Medicare Supplement Plan F Closes For New Entrants In 2020
Medicare Supplement Plan F will no longer be available to new enrollees in 2020. Those who are already enrolled in a Plan F may continue on this plan. Plan F has been one of the most, if not the most, popular Medicare Supplement plans since its introduction in 1990.
With the pending closure of this plan to new entrants, two key questions emerge:
- If you are not on a Plan F today but would consider enrolling in Plan F, should you do so now?
- If you are already on Plan F and are happy with it, should you consider moving to a different plan, and when should you do so?
The Death Spiral
Actuaries tell us that over the long haul, insurance claims become very predictable.
When a plan closes to new entrants, we almost always see an increase in claims experience. Without a steady inflow of younger (usually healthier) people, the risk pool will get older and less healthy. This drives premiums up. As premiums increase, those whose health is good enough to allow them to pass underwriting and move to a more affordable plan generally do so, leaving the risk pool even less healthy, and driving premiums up at an even faster rate.
This is what we often refer to as “The Death Spiral”. You want to avoid this.
Washington State has a consumer protection law that allows anyone on a Plan B or greater to switch carriers and/or plans at any time without underwriting or waiting periods for pre-existing conditions. This means if you get a rate increase anytime in the year, or become unhappy with the plan or insurer in any way, give us a call and we can help you shop plans.
If Plan F is the right plan for you at this time and assuming that the mobility rule remains in place, there is no reason to change at this time.
While we still have a number of people who choose to enroll in Plan F, we are also seeing a many of our customers choose Plan G over Plan F. The benefits are similar and the rates are often (but not always) lower. The point to remember is: there are other good options available and they should continue to be available into the future. There is no need to panic, but it never hurts to plan ahead!
Each state has its own rules pertaining to underwriting and mobility between plans. Most are not as strong as Washington State’s. Because you may run the risk of getting stuck in a Plan which is likely to experience significant rate increases in the future, we would not suggest moving into Plan F at this time. Even if your current health is excellent, these conditions can change. You would be wise to avoid being trapped in a plan moving forward.
Keep in mind everyone’s situation is different, and there is no single answer that fits everyone. Please reach out to a trusted resource who can help you sort through your options. VibrantUSA has licensed agents in many states and access to professionals in several more. Even if we cannot represent you, we are always happy to help you understand your options and find the local resources you need. There is no charge for our services. Contact us today!
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