Medigap, MACRA and lower premium opportunities right now.

Even though MACRA doesn’t affect new Medicare clients until January 1, 2020, now is the perfect time to start educating your clients on the benefits of cost-sharing Medigap plans.

Clients who are considering Medigap plans are in search of three key things:  Portability, Simplicity and a Guarantee their plan won’t change.  Although for many, Medicare Advantage is a great option, some of your clients want more than a one-year promise that their plan will not change.

How about adding two more reasons to choose a Medigap plan? Lower premiums and lower premium increases overtime. Many clients may not be aware of all the benefits of Medigap plans because they haven’t taken the time to sit down with a licensed agent, which is where you come in.  Your key value is educating clients on how plans work, here are a few ideas for you.

What is MACRA?

MACRA stands for the Medicare Access and CHIP Reauthorization Act, legislation signed into law in 2015. MACRA states that anyone who is “newly eligible” for Medicare as of January 1, 2020, may not enroll in a Medigap Plan that covers the Part B deductible.

However, MACRA has introduced a small amount of cost-sharing by removing the ability to cover the Part B deductible ($197 for 2020),which in turn is leading to lower premiums in these plans.

Your clients’ options

Medigap plans are available in three design options: high deductible, low deductible and co-pay plan designs.  Cost-sharing Medigap plans may be a good choice for clients aging-in to Medicare who are younger, healthier and appreciate significant savings by sharing a percentage of costs for their health care. Medigap clients also like that they only have to reconsider the Part D choice, rather than their health insurance as their needs change.

Consider the reasons that Medigap plans have higher premiums and why they increase as the risk pool ages. In all other forms of health insurance from ACA to Small Group, we see far more control of cost control when the member engages in cost-sharing.

Minnesota, Wisconsin and Massachusetts have slightly different Medigap rules, meaning that they must still eliminate coverage for the Part B deductible in newly issued plans as of January 1, 2020. Within Minnesota, your clients will still have access to Select, Basic, and Extended Basic comprehensive options. Minnesota also has high deductible, and Plan N (copay) options you should consider as lower premium alternatives.

Remember: When you sign your clients up for a Medigap plan, ensure you have covered their need for Part D, Dental and Hospital Indemnity Plans as appropriate.

Eligibility

MACRA only applies to clients newly eligible to Medicare; remember that cost-sharing reduces premium at sign up and over time.

Newly eligible means:

  1. Attain age 65 on or after January 1, 2020
  2. First eligible for Medicare due to age, disability, or end-stage renal disease, on or after January 1, 2020

Anyone eligible for Medicare prior to January 1, 2020, may keep or even sign up for a plan that covers the Part B deductible after the January 1, 2020 MACRA effective date.  Remember: When a client signs up for a Medigap plan their benefits cannot be taken away as long as they keep paying their premiums.

WARNING – Since pre-MACRA plans will remain available for those clients who are already eligible for Medicare, agents must be careful to NOT accidentally enroll any newly-eligible clients into a pre-MACRA plan in 2020. This could be a compliance breach leaving you vulnerable to a fine, licensing issues or imprisonment. Using your carrier portals should take away this risk.

If you would like to discuss Medigap options in your area contact either LaRae Mills or Weston Peterson on LeClair Group’s Medicare team.