[EDITORIAL NOTE: Today's post is a bit wonkier than I usually publish but it is important for U.S. readers who will become eligible for Medicare in the next two years, and for current beneficiaries too. It shouldn't be hard to follow.]
Since my pancreatic cancer diagnosis three months ago, I have blessed President Lyndon B. Johnson every day for his part in creating Medicare. With the price tag for my surgery and ongoing care already into high six figures, without Medicare I would be doomed – as many old people were before Medicare.
Now, there are some changes coming to Medicare that will make it more expensive for elders while also reducing coverage. This involves changes that Congress passed in 2015 to the supplementary (or “Medigap”) coverage.
(We are talking about traditional Medicare today, not Medicare Advantage plans.)
Medicap policies pay most of the 20 percent or so of doctor and hospital costs that Parts A and B of Medicare do not cover. The choices of Medigap insurance plans are labeled by letters: A, B, C, D, F, G, K, L, M, N. As the Chicago Tribune explained the coming changes recently,
”In 2020, people who are on Medicare and don't already have what's known as Plan F or Plan C Medigap insurance won't be able to buy it because the federal government will close those plans to new participants.
“That means that when people go onto Medicare at 65, or if they switch Medicare-related insurance during the next couple of years, they are going to have to be diligent about scrutinizing insurance possibilities before some of those doors start to close.”
Plans C and F are, according to The Trib, the most popular Medigap choices for good reason. Plan F, which I chose when I signed up for Medicare in 2006,
”...is the most comprehensive. It doesn't cover dental, vision, or medicine [no Medigap plans do], but if retirees pay their monthly premiums they shouldn't have to pay anything else for doctors, tests or hospitals. Even medical care overseas is partially covered.
“In other words, at a time in life when medical issues can pop up suddenly and cost a fortune, Plan F is predictable. Plan C is popular for the same reason, although it isn't as comprehensive as Plan F.”
When Congress enacted this coming change, the goal was to save money on Medicare. So as of 2020, the Part B deductible will no longer be covered by existing Medicap policies and Plans C and F will no longer be available to new enrollees.
People currently on Plan C or F, like me, will still
”...be able to shop your coverage. If another insurance company offers it at a better price down the road, you can apply to change to that insurance company’s Plan F policy...” reports Forbes.
“However, over time we can probably expect Plan F premiums to slowly rise, since the total number of people enrolled will be shrinking annually.”
Meanwhile, it is not clear that this change will reduce Medicare costs. As Reuters reported when the legislation was passed in 2015,
”Numerous studies show that exposure to higher out-of-pocket costs results in people using fewer services, [Tricia Neuman, senior vice president and director of the Program on Medicare Policy at the Kaiser Family Foundation] says.
“If seniors forego care because of the deductible, Medicare would achieve some savings. 'The hope is people will be more sensitive to costs and go without unnecessary care,' she says.
“'But if instead, some forego medical care that they need, they may require expensive care down the road, potentially raising costs for Medicare over time.'”
There is more detailed information at all the links I've provided above.
FIRST LOOK AT NEW MEDICARE CARDS
You can be forgiven if, thanks to the
Experian Equifax data breach affecting 143 million Americans, you think this is too little too late. Also, the theft is so large, just assume you are affected.
Next year, all Medicare beneficiaries will receive new Medicare cards with a new kind of numbering system – no more Social Security numbers. Last week, Medicare released a first look at the new card:
There are all kinds of things to know about this change you can find at cms.gov.
And if you haven't done anything to secure your stolen data from being used nefariously, here is a good instruction piece from The New York Times. It will cost you $20 or $30 to set up credit freezes and fraud alerts. And here is a later report from The Times answering reader questions about the data breach.