A Big Change to a Popular Medicare Option Might Increase Your Costs

Doctor using scope to look inside man's ear.
Photo by Andrey_Popov / Shutterstock.com

Two popular Medicare supplemental insurance plans will be closed to new enrollees after next year.

This change can affect the options and potentially the costs of any senior who has Original Medicare, or intends to enroll in or switch to it.

What is Medicare supplement insurance?

A “Medicare supplement insurance,” or “Medigap,” policy supplements your Medicare health insurance. It covers some of the costs that your Medicare policy does not cover.

Private insurance companies sell Medigap policies. They are not available to all Medicare enrollees, however. Only seniors who have or are switching to Original Medicare can buy a Medigap plan.

As we detail in “7 Things You Need to Know About Medicare,” there are two main types of Medicare policies: Original Medicare and Medicare Advantage.

So, seniors who have or are switching to Medicare Advantage cannot buy a Medigap plan and thus are not affected by changes to Medigap plans.

What exactly is changing with Medigap plans?

As we explain in “The ABCs of Selecting a Medicare Supplement Plan,” there are currently 10 Medigap plans, each labeled with letters from “A” to “N.”

The official Medicare website, Medicare.gov, offers a chart that explains what benefits are included with each plan.

Medigap Plan C and Plan F will no longer be available to new Medicare enrollees after next year, however. Kiplinger reports that this change stems from a 2015 federal law that prohibits the sale of Medigap plans that cover what’s known as the Medicare Part B deductible to new Medicare enrollees starting in 2020.

As you can see from the Medicare.gov chart, Medigap Plan C and Plan F are the only two Medigap plans that cover the Part B deductible. That means that in the future, new enrollees will not be able to enroll in any plans that cover the Part B deductible.

According to a 2015 analysis by the nonprofit Kaiser Family Foundation, Medigap Plan C and Plan F are the two most popular Medigap plans, with 53 percent of Medigap enrollees having one of those two plans.

Seniors who already have Medigap Plan C or Plan F will be able to stick with the policy, but Kiplinger advises that they watch out for future premium hikes. The risk pool for these plans will age faster once the plans stop accepting new enrollees.

What it means for you

This change is perhaps most important for new Medicare enrollees because the Medigap plan you choose upon first enrolling in Medicare is a key decision.

Medicare.gov notes that standardized Medigap policies are guaranteed to be renewable even if you have health problems. So, as long as you continue paying the premium, the insurer cannot cancel your Medigap policy.

This makes it risky to switch Medigap policies, which is why it’s so important to choose the right Medigap policy upon first enrolling in Medicare.

Kiplinger explains:

“Medigap insurers in most states can reject you for coverage or charge more because of preexisting conditions if more than six months have passed after you signed up for [Medicare] Part B (although some states may pass special consumer protections for people who currently have Plan F).”

What’s your take on this news? Sound off in comments below or on our Facebook page.

Find the right financial adviser

Finding a financial adviser you can trust doesn't have to be hard. A great place to start is with SmartAsset's free financial adviser matching tool, which connects you with up to three qualified financial advisers in five minutes. Each adviser is vetted by SmartAsset and is legally required to act in your best interests.

If you're ready to be matched with local advisers who will help you reach your financial goals, get started now.

Read Next
7 Social Security Blunders That Can Ruin Your Retirement
7 Social Security Blunders That Can Ruin Your Retirement

Making even one of these mistakes can easily cost you tens of thousands of dollars.

33 Home Upgrades That Cost Less Than $100
33 Home Upgrades That Cost Less Than $100

A little money goes a long way with these imaginative projects. You can do most of them yourself.

Want a Healthy Retirement? Turn This Device Off
Want a Healthy Retirement? Turn This Device Off

A common behavior becomes increasingly dangerous for those who are 50 or older.

5 Ways Retirees Can Lower Their Income Taxes
5 Ways Retirees Can Lower Their Income Taxes

Here’s how to keep Uncle Sam’s mitts away from your nest egg.

3 Costly Social Security Mistakes That Women Make
3 Costly Social Security Mistakes That Women Make

Women face unique challenges when planning for retirement and making these mistakes can result in a skimpier retirement.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
Will I Get My Ex-Husband’s Social Security When He Dies?
Will I Get My Ex-Husband’s Social Security When He Dies?

Two factors determine how much money is coming to you.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

21 Things You Should Always Buy at a Dollar Store
21 Things You Should Always Buy at a Dollar Store

Dollar stores have great bargains on these familiar purchases. Yes, even pregnancy tests.

13 Brilliant Bulk-Buy Items on Amazon
13 Brilliant Bulk-Buy Items on Amazon

Every household should have these products on hand. Buying them in bulk on Amazon saves you cash.

6 Reasons I Will Never Trust Suze Orman
6 Reasons I Will Never Trust Suze Orman

Beware: The self-proclaimed personal finance expert has a track record that suggests more sizzle than steak.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

Getting These 2 Shots Could Reduce Your Risk of Dementia
Getting These 2 Shots Could Reduce Your Risk of Dementia

These vaccines may lower the risk of Alzheimer’s disease by up to 40%.

8 Deep Discounts Available on Amazon This Friday
8 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

16 Amazon Purchases That We Are Loving Right Now
16 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

19 Purchases That Buyers Almost Always Regret
19 Purchases That Buyers Almost Always Regret

Think twice before buying these things.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

Homeowners Say These 2 Kitchen Appliance Brands Are Best
Homeowners Say These 2 Kitchen Appliance Brands Are Best

One brand takes five of the top honors, while another ranks highest in three categories.

Is a Second Stimulus Check Still Coming?
Is a Second Stimulus Check Still Coming?

The status of another round of direct payments to taxpayers is a mix of good and bad news.

41 Things You Should Never Buy
41 Things You Should Never Buy

Some purchases are just plain dumb. Give yourself — and your budget — a break. Don’t spend money on this stuff.

9 Indestructible Products That Are Worth the Price
9 Indestructible Products That Are Worth the Price

If you’re willing to pay a little more for these products, you may never have to shop for another again.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

8 Ways to Slash Your Internet Bill
8 Ways to Slash Your Internet Bill

No matter what price you are paying for internet service, taking these simple steps can lower it.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.