From January 2020, new enrollees in Medicare will not have access to Medigap Plan F. However, if a person already has this plan, they can keep it.
Private insurance companies offer Medigap health insurance. Medigap plans help people pay the health costs that original Medicare does not cover. There are currently 10 Medigap plans, including Plan F.
This article looks at Medigap and its plans. It also discusses eligibility, enrollment, and costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare supplement insurance is also known as Medigap. The plans available under Medigap help fill in the gaps in Medicare costs, which are costs that original Medicare may not cover.
These additional costs may include premiums, deductibles, copays, and coinsurance.
Private companies that Medicare approve offer Medigap plans. Each of the 10 Medigap plans is identified by a letter: A, B, C, D, F, G, K, L, M, and N.
Across providers, plans with the same letter must offer the same benefits. That being said, some companies may include more benefits.
It is important to note that Medigap providers in Wisconsin, Massachusetts, and Minnesota standardize their plans and policies differently than those in other states.
There are currently 10 Medigap plans, which provide coverage for various Medicare benefits.
Some items, such as Part A coinsurance and hospital costs after a person has used up their Medicare benefits, have 100% coverage by all the plans. A person gets additional coverage for up to 365 days.
However, other items have varying levels of coverage, depending on the plan details.
For example, coverage for Part B copay or coinsurance, the first 3 pints of blood, and Part A hospice care copay or coinsurance varies from 50% to 100% among these plans:
- Plans A, B, C, D, F, G, M, and N provide 100% coverage.
- Plan K provides 50% coverage.
- Plan L provides 75% coverage.
Six plans offer 80% coverage for foreign travel exchange, though not A, B, K, or L.
Only Plan K and Plan L have out-of-pocket limits in 2021. These limits are $6,220 for plan K and $3,110 for Plan L.
In some states, a person enrolled in Plan F could have a high deductible plan. That means that effective January 1, 2021, a person would pay up to $2,370 before the policy pays anything.
A person can find a comparison of all 10 plans using this online tool.
From January 1, 2020, a change in federal law means that Medigap plans are not allowed to pay the Medicare Part B deductible.
Therefore, after that date, companies cannot offer plans that cover that deductible, such as Plan F, to people who are new to Medicare.
However, a person who had enrolled in a Medigap Plan F before January 1, 2020, can keep their plan.
Medigap Plan F has a standard version together with a high deductible plan that providers in some states offer. The high deductible plan does not start paying benefits until after a person has met the yearly deductible, which is $2,340 in 2020.
To enroll in a Medigap policy, a person must have original Medicare parts A and B.
There are several enrollment periods.
One is when a person is first eligible for Medicare, which corresponds with their Medigap open enrollment period. It starts on the first day of the month a person turns 65 and has enrolled in Medicare Part B, and it lasts for 6 months. A person cannot change or repeat this period.
The initial enrollment period is when a person is first eligible for Medicare Part B. This period starts 3 months before the month a person turns 65, includes their birthday month, and ends 3 months afterward.
During the initial enrollment period, a person can buy any plan available in their area, even if they have health problems.
Penalties
If a person waits to enroll in Medicare Part B, they may pay a penalty on the premium each month unless they are eligible for a special enrollment period.
In addition, a person may have to pay a higher amount — or they may not be able to get a Medigap plan at all — if they wait until after their Medigap open enrollment period.
This is because after the open enrollment period has expired, private companies can use medical underwriting to decide whether or not to accept a person to a plan and to determine how much to charge them.
A person can check the plans available in their area using a Medicare online tool. Costs vary among plans, even among those of the same designated letter.
To enroll in a Medigap plan, a person can use the company’s online form or ask for a paper version. The company cannot ask questions about family history or ask a person to take a genetic test.
Guaranteed issue rights
A person may be eligible for guaranteed issue rights if they had other coverage that has changed.
In these cases:
- Companies must offer a person a Medigap plan.
- The policy must cover preexisting medical conditions.
- The company cannot charge more because of health conditions, past or present.
Switching Medigap plans
A person may decide to switch Medigap plans for various reasons, such as if their health situation changes and they need a different level of coverage.
A person may switch without penalty if they have had the first policy for under 6 months. People who have a preexisting medical condition may have to wait up to 6 months for the new policy to cover their health condition.
In some states, Medicare may offer a person a SELECT policy, which is similar to Medigap but limits a person to a local network of doctors and hospitals. With that policy, a person has 12 months to decide if they want to switch to a standard Medigap plan.
However, the policy provider may charge more for the new plan after the Medigap open enrollment period.
A person will pay a premium for the Medigap plan and a premium for Medicare Part B. Many people do not pay a premium for Medicare Part A.
A Medigap comparison table can help a person compare various plan premiums and coverage. There are also tools that offer:
- the name and contact information of the companies offering the plan
- a link to the company website
- an explanation of how they determine premiums
Although Medigap policies are standardized, companies may charge different amounts for the same or similar policies. People can learn more about Medigap costs using this information.
Private companies sell Medigap plans to help people cover the out-of-pocket cost gaps in Medicare.
Beginning January 1, 2020, no policy can provide coverage for the Medicare Part B deductible. Because this coverage was one of the benefits of Medigap Plan F, the plan is no longer available to people who are new to Medicare.
A person who enrolled in the plan before January 1, 2020, can keep it.