Is Plan F Being Discontinued?
It is surprising how many agents do not fully understand the changes taking place starting in January.
While Plan F is not being discontinued, it will not be available to people who are newly eligible for Medicare after January 1, 2020.
First of all, there's no reason to panic. It's not like we're rolling into Y2K and the world might stop turning. It's just another Medicare change.
Section 401, of the Medicare Access and Chip Re-authorization Act of 2015 (MACRA), is what we are interested in:
"Amends SSAct title XVIII to deny Medigap policies that cover Part B deductibles to Medicare beneficiaries newly eligible on or after January 1, 2020. "
What this means is that Medigap Plan F, High-Deductible F, and C can't be sold to newly eligible Medicare beneficiaries as of January 1, 2020.
You're considered newly eligible if you've attained age 65 or first became eligible for Medicare due to age, disability, or ESRD on or after January 1, 2020.
Plans D, G, and High-Deductible G (new) will be guaranteed issue plans for newly eligible Medicare beneficiaries.
Current enrollees who have Plan C, F, or High F can keep their plan. They can even continue to buy these after January 1, 2020 – they just have to pass underwriting.
Helpful Tips on Handling These Changes
1. Don't make it a big deal.
Make sure your clients know that there is nothing to worry about. Just know the facts, and make sure you relay the necessary information to your client:
- If you already have a Plan F, you can keep it.
- If you were eligible for Medicare before January 1, 2020, you can buy a Plan F whenever you want as long as you can pass underwriting.
- If you're eligible for Medicare on or after January 1, 2020, you can't buy an F. However, you still have lots of plans to choose from, including Plan G and N.
2. Keep an eye on rate increases.
It's nothing new – you're doing this already. Anyone who purchased a Plan F before 2020 is probably going to see future rate increases if they haven't already. If you do see rates going up for your Plan F clients, see if you can move them around. There are sure to be great buys on other Plan Fs, or they may want to switch to another plan, like a G or an N.
Starting in 2020, we think we'll start to see even more interest in Plan N, so you might consider promoting it to your clients if you aren't already. In fact, it's already gained some popularity. Carriers are even incentivizing agents to move toward the N with higher commissions.
If your client is stuck due to underwriting, you might take a look at other options for them, such as the Lasso Healthcare MSA. Depending on how high their Plan F rates have become, it may even make more financial sense for them to do the MSA in combination with the Lasso HIP.
All we can do as agents is adapt to the changes and use it as an opportunity to help our clients.
If more of your clients start gravitating towards Plan N after 2020, adapt! If they start asking about Medicare Advantage plans and the Medicare MSA as an alternative (which is more and more common), adapt!
We can't keep doing the same things when everything around us is changing. Don't be afraid of change – embrace it, and keep serving your clients like you've always done.
As always, if you need any support or have any questions, your Eldercare team is here to lend a helping hand.