Plan F Discontinued – You don’t hear as much talk about Plan F as you used to. And since it’s not available to newly-eligible beneficiaries, many people are wondering if Plan F is going away or being discontinued. The short answer is that Plan F is still active, and some people can still enroll in it. However, everyone should be aware of the changes that were made in the past and the ones that we’re looking at in the future. If you are a person who is eligible for Plan F or already has it, you’ll want to continue reading to find out if it’s still the best choice for you.
Changes Made to Plan F
The Medicare Access and CHIP Reauthorization Act (MACRA) was passed in 2015. (For those of you wanting to know what CHIP stands for, it is the Children’s Health Insurance Program.) The goal of the Act was to incentivize healthcare professionals to remain contracted with the Medicare program. Prior to 2015, Medicare reimbursements were low, which placed a financial strain on healthcare facilities and providers. Part of MACRA’s goals was to increase those reimbursements for providers who offered quality care.
MACRA had good intentions, but the government had to find an income source for the higher reimbursements. A simple way to do that was to increase the payments made into the Medicare program by beneficiaries. The quickest way to do that was by eliminating Medicare supplement plans that offered first-dollar coverage, meaning that they paid for the Part B deductible. Plan F and Plan C both offered this benefit. (Plan F is far more popular, which is why we’re focusing on it instead of Plan C.)
While MACRA passed in 2015, changes to Plan F did not take effect until 2020. Any Medicare beneficiary who turned (or turns) 65 after December 31, 2019, can not enroll in Plan F. Individuals who were already enrolled are able to keep their plan. In addition, if a person delayed Medicare enrollment past the age of 65, they can still enroll in Plan F as long as their 65th birthday was before the year 2020.
So, what else might we expect to see happen with Plan F? The only thing we can expect to happen in the upcoming years are changes to the Plan F premium.
Medigap policies typically increase their premiums each year. How much they increase depends on which plan you have, the insurance company, where you live, etc. There is no set increase that all policies undergo. Plan F already has the highest premiums because it offers the most coverage compared to all other Medicare supplements. Unfortunately, it also has the highest rate increases, especially since the changes in 2020.
As we mentioned, rate increases are based on a variety of factors. One factor is the number of healthcare costs within the pool of members. The average age of Plan F enrollees is getting higher since there are no younger members entering the plan. Therefore, the average cost of healthcare is also increasing, hence the rise in premiums. Over the last couple of years, most insurance companies have undergone a 5% – 6% increase. We won’t know for sure what the future holds, but we can expect rates to stay on their current trajectory for the time being.
Alternatives to Plan F
If you aren’t eligible for Plan F, Plan G is the closest alternative. It enjoys all of the same benefits as Plan F, except for the Part B deductible.
Plan G includes:
- Part A deductible
- Part A hospital coinsurance, plus an extra 365 days of coverage
- Part A hospice copayments and coinsurance
- Part A skilled nursing coinsurance
- 3 pints of blood
- Part B copayments and coinsurance
- Part B excess charges
- Foreign travel emergency (up to plan limits)
Even Medicare beneficiaries who are eligible for Plan F may want to consider Plan G, regardless of the coverage difference. Plan G premiums are still higher than other plans, like Plan N, for instance, but they are significantly lower than Plan F. In nearly all cases, our clients save more than $233 by enrolling in Plan G vs. Plan F, which makes up for the Part B deductible. (In 2022, at least.)
If you are currently enrolled in Medicare supplement Plan F and want to look at a new plan that could decrease your premiums, call one of our licensed insurance agents. We’ll need to discuss your health history to find out if you are eligible to switch plans, but it is a simple process that won’t take much time at all. Call us today and schedule your appointment with our Medicare experts.