Potential Dramatic Changes for Medicare Products Offered in the Future

There are potential dramatic changes for Medicare Products offered in the future. CMS continues to look for ways to lower the cost of Medicare and to require Medicare Beneficiaries to pay more out of pocket expenses. Remember, some 78 million baby boomers will turn 65 in the next six years. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was passed on March 26, 2015 which prohibits Medicare eligible consumers from buying a Medicare Supplement that covers the Part B deductible on or after January 1st, 2020. Currently, the Medicare Part B deductible is $166.00 and is changed annually by CMS. The plans that cover the Medicare Part B deductible include Plans C and F, with Plan F being the most popular plan in the country. For the past few years, Plan G (basically Plan F without covering the Part B deductible) has become the most popular plan in our agency. After 2020, Plan G or possibly Plan N will take the mantle as the best in class plan.

Folks who already have Plan F will be “grandfathered” and will not lose coverage, as well as those who become eligible for Medicare in the next four years. While many things can change in the next four years – a new President, Congress, and possible resistance by the National Association of Insurance Commissioners – this is the first of many future attempts by the government to transfer more risk to the consumer. Medicare continues to be the most important social benefit, and over 50 million Americans are now covered. With a deluge of new Medicare Beneficiaries, and out of control prescription drug costs, we look for more changes to come.

Plan F is an important risk transfer policy for many, but so is Plans G and N. In fact, we expect that Plan N which requires the consumer to pay their $166.00 Part B deductible and then a $20 copayment per office visit to become very popular and competitively priced over the next five years. Most folks who retire today are accustomed to employer deductibles of $1,500 to $2,000 and an out of pocket limit of $6,000 annually. Purchasing a Plan N which has very nominal risk seems appropriate and cost effective.

As insurance brokers who help hundreds of Medicare Beneficiaries every year, we will keep you abreast of any future changes to Medicare and Supplemental or Medicare Advantage plans. Don’t worry about losing your current Plan F – you will be able to keep it- but for Medicare Beneficiaries who are retiring in the next four years, we ask you to consider Plans G and N.

Burman S. Clark

Burman S. Clark, RHU, CSA is the President of Muneris Benefits and a licensed insurance broker and consultant. His independent practice and focuses on employee benefits, individual life, disability, medical, and senior products. Burman has traveled extensively and provided guidance to large employer associations with regards to the Affordable Care Act.