New Service Helps Seniors Save on their Medicare as 2021 Open Enrollment Nears

The MACRA Act of 2015 prohibits coverage of the Part B deductible. As the new law looms, California, Texas, and Pennsylvania seniors brace for Medigap rate hikes.

Earlier today MedicareWire announced the launch of a free service designed to help seniors save money on their supplemental Medicare insurance, get the most coverage available, and avoid costly penalties. New Medicare beneficiaries are now locked out of buying two of the most popular Medicare supplements, which are forbidden by Federal law.

The Medicare Access and CHIP Re-authorization Act of 2015 (MACRA) changes regulations on popular Medicare Supplement insurance (Medigap) coverage. The new law states that on or after January 1, 2020, a supplemental insurance that covers the Part B deductible may not be sold or issued to a newly eligible Medicare beneficiary.

Medicare Part B is the medical insurance component of traditional Medicare. The annual Medicare Part B deductible is $198 in 2020, and is expected to increase as much as 2.7% in 2021.

Seniors whose birthday is on or before December 31, 1954 are the last group eligible to purchase a Medicare Supplement Plan F policy. Medicare Supplement Plan C is another policy that can no longer be sold and one of the closest alternatives to Plan F. As of January 1, 2020, new beneficiaries can’t get Plan C because it pays the Part B deductible.

The issue at hand is first dollar coverage. That’s where an insurance policy kicks in to pay its costs without the consumer paying a deductible, co-payment or coinsurance of any kind. For decades, seniors with a Plan F had full coverage on all health service approved by Medicare, and it’s costing the government millions of dollars and consuming valuable healthcare resources.

According to David Bynon, founder at Medicare Wire, “Congress wants seniors to have more skin in the game. When they don’t have to pay their Part B deductible, many seniors make appointments to see their doctor or show up at the emergency room unnecessarily. Lawmakers hope that forcing beneficiaries to pay the Part B deductible will reduce unnecessary healthcare costs.”

If you already have a Plan F policy you can keep it. The law only affects new policies. However, keeping a Plan F policy in the future could be very costly.

“The change from 10 standardized policies [for new beneficiaries] to eight is going to cause a ripple effect that’s good for the insurance companies, but not for seniors, “ Bynon explains. “While the new law allows people enrolled in a Plan F to keep their policy, it doesn’t prevent insurance carriers from hiking rates to force seniors out. That’s why we’re offering our free service. When seniors see their rates hike up in January, we want to be there to help them find the best Medicare supplement plan at the lowest rate.”

Most insurance experts agree that Plan G is a close second to Plan F. It covers everything that Plan F covers, except the Medicare Part B deductible. After January 1, 2020, Original Medicare combined with a Medicare Plan G policy will be the best coverage available. On the bright side, most seniors getting a Plan G in 2020 are realizing an overall cost savings by paying their Part B deductible themselves.

The good news for Medicare beneficiaries buying supplemental Medicare coverage after January 1, 2020 is that the Part B deductible is one of the smallest costs in the Medicare. In 2020 the Part B deductible is $198 per year. By comparison, the Part A (hospital insurance) deductible is more than seven times that amount. Nearly all Medigap plans cover at least 50% of the Part A deductible, which in 2021 is $1,452 (up from $1,408 in 2020) for each benefit period.

Bynon says that Plan G isn’t the only option available, and that healthy and savvy seniors might do well to look at Plan N. “The benefit of Plan N for healthy people,” the founder says, “is that it saves you a lot in monthly premiums without a lot of financial risk. Plan N does not pay excess charges and it requires the beneficiary to pay up to $20 to see their doctor and up to $50 to use the emergency room. Other than that, everything that Medicare covers is paid. For healthy people, who infrequently see their doctor, this plan is very affordable.”

Seniors can compare Medicare supplement plans in their state using the tool. But, they may also request a free rate analysis across all insurance carriers that serve their zip code. “As far as we know,” Bynon exclaims, “this is the first service of its kind. Most insurance agencies offer free quotes, but they only show beneficiaries the carriers they represent. We’re not an agency. We want seniors to see all of their options, and that’s what our free service provides.”

The Medicare Annual Enrollment Period (AEP) begins 15 October and ends on 7 December. Although the AEP is exclusive to Medicare Advantage and Medicare Part D plans, people turning age 65 during the last quarter of the year — nearly 900,000 new beneficiaries — use this period to figure out which options are best for their personal health and financial needs.

Release ID: 88976548