Is the Medicare F plan going away?

The short answer is yes, to new Medicare beneficiaries beginning 2020. Those who were eligible for Medicare A prior to 2020 will continue to have the F plan as an option when choosing thier supplement coverage.

What happens to the millions of people currently enrolled in the Medicare plan F? Again, short answer is nothing. If you have a Medicare Plan F you will be grandfathered into the plan and you will continue to enjoy the same coverage as you have for as long as you had your coverage.

Why is it going away? This is a more complex answer. The  specific legislation that creating the change called the Medicare Access and CHIP Reauthorization Program Act (MACRA) was passed in 2015. In short it was a way to create money to shore up payments to doctors so that they would not leave the Medicare program. By simply tweaking the supplement plans ever so slightly, they are able to put less of a strain on the Medicare system, thus creating the extra revenue over time to pass along to providers.

How does this change accomplish savings for the Medicare program? Plan F is the most comprehensive supplement available to Medicare beneficiaries. When paired with original Medicare, it creates very rich major medical coverage because there are no deductibles, co-pays or coinsurance for Medicare approved services. Peopel who have such rich coverage are not shy about using it because there is no disincentive for doing so. The net impact is overutilization of the Medicare system.  The next plan down is the Medigap plan G. It covers all but the Part B deductible of $185. This is small by standards today, yet just that small deductible could make a big differnence in Medicare claims because now the beneficiary has some skin in the game. They may not be so inclined to run to the doctor for a tummy ache or a hang nail.

It’s been a generally excepted and sound principle which in theory will work. The big question is will that be the reality? It’s difficult to say and the answer will not come for several years. In the meantime, most agents have been suggesting the supplement plan G for clients even now for fear of the F plan rates increasing by higher percentages in the future. Historically, we have seen this to be the case. Going forward, there is no telling just how much current F plan policy holder rates will be impacted but if you have an F plan, I strongly encourage a review with your agent. You will likely see an immedicate savings and its’ also always better not to wait on insurance decisions because none of us no what the future holds.

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