FYI: The so-called Cadillac of Medicare-related insurance is being phased out at year’s end, shutting Medicare newcomers out of the plan that many retirees buy for peace of mind, and potentially boosting costs for those who remain or turn to another popular option.
People who turn 65 after 2019 won’t be allowed to pick Medigap supplement Plan F, the most popular supplemental plan that helps retirees cover medical costs that Medicare doesn’t pay. Retirees already in Plan F by year’s end will be allowed to stay. Almost 60% of the 14 million people who have Medicare supplement insurance are in Plan F, according to CSG Actuarial research.
Regards,
Ted
https://www.barrons.com/articles/medigap-plan-f-will-soon-end-heres-how-that-changes-retirees-costs-51571393701?mod=past_editions
Comments
The article says that the only difference between Plans F and G is that in the latter, "People must pay Medicare’s deductible before insurance coverage kicks in each year." There's also another difference. In 2019, only Plan F offered a high deductible option. Going forward, only Plan G will have that option.
It says that Plan G will become more expensive as "the pool of people coming into the plan will start becoming less healthy than those who previously enrolled when financial advisors pointed them toward a bargain." Is it really suggesting that financial advisors have been committing malpractice by steering sick people away from the better bargain (Plan G)? The article said that Plan G was the better deal (independent of health) because the all in cost (premiums plus part B deductible) was less than Part F's.
What will happen is not so much that Plan G premiums will rise, but that Plan F premiums will. That's for two reasons. One is that its pool of people will get older (thus more costly to cover). This year, anyone age 65 or above (i.e. virtually all potential enrollees) can buy Plan F. Next year, you'll have to be 66 or better to buy Plan F. Then 67, 68, and eventually all the potential participants will die out.
Which leads to the second reason. The pool will grow smaller. The idea of insurance is that while you never know who will need care, you know with near certainty what the average cost will be. But as the pool shrinks, that certainty fades. Insurers have to prepare for an increasingly likely black swan event. That means rising premiums for Plan F.
Medical underwriting: If you live in a state like New York or Massachusetts, you can buy any Medigap policy at any time, no questions asked. Or if you live in a state like California, once a year you have the option of "downgrading" your policy. So you could easily switch from Plan F to Plan G some time in the future once Plan F's premiums starting rising quickly. It pays to know what the rules are for your personal situation.
https://www.medicareresources.org/states/
I don't know about the rest of the country, but for now here in NY state the costs are very reasonable for the Medicare Advantage plans. Some are even no-cost (I guess that is extremely reasonable
https://www.aarpmedicareplans.com/alphadms/ovdms10g/groups/ov/@ov/@highrespdf/documents/highrespdf/4611547.pdf
It has another plus: unlike other UHC plans, you're not paying for the AARP branding. (The UHC PPO plans, unlike the HMO plans, are not "endorsed" by AARP). UHC has its own "Renew Active" program rather than Silver Sneakers, which may be better or worse for you (or you may not care).
Downstate the PPO network was very narrow. But in 2020 UHC nearly quadrupled the regional size of the network (making it comparable to its HMO network). People I know are now looking at this plan, hence my familiarity with it.