MACRA and Plan F Changes
We’ve seen a lot of changes to Medicare in recent years. I’d like to address a few misconceptions about a change coming up in 2020. I’ve heard things like “Plan F is gone after next year” or “those sticking with their Plan F will see huge rate hikes after 2020.” Allow me to clarify:
The change is noted in the Medicare Access and CHIP Reauthorization Act of 2015. Sec. 401 amends SSAct title XVIII to deny Medigap policies that cover Part B deductibles to Medicare beneficiaries newly eligible on or after January 1, 2020.
The soon-to-be-65, will not be able to purchase a Plan F policy unless they are on Medicare before January 1, 2020. For the 60 million people on Medicare right now, Plan F will still be available with no future plans of changes.
Predicted rate increases are questionable, considering that Plan F won’t be getting guaranteed issue business after the change. People electing for Plan F will be underwritten, which could mean better stability and create less of a rate increase possibility.
How does this affect Plan G? Those aging in for open enrollment won’t be able to buy a Plan F, but may look for the next plan with similar coverage. If consumer purchase does shift towards Plan G, it will be taking on a majority of guaranteed issued business. The impact of the purchase shift could create higher increases on the Plan G rates throughout the industry.
Keep in mind, this centers around the Part B deductible, which has gone up considerably since the inception of Medicare. Americans are used to paying deductibles, some larger than others. Other plans, such as N, will start gaining popularity after 2020. Rate increases are inevitable, so it is important for both agents and consumers to be educated about their choices.
Sources: Medicare Part B premiums https://www.cms.gov/newsroom/fact-sheets/2018-medicare-parts-b-premiums-and-deductibles
NAIC guidance https://www.naic.org/documents/cmte_b_senior_issues_related_macra_faq_2018.pdf