With the current uncertainty in the health care industry and questions about what changes may come to the Medicare program, it is tough to know what Medigap plan to choose if you are new to Medicare.
While it is good to have a variety of choices when making health care decisions, it is often confusing to know which one may be the best for what you may need. Medigap consists of numerous supplemental plans for those that are eligible. Moreover, 2019 has brought changes in offerings for beneficiaries, so it is best to review what those are before making a final decision.
Medicare Part A and B provide hospital and medical insurance, but involve a lot of out-of-pocket expenses. To get a handle on the costs, you can buy a Medigap policy, also referred to as Medicare supplement insurance. These policies help cover costs that Medicare Parts A and B do not pay. For 2019 and 2020 it may be a good idea for beneficiaries to consider Plan G.
Doing research will benefit any beneficiaries considering switching or new Medicare customers who need a comprehensive Medigap pan. Choosing a Medigap plan, however, can prove to be confusing and complex. Additionally, Medigap plans change year to year, and what you once had may no longer be offered and/or you are not happy with what replaced your previous plan. When plans change, it is difficult for beneficiaries to compare and contrast them. What was once popular may not be offered or has changed in ways you are not comfortable with and want something else.
It is important to note that Medigap policies are standardized in 47 states and each has a letter to identify it. Three states, Wisconsin, Massachusetts and Minnesota, have their own standardization for Medigap policies, meaning there is no Plan F in those states.
Each plan has different benefits and cost sharing levels. For instance, Plans K and L, cover six benefits, but for five out of the six benefits, the beneficiary pays anywhere from 25 percent to 50 percent of the cost. On the other hand, Plan F covers the maximum permitted for all nine benefits and for this reason Plan F is often referred to as the “Cadillac of Medigap plans.” This means that once the premium is paid, the plan pays from day one due to first dollar coverage.
Another option to consider is Plan G that covers eight of nine benefits. The plan holder is responsible for the Part B deductible. For 2019 the Part B deductible is $185. Once the first $185 is paid, Medicare covers costs for the rest of the year. However, beginning January 1, 2020 insurance companies will no longer sell new Medicare beneficiaries a Medigap policy that covers the Part B deductible. That would be Plans F and C. However, if you have one of those plans now you can continue with it.
If you are going to be new to Medicare and Medigap by 2020, do your research early as Plan F is losing its competitive edge pricing and there are some question as to whether or not Plan F will remain viable until December 2019. Currently many plans charge more to cover Part B deductible, much more than $185. If you are in Wisconsin, Massachusetts or Minnesota there is not going to be coverage available for Part B deductible sold to beneficiaries in 2020.
It is obvious the health insurance industry is in transition and must remain responsive to government changes relating to eligibility and payment schedules. In the meantime, if you have Plan G or are about to be eligible for Medicare now, try Plan G, which will continue past 2020 if you enroll now.