Major Changes Coming for New Medicare Enrollees in 2020
By Tucker Thompson, CSA
Worries abound about the financial health of Medicare. In addition to funding issues, worries exist about doctors no longer accepting Medicare patients because of reduced Medicare reimbursements they receive. Hoping to strengthen Medicare, Congress has begun instituting changes. Let’s review.
Medicare began in 1966 as a government program designed to help “seniors” with ongoing medical care and costs. Today Medicare consists of Part A (hospital insurance); Part B (medical insurance including doctor’s visits/outpatient services/durable medical equipment); Part C and Part D (prescription insurance). There are, however, deductibles and co-pays for Medicare services that Medicare requires patients to pay themselves, in addition to any monthly premiums. For example, Medicare pays only 80% of approved Part B charges for physician visits, durable medical equipment and outpatient services, leaving patients responsible for the remaining 20% of those bills.
To help cover some or all of these “gaps,” private insurance companies offer supplemental insurance including Advantage Plans, Medigap Policies and Drug Plans. Generally, policies with the highest monthly premiums pay a greater portion of these “gaps” for the patients, while policies with the lowest or “0” premiums expect patients to pay a greater proportion of their medical bills not paid by Medicare. The most comprehensive supplemental insurance a person can buy today is a Medigap Plan F. When a person with Medigap Plan F goes to a participating Medicare physician or a hospital, Medicare still charges deductibles and co-pays, but Medigap Plan F pays these charges for that person. Remember, though, Plan F premiums are higher than most other plans too.
So what’s changing?
Beginning in 2020, people who are first time enrollees in Medicare will no longer be able to purchase Medigap Plan F or Plan C based on a law passed in 2015 hoping this would help reduce Medicare’s overall annual costs. Be assured, people already on Plan F or C when 2020 rolls around are grandfathered in. What should you do? Review your coverage annually with an experienced independent agent licensed with several companies to see if any changes make sense.
Tucker Thompson, CSA, has worked in the insurance field for over 24 years in Life Insurance, Long-Term Care, Medicare Supplements, Medicare Advantage Plans, and Prescription Drug Plans.