For decades, Plan F has made financial planning easier for seniors across the United States. This top selling plan covers the gaps in Traditional Medicare and leaves beneficiaries with a $0 out of pocket expense.
Plan F is the most comprehensive plan available to Medicare beneficiaries. The premium reflects the coverage and some agents may recommend another plan depending on the needs of the beneficiary.
However by 2020, 1st dollar coverage plans, including Plan F, are going away. Since both Plan F and Plan C cover the Part B deductible, both will be phased out. The good news for Medicare recipients is that the Part B deductible is not one of the biggest health care costs under Medicare.
If you are already enrolled in the Plan F or Plan C, you can continue your coverage under that plan. You can also continue to enroll in these first-dollar coverage plans after they are discontinued, as long as you became Medicare eligible prior to 2020. These plans are only being discontinued to those who are NEWLY eligible for Medicare AFTER 2020.
Why is Plan F Going Away
In a need to cut spending, congress decided that by no longer letting companies cover the Part B deductible, medical overuse could potentially be prevented. Plan F covers the Part B deductible.
The financial aspect is not the only reason this plan is being removed. The big issue congress has been avoiding is getting doctors better paid for their Medicare services in the next few years.
If beneficiaries cover the deductible instead of insurance companies, the doctors will be better paid.
If the doctors are not adequately paid when they are doing work in the Medicare program, they will not want to work with Medicare patients, as I am sure you can imagine. Threats were made by many health care providers to quit the Medicare program if they were paid any less.
Medicare Access and CHIP Reauthorization Act of 2015
Congress created the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and signed it into legislation on April 16, 2015.
This bipartisan legislation created the Quality Payment Program which does several things; like:
- Repeal the Sustainable Growth Rate formula
- Change how Medicare rewards clinicians for value instead of volume
- Arranges quality programs under the Merit Based Incentive Payments System
- Gives bonus’ for use of eligible alternative payment models.
MACRA is also requiring CMS to remove Social Security Numbers from all Medicare cards by April 2019. Also, Medicare premiums for higher income individuals and families will be increasing.
If you will be impacted by these changes, you have plenty of time to plan avoiding or minimizing any financial impact in the future.
Ideally, this new legislation put forth by congress will get doctors the fair payment they deserve for their Medicare services. The only difference is new enrollees will be responsible for the Part B deductible and Plan F will be phased out.
Critics have mentioned that by eliminating Plan F there will be people who choose to forego care altogether, resulting in even higher expenses later. If health conditions are not diagnosed early enough, Medicare could end up paying the hefty price later.
Plan Options For Those Who Are Not Medicare Eligible Until After 2020
One of the top plans available to Medicare recipients that are not eligible to enroll until after 2020 is Plan G. Enrollees usually find that Plan G is the most affordable plan, depending on the state and enrollment type.
Sometimes, the Plan F premium will be $250 more per year than a Plan G. Making Plan G the more sensible plan anyways. Talking with an insurance agent will help ensure you get the best coverage for your needs.
Plan G covers everything Plan F covers, except for the Part B deductible. The doctor flexibility and $0 copayments give beneficiaries on this plan excellent coverage.
Plan N is another good option that is not getting discontinued. It is recommended that Medicare beneficiaries talk with an insurance agent about the plan that will be best suited for your individual healthcare and financial needs.
It is thought that by removing first-dollar coverage plans, we will reduce annual expenditure of Medicare. We’ve seen arguments on all sides of the spectrum and will only know the outcome when we arrive in the future.
If you are already enrolled in a first-dollar coverage plan, you will not need to change it, you are “grandfathered” into your plan.
You can change your plan if you desire different coverage. Talking with an insurance agent will help ensure you get the best coverage for your needs.
Will There Be Rate Hikes?
Some beneficiaries are worried that the rates for Plan F will increase substantially, like in 2010 when plans H, I, and J were discontinued.
The discontinuation of first-dollar coverage plans is different than any other past discontinuation of plans. This is due to the fact they will still be accepting new enrollees after they are discontinued. This could prevent premiums from spiking.
Only one state, Idaho, has formed legislation to be sure premium increases won’t impact Plan F beneficiaries.
The Idaho Department of insurance received misleading information from agents, telling people to switch plans now to avoid potential rate increases. Idaho Rule 18.01.54 protects Plan F policy holders from seeing a higher premium increase than other letter plan policy holders.
Ideally, beneficiaries will not experience higher than usual costs, doctors will get paid fair compensation and congress found a quid pro quo solution to a plethora of issues. If the changes don’t work, then we will need to see more visionary solutions in the future.
MACRA and How It Affects Your Care
MACRA implements values-based initiatives aimed at improving care and access for Medicare and CHIP beneficiaries. The Quality Payment Program aims to transition the healthcare industry from fee-for-service to value-based care.
This means Medicare physicians, physician assistants, and nurses must participate in either an Alternative Payment Models (APMs) or in Merit-based Incentive Payment System (MIPs).
The clinicians’ performance score will determine payment adjustment in future years. CMS will determine a positive, neutral or negative payment scale.
What this means is health care providers are going to be working toward doing their best for you and not overbook to see as many patients as possible to receive more money.
Ideally, this will make doctors put quality before quantity into their practice.
What You Need to Know
Opponents to this legislation pointed out one truthful obvious fact; if someone has the money to purchase high-dollar coverage, the should be allowed to have that costly coverage.
In theory, people will be detoured from going to the doctor for minor problems when they are responsible for paying the Part B deductible.
This isn’t the first change congress has made to the regulations of Medicare Plans. It would seem as though big changes are made every ten years:
- In 1990, congress made insurance companies standardize the plan options for Medicare beneficiaries.
- In 2010, Plans E, H, I and J were removed because they included prescriptions drug coverage.
- By eliminating the drug coverage option, congress was able to cut Medicare spending
- In 2020, Plans F and C are being eradicated because they include the Part B deductible
- By eliminating the Part B deductible, ideally, congress will cut Medicare spending
Congress will not solve the Medicare-financing problem by borrowing funds. Debt in the Government is just a promise to raise future taxes. If congress does not cut Medicare spending, young workers will face massive tax increases.
Millions of people will be affected by this change. Thankfully, congress has given Medicare beneficiaries plenty of time to prepare.
For more information regarding your Medicare benefits, give us a call. Or, you can complete our plan comparison form here to have an agent review the best Medicare Plans in your area.