provider does not accept assignment, or does not accept Medicare as payment-in-full for the charges. This means the provider may charge you up to 15 percent more than what Medicare paid for the service. Since Part F provides coverage for excess charges, with this Plan, you have practically no out-of-pocket costs.
Medicare Supplement Changes and Options for Those Enrolled in Medicare by 12/31/2019
As of December 31, 2019, Plans C and F are being eliminated. The good news is that if you enrolled in Medicare Part A by December 31, 2019, and have a Medigap Plan C or F, you may keep it. You may even purchase your Medigap Plan from a different company as long and you medically qualify, or make the change during an Open Enrollment or Guaranteed Issue time.
For example, if you receive a notice that your premium for Plan C or F is being increased, you will still be able to shop for a Plan C or F from a different company.
Plans C and F have been among the most popular Medigap Plans since they are the only ones that cover the deductible of Medicare Part B.
If you were eligible for Medicare prior to January 1, 2020, but not yet enrolled, there is a chance that you will still be able to purchase a Plan C or F Supplement Plan.
Options for Those Who Enroll in Medicare on or after 01/01/2020
If you enroll in Medicare on or after January 1, 2020, you will not be able to purchase a Medigap Plan C or F. There will be no Medigap Plan available to you that will cover the Plan B deductible. You will be able to purchase a Plan G, which has all the benefits of Plan F. However, it does not pay the Part B deductible.
Legislators thought that if every recipient of Medicare had to be responsible for some out-of-pocket expenses, they would go to the doctor less often. This will benefit the government by saving it money on health care expenses.
Donut Hole Closing by 2020
In addition to Medicare Supplement Plan F and Plan C going away, the Medicare Part D Donut Hole is closing. The percentage you will pay in the coverage gap will decrease as the Donut Hole closes.
If you’re in the Donut Hole, you will now get a discount on your brand-name drugs and additional savings on your generic and brand-name drugs until it’s officially closed in 2020. The gap is closing because the manufacturers will continue paying large percentages of the drug, while Medicare drug plans will increase the amount they cover.
Currently, Medicare pays 56% of the price of your generic drugs while you’re in the Donut Hole. You are responsible for the remaining 44%. In 2020, the number you will be responsible for is only 25% of the cost. This results in a huge saving for Part D beneficiaries in the Donut Hole.
If you’re unsure if your prescriptions will be covered at this new discount, you should contact your drug plan or pharmacist. Ask if your current medications will receive a discount while in the Donut Hole. In 2020, Part D will cover your brand-name drug if a company that is participating in the Medicare Coverage Gap Discount Program makes the drug. This is the program that provides these discounts and aid once you’re in the Donut Hole, or coverage gap. If the company does not participate in the program, Part D won’t cover your medication at all.
To recap: by 2020, you will not pay any more than 25% for a covered brand-name drug or prescription drug during the coverage gap. This 25% is the same percentage you’ll pay once you meet your plan’s deductible. This is until you meet the out-of-pocket spending limit. These changes will result in more savings for you, the Part D beneficiary, as you will have to pay less than your plan pays.
How We Can Help
At GoMedigap, we help Medicare recipients learn more about supplements. We’ll also show how to shop for one that meets their specific needs and their budget. We understand the different state requirements and restrictions. For example, the standardization of Medigap Plans are different in Massachusetts, Minnesota, and Wisconsin.