MACRA: How does it impact you?
Why can’t I buy Plan F anymore?
MACRA made a HUGE change. People who are first starting Medicare cannot buy a Medicare supplement that covers their Part B deductible for them anymore. This includes the most popular Medicare supplement which is Plan F.
That’s right.
Anyone starting Medicare in 2020 or later cannot buy the most popular Medicare supplement.
So what can you do?
The good news is there are some very comprehensive options still available to you. And even before 2020, Plan G was growing faster than Plan F was. This is mainly because plan G has long been a better value for people to buy.
The only difference between Plan G and Plan F is who pays the Medicare part B deductible.
I know that sounds like some kind of alphabet soup game so stick with me.
The Medicare part B deductible is $203 in 2021. If you have a Plan F, the insurance company pays that $203 for you. If you have a Plan G, you pay the $203 yourself. After that deductible is paid, the plans work in an identical way.
So the only difference is who pays $203.
And for many years, insurance companies were charging people an extra $500 each year in premium so that they would pay an extra $203 for them. That doesn’t sound like a good option for you financially.
What’s no longer available?
The MACRA law mean that after January 2020, zero-deductible Medigap/Medicare supplements are no longer available to people NEW to Medicare.
So if you were eligible for Medicare before 2020, this has no impact on you.
But if you are just starting, it means you cannot buy:
- Medicare supplements Plan F, C, or the high deductible F
- Medicare Part B deductible rider in states like Wisconsin
Why did MACRA pass? What are they trying to do?
There were several goals of MACRA, including:
- Reduce Medicare spending
- Increase accountability for healthcare facilities
- Encouraging high quality care
- Discouraging unnecessary doctor visits
The tried to accomplish these goals using several different methods. One of which is getting rid of plans that cover all the deductibles.
Their rationale was that if people have to pay something to see the doctor, they may rethink if they really need to go. So you have you pay the Medicare Part B deductible yourself each year before Medicare coverage kicks in.
They also changing the way doctors and hospitals are paid by Medicare for treating you. The new payment model encourages high quality care instead of a large quantity of care.
Other Impacts of MACRA
Two are impacts were changing the Medicare card number to a unique combination of letters and numbers for each person. It used to be your social security number plus one letter.
Obviously, that was a big security risk so this was a good move to change that format to help protect against identity theft.
IRMAA is an extra premium paid for Medicare Part B for people who have a higher income. There used to be 5 income brackets. MACRA increased that to 6 income brackets.
Final thoughts about Plan F
If you have a plan F now, you can keep it as long as you want. You can also buy a new Plan F from a different company if you want.
But if you are just starting Medicare now, the most comprehensive option you can get is Plan G. This may even be a better option than Plan F so it’s not all bad news for you.
To see what options for you in a transparent way, just reach out to Medicare Mike for help. My services are free because I’m compensated by the insurance company you choose to work with.