Medicare Supplement plans are also known as Medigap plans. They are insurance plans that add on to the coverage you get from Original Medicare (Part A and Part B). Medicare Supplement plans help with some of the roughly 20 percent of out-of-pocket costs left over after Original Medicare pays its share. This added-on coverage gives people peace of mind that the medical services they need will be covered.
Medigap plans are standardized and labeled by letters A through N. Each lettered plan offers a different set of benefits. The benefits in a Medicare Supplement plan with the same letter are always the same, so it is easy to compare their costs. For example, all Medicare Supplement plan A’s have the same benefits no matter which insurance company offers the plan.
Medigap Plan Changes in 2020
Medigap plans are great options for people who want more coverage than just Original Medicare. However, legislation that will go into effect in 2020 will change which plans people enrolling for the first time will be able to buy.
Before 2020, three Medicare Supplement plans — Plans C, F, and F High Deductible — were designed to pay for the Medicare Part B deductible (which is $185 per member in 2019). The new legislation stops Medicare Supplement plans from paying Part B deductibles, so these three plans won’t be offered to people enrolling in Medicare for the first time in 2020.
What Medigap Plan Changes Mean for Beneficiaries
Plan F is considered the most complete Medicare Supplement plan available. Plan C, while not as complete, offers many of the same benefits. In 2020, people newly eligible to Medicare won’t be able to buy Plan C or Plan F.
- If you already have Plan C or Plan F: There’s nothing to worry about! You can keep renewing your plan each year and receive the full benefits. Anyone already enrolled in one of these plans as of January 1, 2020, can remain on that plan for life. However, if you want to change the company you buy that plan through, you can be denied coverage or charged higher premiums based on your health conditions.
- If you are not yet on Original Medicare: If you want to enroll in Plan C or Plan F, you’ll need to enroll in Original Medicare before January 1, 2020.* There is a seven-month Initial Enrollment Period (IEP) for enrolling in Original Medicare. It begins three months before the month of your 65th birthday and ends three months after it. Depending on when you turn 65, you may want to enroll right away, even if you are still working.The best time to buy a Medigap policy is during your six-month Medigap Open Enrollment Period. It automatically starts the month you turn 65 and enroll in Part B. During this time, you can buy any Medigap policy, even if you have health problems. After this enrollment period, you may not be able to purchase a Medigap policy, or it may come at a higher cost.
- If you are currently on another Medigap plan: You can switch to Plan C or F if you are still in your original Medigap Open Enrollment Period. This is the six months that begin with the first month you had Medicare Part B coverage. If you are past that period, depending on the laws in your state and your health, insurers may refuse to cover you, or may charge a higher premium. There are several exceptions, though, so you should consult with a licensed insurance agent who understands your options to see if you qualify.
- If you have a Medicare Advantage plan: You can drop that coverage and enroll in Original Medicare during the Medicare Advantage Annual Enrollment Period (AEP). AEP runs from October 15 until December 7, but it may be hard after you drop your Medicare Advantage coverage and return to Original Medicare to get on a Medigap plan, including Plan C or Plan F. You will likely have to undergo medical underwriting. That process determines if you can get coverage and what your monthly premium should be. Depending on the laws in your state and your health, insurers may refuse to cover you or may charge a higher premium. Again, we suggest asking a licensed insurance agent to help you understand your best options.
* If you become Medicare eligible before January 1, 2020, based on disability or ESRD status, OR turn 65 before January 1, 2020, whether eligible for Medicare on that date or not, you would be eligible to buy a Plan C or F when you are entitled to Medicare Part A and enrolled in Part B. For example, if you continue to work past your 65th birthday and are covered by your employer’s group insurance plan, if you retire and enroll in Medicare after January 1, 2020, you will be eligible to buy a Plan C or Plan F during your six-month Medigap Open Enrollment Period.