The following article appeared in Gulf Coast Woman Magazine November /December 2017
Legal disclaimer: This information is not considered legal advice, nor does it form an attorney-client relationship. It is merely to inform of situations that I’ve either personally encountered or become aware of through clients.
Medicare is the governmental health insurance program, which, from 1966, has been a single-payer, national social insurance program providing coverage for most Americans of retirement age, disabled and other groups. It has been estimated that Medicare spending accounts for about 15 to 16 percent of the total U.S. federal spending. On average, Medicare covers about half of the healthcare charges for those enrolled, with the remaining costs either paid out of the individual’s pocket or with supplemental insurance — sometimes called Medigap policies. While campaigning, most politicians have promised to “not cut Medicare.” There are many ways, however, that these politicians may alter Medicare’s guaranteed benefits while arguing that they have not “cut” Medicare. One such way is by altering the Medicare plans that are available.
ALTERING THE MEDICARE PLANS AVAILABLE
Initially, Medicare provided Part A, which covers hospital stays, and Part B (which requires a premium to be paid by the enrollee) to cover other medical costs such as doctor visits, outpatient procedures, and medical equipment. Later, Medicare Part D was added (which also requires a premium to be paid), to cover many self-administered prescription drugs.
Medicare Part C was added to include individually purchased private Medicare Advantage plans, or so-called Medigap insurance plans, which supplement Parts A, B and D. In general, these plans may offer lower premiums and reduce the 20 percent co-pays and deductibles associated with original Medicare Part A, B and D; but, the services covered may be more limited than what you would receive under traditional Medicare Part A, B or D.
Medicare Plan F was developed as a Medicare supplement insurance plan to cover costs known as Medicare Part B excess charges (Please note that Plan F does not cover dental, vision, or prescription medicine, and so enrollees are still responsible for paying those costs out of pocket.). The excess charge is the difference between what a doctor or provider charges and the amount Medicare will pay. Plan F provides “first dollar” coverage for all the “gaps,” meaning that from the first day, Medigap Plan F covers the 20 percent co-pay and your hospital and outpatient deductibles. So, this plan would provide zero “out-of-pocket” expenses for the enrollee at the doctor’s office at the time of service for the services covered. (Note that services covered may be more limited than under traditional Medicare Parts A, B and D).
It is reported that about 53 percent of people who buy Medigap supplements choose Plan F or Plan C. Plan F is the most popular of the many Medigap insurance plans because it is the most comprehensive.
In 2020, however, the government plans to close Plan F and Plan C to new participants. If you are not already on Plan F or Plan C by 2020, you will not be able to buy it. On the other hand, if you are already on Plan F or Plan C when 2020 rolls around, then you won’t be kicked off your coverage. You’ll be grandfathered into the plan if you choose to keep that plan past 2020.
People eligible for Medicare after 2020 will not have this same right, but they can enroll in Medigap Plans D or G going forward. Plan G will be created as a new high-deductible plan and made available for both newly eligible enrollees and previously eligible applicants who select it.
Obviously, under such a plan, it will be necessary for the retirees to have financial resources available to cover “out-of-pocket,” the high deductibles before Medicare will provide coverage. Therefore, it appears that if you are not grandfathered in before 2020, you will not have access to Plan F that was previously available to help with the predictability and controllability of your medical expenses by paying a set premium to cover the deductible and co-pay amounts.
Altering the Medicare plans available may be the same as an invisible benefit reduction to people who do not read the fine print. Frankly, my dear, you should read the fine print.
Kathy Brown van Zutphen is an attorney licensed to practice law in Alabama and Mississippi. She focuses on the “elder law” areas of trusts, estates, and conservatorships. Additionally, she litigates lawsuits and represents small business owners as part of her legal practice. You can also reach her at her office: (228) 357-5227.