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Regulators polish the proposed Medigap Plan G

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A panel at the National Association of Insurance Commissioners (NAIC) seems to be close to finishing the current round of work on a proposal for replacing the popular Medicare supplement (Medigap) Plan F.

The Medigap Subgroup, part of the Senior Issues Task Force, has been designing an alternative, Medigap Plan G, since October. Subgroup members have been looking for mistakes and vague wording in a draft Plan G coverage outline and a Medigap plan benefit summary chart that includes the Plan G option.

See also: NAIC task force creates Medigap subgroup

During a conference call meeting on Feb. 8, subgroup members focused on correcting grammatical errors and improving the formatting, according to a copy of the meeting minutes posted on the subgroup’s section of the NAIC website.

Traditional Medicare includes a deductible, coinsurance requirements, and other coverage gaps. Insurers developed many different types of Medigap products to fill the gaps. In an effort to help consumers compare Medigap plans on an apples-to-apples basis, Congress put a standardization provision in the Omnibus Budget Reconciliation Act of 1990. The provision requires issuers to base Medigap plans on standard “letter plan” designs.

Medigap Plan F, which fills all of the Medicare coverage gaps, has been the most popular letter plan. In 2014, the ordinary Plan F and a high-deductible version of Plan F accounted for 56 percent of all Medigap coverage enrollment, according to America’s Health Insurance Plans (AHIP). However, AHIP did not report how many people had no-deductible Plan F coverage.

Some Medicare officials and other policymakers say Plan F fills traditional Medicare gaps so well, it drives up Medicare costs by encouraging the policyholders to get unnecessary care.

See also: Consumer reps: Medigap is not the bad guy

Congress responded to that criticism by putting a provision blocking Medigap plans from paying the traditional Medicare deductible in the bill in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The 2016 Medicare Plan B deductible is $166 per year.

Under the current MACRA implementation rules, consumers who already have Plan F coverage, or buy it before Jan. 1, 2020, can keep their Plan F coverage. The Plan F coverage will continue to pay those policyholders’ Medicare deductibles.

Consumers who buy Medigap on or after Jan. 1, 2020, may have to buy some other type of Medigap coverage.

The subgroup is also working on a replacement for another, less popular Medigap letter plan that pays the Medicare deductible, Plan C.

Members of the Medigap Subgroup have agreed to use the Plan D and Plan F designations to refer to the old plans that still pay the Medicare deductible.

To keep consumers from confusing the new, non-deductible-paying plans with the old plans, the subgroup has proposed referring to the non-deductible version of Plan C as Plan D, and the non-deductible version of Plan F as Plan G.

Medigap issuers and sales agents often use a standard letter plan benefit chart to show consumers how the plans work. The Medigap Subgroup has developed a new version of the chart that would put Plan D and Plan G in the main part of the chart. The columns describing the old Plan C and Plan F would go in a shaded section on the right.

See also:

MA, Med Supp, and Part D: 3 Markets, Countless Challenges

AHIP: Medigap Plan N is coming on strong


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