Traditional Medicare covers up to 80 percent of approved costs. This includes approved expenses incurred through hospitalization, doctors, and medical procedures. Under Medicare, you are expected to cover the remaining 20 percent of healthcare costs. Within this system, a Medigap policy would fill the coverage gaps in Medicare.
Medigap plans are sold by private insurance companies and are a supporting plan to Parts A and B of Medicare. There are 11 standardized Medigap plans, each assigned a letter from A to N. Of these, Plan F is very popular since it entails high coverage with a higher premium. A plan F entailed no deductibles, no copays, and no bills after patients leave the hospital.
However, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) has tweaked things so that Medigap looks a little different now. The key difference lies in cutting off access to Medigap Plan C and F for seniors who turned 65 this year.
Here’s what the change means for you in four different scenarios
You Turned 65 This Year
You will not be able to purchase Medigap Plan C or Plan F. These two parts used to be able to cover the Medicare Part B deductible ($185 in 2019) and were the more robust plan that aided Medicare coverage. Instead, you may purchase Plan D and Plan G.
These two plans cover all the same out-of-pocket costs, except for the Part B deductible coverage. States like Massachusetts, Minnesota, and Wisconsin who have their own Medigap systems are also subject to this MACRA clause.
You Turned 65 This Year, But Didn’t Enroll For A Medigap Policy
The timing here is key. You can still purchase plan C or Plan F if you’re within the Medigap open enrollment period or have a guaranteed issue right once you enroll in Original Medicare. Therefore, those who turned 65 toward the end of 2019 are not counted as new beneficiaries to Medigap.
You Already Have Plan F Or Plan C
If you had already purchased Plan C or Plan F of a Medigap plan this year, nothing changes for you. You can still renew it with your insurer and keep paying the premiums as before. However, if you should choose to change plans because of high premiums, you have to comply with your state’s specific laws.
If you choose to terminate your Medigap plan, you will have a guaranteed issue period. As with any change, where private companies adapt to government directives, beneficiaries can expect a rise in prices and must make choices accordingly.
You Are Under 65 But Are Eligible For Medicare
Medicare was designed for people over 65. However, individuals under that age bracket who suffer from a pre-existing condition, have a disability or have End-stage Renal disease, can apply for Medicare. If you are a part of this category, then the state you live in dictates what Medigap plan is available to you. An insurance company isn’t obligated by federal policy to sell a Medigap plan to anyone under 65, but many states offer at least one standardized plan.