As a reminder, Medicare supplement plan F is no longer an option for new Medicare enrollees. Anyone aging into or signing up for Medicare on or after January 1, 2020, will not be able to purchase a Plan F Medigap plan. Plan C is also being eliminated as an option for new enrollees.
AHCP first wrote about this change in December 2018, so hopefully you were prepared, but we wanted to share a reminder since you may have clients—including existing Medicare supplement clients—who have questions about this development.
We knew this was coming (since 2015)
As Forbes explains, “The Medicare Access and CHIP Reauthorization Act of 2015 mandated that, as of January 1, 2020, insurers can no longer sell to newly eligible Medicare beneficiaries Medigap policies (Medicare supplement insurance) that cover the Part B deductible. That’s specifically Plan F and Plan C.”
This was the same law that called for the transition away from SSN-based Medicare numbers to the new, randomly-generated Medicare Beneficiary Identifier. That transition was also complete as of January 1, 2020.
What about clients who already have a Plan F?
Medicare beneficiaries who currently have a Plan F (or C) Medicare supplement are grandfathered in; they can keep their existing plan. In fact, anyone who had Medicare before January 1, 2020, can still purchase a Medigap plan C or F, though they may have to answer medical questions if they have had Part B for more than six months.
Plan G will become the most popular supplement
In the past, Plan F has been the most popular Medicare supplement plan. Since it will no longer be available to new beneficiaries, Plan G will most likely be the most popular supplement going forward. Plan G covers the same holes in Medicare as Plan F with the exception of the annual Part B deductible, which is $198 in 2020.
Because Plan G does not cover the Part B deductible, it is usually lower in price than Plan F. With some carriers, the annualized difference in premium is pretty close to the amount of the Part B deductible, so it’s basically a wash.
Change creates confusion. Confusion creates opportunity.
Anytime the government changes the rules, people are confused. That’s understandable. Health insurance is confusing enough as it is, and keeping up with all the changes can be difficult. So, the first thing you’ll want to do is make sure your current clients, especially clients who currently have a Plan F or C supplement, understand that they are okay and don’t have to make any changes.
After that, though, you might want to use this change as an opportunity to educate people who aren’t yet clients. If you can help them understand their options and clear up any confusion they may have, they may decide that you’re the type of agent they’d like to be working with.