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NAIC Highlights 2020 Medigap Plan Shift Materials

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The National Association of Insurance Commissioners (NAIC) is trying to help consumers understand the coming 2020 Medicare supplement (Medigap) insurance letter plan shift.

The regulator group has posted a notice on its website about the federal Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) taking effect Jan. 1, 2020.

(Related: 5 Ways 2020 Medigap Changes Are Driving States Wild)

The notice includes links to a bulletin aimed at consumers, a consumer alert, and a bulletin aimed at agents. The materials were developed earlier this year.

Medigap Basics

Medigap policies help users of “Original Medicare” coverage pay the co-payments, deductibles and coinsurance amounts included in the Medicare Part A hospitalization plan and the Medicare Part B physician services and outpatient care plan. Issuers are supposed to build each Medigap policy around a standardized template. Federal law has assigned each template a letter.

Traditionally, Plan F policies — the policies with the richest benefits — have been the most popular.


Members of Congress put the Medigap letter plan changes in MACRA because of concerns that some Medigap policies have been too generous, and have been encouraging policyholders to get too much health care.

MACRA includes a provision that prohibits the sale of new Medigap policies that pay the Medicare Part B deductible. In 2020, the Medicare Part B deductible will be $198.

In practice, the MACRA provision has required insurers to end sales of Medigap plans C, F and F High Deductible starting Jan. 1, 2020.

Insurers are replacing those plans with new plans D, G and G High Deductible that make the policyholder responsible for the Medicare Part B deductible.

Under MACRA, consumers who already have plan C, F or F high-deductible coverage, or who buy plan C, F or F high-deductible coverage before Jan. 1, 2020, can keep that coverage, NAIC officials say in the agent alert.

The old letter plans can also still be sold to anyone who became eligible for those plans before 2020, such as people who put off applying for Medicare Part B coverage because they were still working or people who have a retroactive disability claim.

The Agent Alert

“Some agents are telling their policyholders that premiums for coverage under Plans C or F will be increasing to such an extent that they should purchase other coverage,” NAIC officials say in the agent alert.

“These are misleading statements to induce policyholders to improperly switch coverage using marketing and sales techniques that are in clear violation of the Medicare supplement insurance laws and a states’ unfair trade practices laws,” officials say. “If a state finds such activity, the state can take appropriate administrative action.”

Clarification: The original version of this article gave an incomplete explanation of what will happen to C, F and F high-deductible letter plans starting Jan. 1, 2020. Some people with special circumstances will still be able to buy those plans.

— Read NAIC Task Force Creates Medigap Subgroupon ThinkAdvisor.

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