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What’s Happening to Medicare Supplement Plan F in 2020

What’s Happening to Medicare Supplement Plan F in 2020

If you currently have a Medigap plan F or considering getting one, you should be aware of a new law that went into effect in April of 2015. Some of the provisions in this law can be complex and confusing, but the one that is most important for all individuals to understand is known as section 401. This section of the law now requires that the federal government will no longer allow any eligible beneficiaries to get a Medigap policy that covers the deductible for part B. This has major implications for those individuals who might have wanted to opt in to Plan F in the future.


Plan F No Longer Available In 2020

As of January 1st, 2020, plan F will no longer be available. There is good news, however, if you currently already have a Plan F. You may be eligible to keep it in and would not be forced to move to another plan since this would only affect newly eligible beneficiaries of Medicare. Unfortunately, however, you can expect for your rates to increase. The premium rates for Plan F will increase at a rate much higher than the other plans that are not impacted by these new legal provisions. This is because each plan is individually rated associated with the cost for that specific plan.

Why Are Prices Expected To Rise?

When Plan F no longer accepts new applicants, the pool of individuals currently with an active Plan F will begin to grow older on average when compared with other plans. This means that the premiums will go up as a result of the higher proportion at claims cost. There are several things you can do as an agent in this situation selling these products. It is strongly recommended that you educate your clients about how this will impact them going forward, particularly for those individuals who are thinking about getting a new plan.

What Can Clients And Agents Consider Instead?

Medigap Plan G may be a viable alternative because it provides the same coverage except for the part B deductible of $147. The Medigap Plan G has even lower premium rates than Plan F. This could help to save significant costs on a monthly basis and the only additional exposure would be the deductible for part B. Make sure you educate yourself before speaking with clients about the plan F and its closure in 2020.

Agents can help play an important role in managing this transition by being aware of news and presenting alternative options. Those who were previously interested in opting into Plan F should also understand how signing up now could impact their interests in the future.

Insurance agents play a dual role in this situation by providing relevant information to clients and helping to present other options, where available. Many individuals will not understand the complex facets of how changes in laws impact their own lives, particularly with complicated Medicare issues. This is where the agent can help to solve problems now and well into the future.

Key Takeaways In This Article

  • Make sure to always stay educated about what's happening in the Medicare insurance industry so you can advise your client correctly.
  • This particular opportunity presents a specific dual role responsibility for agents to both educate and sell new alternatives. 

Over to You

We'd love to hear your thoughts in the comments below on:

  1. Are you advising your clients about the changes coming?
  2. Are you moving clients that are currently on Plan F healthy enough to Plan G, why or why not?
  3. Do you believe it is YOUR role to educate both previous clients and new clients about the changes?

If you have any questions, please leave a comment below. We will carefully read each one of them. Happy Selling!

About the Author Matthew King

Matthew King is a co-owner of TR King Insurance Marketing and partner at Independent Life Insurance Agent Association. When he's not creating processes, content, and developing SEO strategies, he likes to immerse in gaming with his wife and friends.