Beginning this January, Medigap plans will no longer cover the Part B deductible for those who are turning age 65. Since the deductible is only $185, it won’t be a big deal for most people.
What’s worth noting is that Plan F – the plan that covered all of Part A and Part B, including deductibles – will no longer be sold to those turning age 65 beginning January 1, 2020. Anyone who is 65 or older before that date can still apply for Plan F, but they may not want to.
Charles Paikert, writing in Financial Plannng’s September issue quoted insurance broker Stuart Millard who noted that even those who are already in Plan F, while not affected, may want to pay attention to this change. Plan G, which is nearly identical to Plan F, is still available and older clients – and they may want to switch! Why? Sarah Caine, a specialist quoted in the same piece, points out that since Plan F is being discontinued, no new clients are coming in. This means the pool of patients will diminish as people age out. Since no new people will be replenishing the risk-sharing pool, it’s possible that Plan F may not be as stable as it once was.
For those who can afford it, Medigap plans may be appealing because they’re not restricted to doctors in a network or geographic location whereas Medicare Advantage plans may not be as beneficial for people who split their time between two homes or are active travelers.
Medicare health planning is a highly specialized field. Too often people will simply shop online or deal with a jack-of-all-trades “financial advisor” who’s licensed to sell everything. In addition, many people are unaware that there is income testing for Medicare, going back two years. Those who have vested and restricted stocks, as well as those who are in COBRA plans may want to examine their situations carefully, including annual evaluation of their Part D prescription drug plan where prices change, as well as the offerings, each year.
Medicare has strict deadline rules, as well. Miss a deadline and you can lose important rights, such as Medigap’s guaranteed issue right.
As I said, this is a highly specialized area and the services of an experienced insurance broker who is a health care specialist just might save you thousands of dollars.
Note: The Independent Financial Group does not sell health insurance and Jim Lorenzen is not a health insurance broker.
Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and an ACCREDITED INVESTMENT FIDUCIARY® serving private clients since 1991. Jim is Founding Principal of The Independent Financial Group, a registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.