New York Estate Planning & Elder Law Blog
Beginning in 2020, Medicare supplement insurance policies, known as Medigap plans, will offer fewer choices to individuals who reach age 65 after January 1, 2020. Individuals who turn age 65 before 2020 will not be affected by these changes.
The ABCs of Medigap plains
Medigap plans, which are sold by private insurance companies, help cover cost-sharing aspects of Medicare Parts A and B, including copays, coinsurance, and deductibles. Some Medigap plans cover services such as hospitalization and medical care when you travel outside of the United States. Medigap policies generally don’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing. Source: Medicare.
Medicare Part A covers hospitalization procedures. Medicare Part B covers doctor’s visits and other outpatient therapy, along with durable medical equipment such as wheelchairs and walkers.
When you first enroll in Part B, you’re given six (6) months to purchase a Medigap policy without an insurance company nosing through your health history and deciding whether to insure you. After that, unless you meet a special exception, you typically must go through medical underwriting.
While a number of companies offer Medigap insurance, they can only offer policies from 11 standardized plans. Each is simply assigned a letter: A, B, C, D, F, G, K, L, M and N. Some states also offer a high-deductible version of Plan F (although it, too, will come off the list for newly eligible Medicare beneficiaries after 2019).
Medigap policies can be pricey, depending on your age, where you live and the level of coverage you choose. A 65-year-old male will pay anywhere from $126 to $464 monthly for a Medigap policy, according to the American Association for Medicare Supplement Insurance. For a 65-year-old woman, the range is $118 to $464.
What changed?
Congress created the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and signed it into legislation on April 16, 2015. Due to a 2015 change in federal law, coverage for Medicare’s Part B deductible, $185 for 2019, no longer will be permitted in Medigap policies sold to people who are newly eligible for Medicare beginning next year. This change means that the two Medigap plans that pay the annual Part B deductible, C and F, will be off the table for future 65-year-olds. If you currently have a C and F plan, no changes will occur with your coverage.
Is there a replacement plan?
To recap, beginning on January 1, 2020 Medicare Plans C and F will not be available for new enrollees, or people who turn 65 after that date. Although these plans will no longer be available, Plan G provides similar coverage minus coverage of Part B deductibles. Plan G covers copays, deductibles, and coinsurance associated with Part A, along with eighty percent (80%) of your emergency overseas medical care (within limits). It also includes coverage for excess charges that sometimes happen with doctor’s offices — i.e., balance billing, which is when the provider charges you for the difference between Medicare’s reimbursement rate and its own charges. There also will be a high-deductible version of Plan G.