Simply Money: Watch out for Medigap changes


Question. Jeff in Middletown: My friend has Medigap Plan F and he really likes the coverage. He recommended I get that plan as well, but I can’t find it among my options. Is this plan no longer available?

A: There are a couple of things to unpack here. First, let’s explain the basic concept of a Medigap policy (also known as Medicare Supplement Insurance): Since Original Medicare doesn’t cover all retirement healthcare costs such as co-payments, co-insurance, and deductibles, private insurance companies sell Medigap policies to help cover some of these expenses. According to the Kaiser Family Foundation, as of 2016, close to three in 10 Original Medicare beneficiaries (about nine million people) have a Medigap policy.

Second, yes, some things have changed in regard to certain Medigap plans. Basically, depending on your state, newly eligible Medicare beneficiaries now have two to three fewer Medigap plan options as of January 1, 2020: They can no longer buy Plan F, Plan C, or the high-deductible version of Plan F. This is because Medigap plans are no longer allowed to cover the Medicare Part B deductible, and those plans allow just that.

And, because we’ve seen some confusion around this like it sounds like you’re experiencing, we want to be explicitly clear: Plan F, Plan C, and the high-deductible Plan F are still an option – but only if someone is already enrolled in one of them (which is likely the case with your friend). For anyone who qualified for Medicare beginning this year, these three plans are not available. (Note: If you were eligible for Medicare before January 1, 2020, but had not yet enrolled, you still might be able to buy one of these three Medigap plans.)

Here’s The Simply Money Point: Your Medigap options are likely different than your friend’s, so be sure to do your research. You can compare plans at Medicare.gov. Also, keep in mind that buying a Medigap policy in conjunction with Original Medicare might not be the best approach for your Medicare strategy to begin with – perhaps a Medicare Advantage plan is a better option. A credentialed financial advisor should be able to help you make this decision. 

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