Do You Have a Plan F or Plan C Medicare Supplement?
Today’s video is only relevant to those who have a Plan F or Plan C Medicare Supplement. Of course, to our great dismay, many people don’t even know which supplement they have but please determine that and read this material if you have a Plan F or Plan C Medicare Supplement. Please read this information carefully because whether or not you can change depends on where you live and/or who your insurer is. However, the general trend is in a direction of allowing more people to change should they wish to do so but state environments vary widely.
Many people are enrolled in a Plan F supplement. It became the richest supplement available in 2010 after the government no longer permitted new enrollments into Plan J. Of course, if you have Plans H, I and J, please look into whether you can make another choice. Those plans once had drug coverage in them so they became unavailable to new enrollees in 2010, several years after Part D first became available.
The issue is that Plan F and Plan C became unavailable to new enrollment in January 2020 unless you were already on Medicare Part A prior to that time. This is a result of rather misguided thinking on the part of Congress, in our opinion, that because Plans F and C cover the Part B deductible, currently $226, that people with these plans would overutilize medical services. As a result, in 2020 Plan G became the supplement with the richest benefits one new to Medicare could purchase.
The only difference between Plan F and Plan G is coverage of the Part B deductible. The only difference between Plan F and Plan C, which was much less popular than F, is coverage of the excess charges associated with doctors who do not accept Medicare assignment.
What is the Problem?
Generally, when an insurance product is closed to new enrollment, and new enrollment includes relatively younger and healthy individuals, premiums over time escalate at a faster pace than they otherwise would have. This is logical when you think about it. The population covered by Plans F and C is largely getting older and sicker every year.
What is the Other Problem?
The other problem, as we’ve discussed many times before, is that everyone has a six-month guaranteed issue period to buy any supplement they choose regardless of health status. After that period, in most states, insurers have the discretion to accept or deny one’s application based on health status. However, we have found that some insurers will let people move from a Plan F or C to a G without underwriting. Anyone in New York, Connecticut, Maine and Washington can change from a Plan F or C to a G at any time and with any carrier. And, more recently, some states have a “birthday rule” approach to allow covered individuals to change their supplement typically to one less comprehensive. These laws vary. In California, Maryland, Oregon, Nevada, and Idaho, you can change from Plan F or C around your birthday and to any insurer. In Illinois and Louisiana, you can change your Plan but not change carriers. In Illinois, you can only change plans between the ages of 65 to 75. Of course, if you are very healthy, you have more options since medical underwriting should not be an issue.
Remember, supplements are unusual products. They are regulated by the federal government as to benefits but state insurance departments also regulate them. They were standardized by the Federal Government in the 90’s with 47 states using the same approach and Massachusetts, Wisconsin and Minnesota adopting their distinct approaches as a result of obtaining a federal waiver.
What to Do?
You can always decide to do nothing especially if you live in a state we haven’t mentioned and have pre-existing conditions. After all, changing coverage can be disruptive. However, if you live in one of the states mentioned, you are relatively healthy, and/or you want to see if you should consider a change, we would suggest you do the math which is a brief exercise and fairly straightforward. You may have to call your insurer for premium information on Plan G. Rating methodologies vary by state. We used Connecticut in this example because rate information is on the Insurance Department website, attached below, and the number of insurers allowed to sell in Connecticut is limited.
Plan G premium times 12 + $226 (Part B deductible) versus Plan F or Plan C Premium times 12.
Plan G $228.85 x 12 = $2,746.20 + $226 = $2,972.20 (annual premium plus Part B deductible)
Plan F $298.39 x 12 = $3,580.68 (annual premium; coverage includes Part B deductible)
Plan C is not offered by Anthem
A roughly $600 difference to go from Plan F to G may not seem compelling but if two spouses are covered, it might be to some especially since the gap should increase over time and some will live for decades on Medicare. Let’s take another insurer.
Plan G $231 x 12 = $2,772 + $226 = $2,998 (annual premium plus Part B deductible)
Plan F $309.50 x 12 = $3,714 (annual premium; coverage includes Part B deductible)
Plan C $432.25 x 12 = $5,187 (annual premium, coverage includes Part B deductible but no coverage for excess charges for doctors who do not accept Medicare assignment.)
As you can see from the above, the spread in value between a Plan F and G is up to $700 a year with UnitedHealthcare. And if you have a Plan C supplement through UnitedHealthcare, it is a very bad deal for you so I hope you can change. At the same time, as I mention in the video, Connecticare, a subsidiary of Emblem Health in New York, has a relatively small premium difference between Plan F and Plan G but I wouldn’t consider them a major insurer of Medicare supplements.
Before this copy is published, more states may pass a birthday rule approach and we may have clarification on Florida, which we’ve been seeking. We’ve been tracking this issue for our ongoing clients but it is complicated AND a moving picture. At the same time, we want those who might benefit from considering a change to have this information. Thanks.