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For people turning 65 next year, the lineup of Medicare supplemental insurance policies — aka, Medigap plans — will look somewhat different.
While the options will remain the same for people who turn 65 before Jan. 1, those who hit that Medicare-eligible age after this year will have fewer choices.
Due to a 2015 change in federal law, coverage for Medicare’s Part B deductible — $185 for 2019 — no longer will be permitted in Medigap policies sold to people who are newly eligible for Medicare starting next year. (Part B covers doctor’s visits and other outpatient therapy, along with durable medical equipment such as wheelchairs and walkers. Part A provides hospital coverage.)
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This change means the two Medigap plans that pay the annual Part B deductible — C and F — will be off the table for future 65-year-olds.
“Anyone who turns 65 before Jan. 1 can still enroll in Plan C or F even after that date,” said Elizabeth Gavino, founder of Lewin & Gavino in New York and an independent broker and general agent for Medicare plans. “This only affects people who turn 65 after this year.”
And, if you already have one of those Medigap policies, you can keep it and nothing will change, Gavino said.
Medigap plans, which are sold by private insurance companies, help cover cost-sharing aspects of original Medicare — Parts A and B — including copays and coinsurance.
However, Medigap policies can only be paired with original Medicare. In other words, if you choose to go with a Medicare Advantage Plan, you cannot purchase a Medigap plan. Also, these policies provide no coverage for costs associated with Part D prescription drug coverage.
When you first enroll in Part B, you get six months to buy a Medigap policy without an insurance company nosing through your health history and deciding whether to insure you. After that, unless you meet a special exception, you typically must go through medical underwriting.
Medigap policies can be pricey, depending on your age, where you live and the level of coverage you choose. A 65-year-old male will pay anywhere from $126 to $464 monthly for a Medigap policy, according to the American Association for Medicare Supplement Insurance. For a 65-year-old woman, the range is $118 to $464.
Medigap plan selection among Medicare beneficiaries
| Plan | 2017 | 2018 |
|---|---|---|
| F | 57% | 54% |
| N | 11% | 11% |
| D & G | 15% | 19% |
| H,I & J | 5% | 4% |
| C | 7% | 6% |
| A & B | 3% | 3% |
| K, L & M | 1% | 1% |
| High-deductible F | 1% | 2% |
While a number of companies offer Medigap insurance, they can only offer policies from 11 standardized plans. Each is simply assigned a letter: A, B, C, D, F, G, K, L, M and N. Some states also offer a high-deductible version of Plan F (although it, too, will come off the list for newly eligible Medicare beneficiaries after 2019).
This standardization means that, say, Plan A at one insurance company is the same as Plan A at another. Be aware, however, not every plan is available in all states. And three states — Massachusetts, Minnesota and Wisconsin — standardize their plans differently.
The most popular Medigap option has been Plan F, which is considered the Cadillac of Medigap plans due to its generous coverage and higher premium.
And although Plan F (and C) no longer will be available for future 65-year-olds, Plan G provides the same coverage, minus the Part B deductibles. That is, its coverage includes copays, deductibles and coinsurance associated with Part A, along with 80% of your emergency overseas medical care (within limits).
I’ve seen some carriers that have a 30% increase in premiums from one year to the next.
Elizabeth Gavino
founder of Lewin & Gavino
It also includes coverage for excess charges that sometimes happen with doctor’s offices — i.e., balance billing, which is when the provider charges you for the difference between Medicare’s reimbursement rate and its own charges.
There also will be a high-deductible version of Plan G.
Experts recommend giving thought to how often you use the health-care system when you’re considering which Medigap policy to choose.
For example, one option might come with a lower premium because it offers less coverage. Yet if you use the health-care system frequently and that lack of full coverage results in many copays or bills for excess charges, you might end up spending more anyway.
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“Those copays can sometimes cancel out the lower premium,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits in Fort Worth, Texas.
Also, it’s worthwhile making sure the company offering the policy has a history of low rate increases.
“I’ve seen some carriers that have a 30% increase in premiums from one year to the next,” Gavino said. “Others only have a zero to 6% increase.”
The Centers for Medicare and Medicaid Services has a chart on its website that shows the differences. You also can use the agency’s search tool to find available plans in your ZIP code.