On April 16, 2015, the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) was signed into law.  As part of this legislation, MACRA will prohibit the sale of Medicare Supplement policies that cover Part B deductibles to “newly eligible” Medicare beneficiaries, effective January 1, 2020.  “Newly eligible” beneficiaries are defined as individuals who: 1) have attained age 65 on or after January 1, 2020; or 2) first become eligible for Medicare due to age, disability or end-stage renal disease, on or after January 1, 2020.  Plans currently covering Part B deductibles include C, F, and High Deductible F.  After January 1, 2020, these plans will be referred to as Plan D, G, and High Deductible G respectively.

The NAIC’s Senior Issues Task Force has established a Medigap Subgroup to review changes specific to Medicare Supplement insurance, and to develop consumer guides and training material based on those changes.  The Medicare Subgroup has developed an implementation guide, including a chart for recommended timelines of adoption and FAQs on the revisions.  We recommend reviewing the implementation guide in detail, and have highlighted sections of the FAQ below:

12. Do waiver states have to adopt these changes? Yes, waiver states (MA, MN and WI) must adopt these changes so that their Medigap rules conform to federal law.

16. Why are plans “redesignated” for only “newly eligible” Medicare beneficiaries? The only difference between Plans C and F and Plans D and G is the coverage of the Part B deductible under Plans C and F. All other benefits are exactly the same for D and G. Since Plans C and F will no longer be available for “newly eligible” beneficiaries, it was necessary to redesginate Plans C and F as Plans D and G for these individuals.

17. How are enrollees in current Plans C and F affected by these changes? Current enrollees (those eligible for Medicare PRIOR to January 1, 2020) can continue with their Plan C or Plan F and may continue to buy Plans C and F beyond January 1, 2020. Current enrollees will also be able to buy the new Plan G High Deductible plan on or after January 1, 2020.

18. What changes are made to High Deductible Plan options? Since Plan F High Deductible cannot be sold to those “newly eligible” Medicare beneficiaries, a new Plan G High Deductible is created.

19. When can the new High Deductible Plan G be sold and who can buy it? Plan G High Deductible can be made available beginning on January 1, 2020; “newly eligible” Medicare beneficiaries and current beneficiaries would be able to buy the new Plan G High Deductible.

20. For high deductible plans, does payment of the Part B deductible count towards the plan deductible? For Plan G High Deductible; while the Part B deductible is not covered (reimbursed), in most situations, it does count towards the High Deductible plan’s deductible. If, in the rare circumstance the Plan G’s High Deductible is met with all Part A expenses and Part B Deductible expenses are then incurred, these expenses will not count towards meeting the High Deductible nor be covered expenses. For enrollees in the Plan F High Deductible Plan, the Part B expenses will continue to be covered.

23. How does this change the way Plans C or F, and D or G, may be sold in the state? Insurers would continue to sell Plans C or F to current Medicare Eligibles on a guaranteed issue basis. However, “newly eligible” Medicare beneficiaries cannot apply for or purchase Plan C or F. The “newly eligible” would be offered Plans D or G on a guaranteed issue basis instead. All other currently available plans may continue to be offered to all Medicare Eligible.

See all of the implementation materials for revisions to the Medigap model here, including the implementation guide, new plan charts for 2020, and a timeline.

We will continue to monitor Medigap Revisions in 2020, and will provide updates as they become available.