Plan F: Changes Coming in 2020

hand pointing to the year 2020Do you have a Medigap Plan F? What changes you need to know now.

You may have heard that changes are coming to Medicare Supplements in 2020. In 2015, Congress passed MACRA (Medicare Access and CHIP Reauthorization Act), a bipartisan law to provide physicians with incentives and higher pay to accept and treat more Medicare patients. MACRA added value and quality to Medicare plans, but in order to pass this, Congress needed to make changes to how Medicare patients used their supplement plans. MACRA specifically phases out Plan F and C because these plans don’t require patients to meet a deductible (essentially, it was rolled into your monthly premium), and this resulted in patients sometimes over-visiting the doctor for minor complaints.

So, who does this affect?

Most directly, MACRA affects those who will be eligible for Medicare in or after the year 2020. For all those enrollees, Plan F, High Deductible F, and the less popular C will no longer be offered. For those who are eligible before 2020, but are waiting to enroll because of employer coverage, you will still have the option to enroll in Plan F (although we don’t recommend it—keep reading to see why).

What if I currently have Plan F?

If you are currently enrolled in Plan F, you have the option to be grandfathered in and keep Plan F, but because fewer people will be on Plan F, your rates will continue to go up for the same coverage! A better option is to switch to a Plan G or N and not worry about the 2020 change. For those on the high deductible Plan F, our understanding is that a high deductible Plan G will be introduced (we’ll update this post with those details when we know them).  We strongly recommend that you switch from Plan F to a Plan G, because this won’t result in a significant change in coverage, and it’s quite likely that your rates will decrease.

How do I choose between Plan G and Plan N?

For those who are younger than the age of 70, we recommend Plan G, as it provides the same level of coverage as Plan F; the difference being a lower monthly premium with an annual deductible of $183. For those who are older than age 70, we generally recommend Plan G or N, although with Plan N, we advise a direct conversation with an independent agent who can carefully review that plan with you, as holds unique complexities. If you still feel reluctant to switch plans, you can review how the coverage compares here, and review how current sample rates compare in the chart below.*

65 70 75 80
  Male  Female   Male  Female   Male  Female   Male  Female
Plan F $130.12 $114.82 $133.15 $116.13 $153.67 $133.63  $192.15 $167.09
Plan G $103.87 $94.43 $111.55 $101.41 $134.19 $120.62 $155.11 $141.01
Plan N $87.71 $76.30 $98.21 $85.38 $116.12 $100.96 $136.28 $118.54

*(1) All rates are non-tobacco and non-discounted rates. Household discounts may be available on a case-by-case basis. And, tobacco user rates may be higher.

As you can see, Plan G and Plan N are already less costly than Plan F and the savings more than compensate for the $183 annual deductible that Plan G and N require; in our example, a 65-year-old non-smoking male on Plan G annually pays—with deductible included—a total of $1,429.44, while annually paying $1,561.44 with Plan F.

What should I do next?

Your next step should be to discuss the 2020 changes with an informed, reliable, and independent agent. An independent agent can advise you to implement the most valuable changes to your Medicare plan. At Griffin Insurance Solutions, we are successfully guiding our current clients through these changes, and we can help advise you as well. To learn more about the changes coming in 2020 or any other questions you may have about Medicare, please contact us for an in-person appointment, by email, or phone at 919-704-6147 or 800-774-1434.