Among all the changes coming to Medicare Supplement plans and Medicare Part D, Medicare costs will also be changing in 2020. In 2020, the Medicare Part A premium will be $458, however, many people qualify for premium-free Medicare Part A. The Medicare Part B premium will increase to $144.60, and the Part B deductible will rise to $198 in 2020.
Why are Changes Coming to Medicare in 2020?
Whether Medicare has been your health care plan for many years, or you expect to be eligible for Medicare on or after January 1, 2020, the changes coming to Medicare Supplement plans and the Donut Hole may affect you. Legislation established these changes in 2015 to try and reduce unnecessary costs to Medicare and eliminate the gap in Medicare Part D prescription drug coverage.
To try to reduce costs to Medicare, people entering the program on or after January 1, 2020, will not be allowed to pick up Medicare Supplement plans that cover the Medicare Part B deductible. Medicare Part B covers your outpatient services, like your annual wellness exam at your doctor’s office. Lawmakers believe that making people responsible for paying a small deductible ($198 in 2020) will encourage them to only visit the doctor when necessary, thereby saving Medicare money.
The gap in Medicare Part D drug plans is often referred to as the “Donut Hole.” The Donut Hole varies in size depending on the plan, but the high out-of-pocket costs negatively affect enrollees that entered it.
What is Medicare Supplement Insurance?
A Medicare Supplement plan, also referred to as Medigap plan, is an insurance policy sold by a private company. Medicare coverage alone will usually only pay up to 80% of approved costs, and a Medicare Supplement plan can protect you from being responsible for the remainder of the bill.
Medigap policies are guaranteed renewable no matter what your health situation is. As long as you pay your premium, the company cannot cancel your policy. Your premium will vary on several factors, such as which plan and company you select, your age, and where you live.
Medicare Supplement plans are categorized by letter and range in coverage. Each plan will offer varying amounts of protection for costs, such as the 20% that Medicare does not pay, copays, deductibles, and emergency foreign travel.
Which Medicare Supplement Plans Won’t be Offered in 2020?
Medicare Supplement Plan F, Medicare Supplement Plan F High-Deductible, and Medicare Supplement Plan C will not be offered to anyone who was not eligible for Medicare before January 1, 2020. These plans are being restricted because they cover the Medicare Part B deductible.
Can I Keep My Medicare Supplement Plan F, Plan F High-Deductible, or Plan C?
The good news is that if you enrolled in Medicare Part A by December 31, 2019, and have a Medicare Supplement Plan F, Plan F High-Deductible, or Plan C, you can keep it. You can even apply for those plans in the future as long as you were eligible by the cut-off date. For example, if you receive a notice that your premium for Plan F is being increased, you’ll still be able to shop for a Plan F from a different company with a lower rate.
You can check your eligibility by looking at the Medicare Part A start date on your Medicare card. If your Medicare Part A began before the cut-off date, you will be eligible to apply for Plan F, Plan F High-Deductible, or Plan C even after 2020.
Which Medicare Supplement Plan Offers the Most Coverage to People Who Become Eligible on or After January 1, 2020?
While none of the plans available to you will cover the Part B deductible, you’ll still be able to apply for one of the most popular plans. Medicare Supplement Plan G is very similar to the full coverage Plan F, with the exception that you pay the $198 Part B deductible. After you pay the deductible, you won’t have any out-of-pocket costs for your Medicare-approved services.
What is the High-Deductible Plan G in 2020?
In 2020 Medicare Supplement Plan G High-Deductible is being introduced. If you select this plan, Medicare will cover its portion, and you will pay your out-of-pocket costs (normally 20% of the bill) until you have paid the deductible amount. In 2020, the high deductible amount is $2,340. Once you have reached $2,340, your Medicare Supplement plan will pay the remainder of the costs for your Medicare-approved treatment. Because of the potential for high out-of-pocket costs, premiums for this plan are typically much less expensive than for Plan G. Plan G High-Deductible may be a good choice for you if:
Am I eligible for High Deductible Plan G?
Unlike Plan F High-Deductible, you can apply for Medicare Supplement Plan G High-Deductible regardless of when you became eligible for Medicare. You’ll need to follow the same rules of application as with any other plan. For instance, if you currently have a Medicare Supplement plan, you can apply to change to Plan G High-Deductible at any time of the year. However, if you have a Medicare Advantage plan, you’ll have to wait until the Annual Election Period, Medicare Advantage Disenrollment Period, or another special election period to apply.
What is Happening to the Donut Hole in 2020?
In addition to Medicare Supplement Plan F, Plan F High-Deductible, and Plan C being restricted, Medicare Part D Donut Hole coverage is changing. The “Donut Hole” is the nickname given to the part of your Part D plan in which your costs are the highest. As the Donut Hole closes, the percentage that you pay in the coverage gap will decrease.
If you’re in the Donut Hole, you will now get a discount on your brand-name drugs and additional savings on your generic and brand-name drugs until it’s officially closed in 2020. Manufacturers will continue paying large percentages of the drug, while Medicare drug plans will increase the amount they cover.
Currently, Medicare pays 56% of the price of your generic drugs while you’re in the Donut Hole. You’re responsible for the remaining 44%. In 2020, the number you will be responsible for is only 25% of the cost. This results in a huge saving for Part D beneficiaries in the Donut Hole.
If you’re unsure if your prescriptions will be covered at this new discount, you should contact your drug plan or pharmacist. Ask if your current medications will receive a discount while in the Donut Hole. In 2020, Part D will cover your brand-name drug if a company that is participating in the Medicare Coverage Gap Discount Program makes the drug. This is the program that provides these discounts and aid once you’re in the Donut Hole, or coverage gap. If the company does not participate in the program, Part D won’t cover your medication at all.
By 2020, you will not pay any more than 25% for a covered brand-name drug or prescription drug during the coverage gap. This 25% is the same percentage you’ll pay once you meet your plan’s deductible. This is until you meet the out-of-pocket spending limit. These changes will result in more savings for you, the Part D beneficiary, as you will have to pay less than your plan pays.
For more information about Medicare and changes in 2020, we highly recommend you visit Medicare.gov HERE.
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