TIn 2016, then President Obama signed the "Medicare Access Act". The informal term for the new law has been coined as the "Doc Fix", as the majority of the legislation corrected what was perceived as inequities in the annual reimbursement rates for medical procedures.

For Medicare Supplement Customers, however, the most important aspect is how the grandfathering of Plan F barely survived the final draft. Many in Congress have now stated all Medicare Beneficiaries should share in the cost cutting. More simply, everyone who was under age 65 beginning on Jan 1, 2020 will not be allowed to enroll in a Medigap Plan F.  Instead, the most "benefit-rich" plan they will be eligible for is a Plan G, which has the Part B annual deductible, which is $204 in 2021 and should have the usual 2% - 3% inflation adjustment in 2022. The exact amount will be announced in November of 2021. 

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Many Sun City Residents are naturally confused. In 2020, they will hear reputable Media Reports that their Plan F has ended?They then ask their Customer Service Department at their existing Medicare Supplement Insurance Company, or even The Governmental Department of Medicare (CMS) for a clarification. That Customer Service Rep, or Medicare Rep typically responds by saying that the law has now been changed that any Medicare Beneficiary over the 65, as of Jan 1, 2020 is grand-fathered into the Plan F or Plan C, although Plan G or Plan N might be a better, cost-savings alternative for everyone, regardless of age . 

Many Customer Service Representatives  are also not aware that IL does not allow any 15% excess charge on Medicare Part B. As a result, many Medicare Beneficiaries are now choosing the Plan D since the premium is reduced for this extra potential expense, yet that expense (that 15% excess charge) is again, not allowable in IL. We will happy to provide you with a no-cost, no-obligation premium ranking report for Plan D from all the insurance companies who have legally registered their Plan D with the Springfield, IL Insurance Department (IDFPR).   

Ellen Muradian, RN and Scott Slagle, offer several ways to simplify and explain why Plan F is now no longer offered to those who under age 67 in 2021. Most Sun City Residents prefer a quick chat in the comfort of their home, at their familiar kitchen or dining room table. For those who prefer to meet outside of their home, Ellen can meet you in the Prairie View "Reading Room" for an explanation and to answer your questions. Click HERE to bring up the Congress.Gov web site which shows the 100+ page of the law. Next, call us at (224)717-1000 so that we can guide you to the exact page with the "End of Plan F" language. actual language.

We will also help you examine the horizon of pending and probable legislation which may retroactively nullify any grand-fathering provisions of Plan F. As an example, there has been congressional debate that in the targeted year of 2025, Medigap Plans C and F will be removed for all ages (similar to how Plan J was removed in 2011), but with Plan G being available as alternative choice, naturally with a guaranteed issue provision. Again, the spirit of these law changes is that Congress believes that Medicare Beneficaries should be subject to the Part B deductible, which is forecasted to be in the low $200 per month range in 2022.

At our free informational seminars, entitled "2022 Medicare Plan Choices", we will also give an update on Medicare Advantage plans (with particulars for Kane vs. McHenry county), including a quick "look-up" of your Doctors and Specialists in order to determine which PPO's or HMO/POS's your Primary Care Physician may have signed a Part C contract with.  

We will also hand out calculations which will quickly and easily show you an accurate-as-possible forecast of how much premium you will pay for your Plan F over the years, or any of the other 9 standardized plans, as seen in your  'Medicare and You' booklet from CMS (Centers for Medicare). We have painstakingly added up all the Plan F premiums for the largest Plan F in IL, from age 90* down to your current age. This chart will help you anticipate your total lifetime Plan F premiums. You may also be interested in comparing Medicare Advantage (Part C) to your Medicare Supplement + Drug Plan. 

As an example, if a 65 year old Medicare Beneficiary decided on the "no out-of-pocket" Plan F, from the largest Medicare Supplement Company in IL, their premiums would be just under $2,000 per year. However, if we ignore medical inflation (or assume that our investments will generate the same returns), and just add up the premiums-by-year for each birthday, their total premiums will be $82,000, based on the currently filed and approved premiums for 2020, with typical 7% - 9% annual premium increases. For the past two decades, Medigap has been increasing well above standard inflation..

We are often asked what would be a likely financial result if a Beneficiary were to forgo a Medicare Supplement, opting to pay their Part A co-pay of $1,484 (in 2021) for an in-patient hospitalization, or all their 20% Part B co-pays, plus their (2021) $204 annual deductible. The other premium saving choice would be Medicare Advantage, which usually has a similar maximum-out-of-pocket range. A zero monthly premium Part C does offer an annual stop-loss (typically up to $3,400 as mandated by CMS) for a HMO, and a slightly higher stop loss (typically up to $6,700) when going out-of-network with a PPO.

The biggest challenge of course in predicting out-of-pocket costs for a Medicare Advantage, or even in having no supplemental plan at all (just voluntarily paying all the Part A and Part B copays), is in assuming utilization: In-Patient vs. Out-Patient, Specialists visits and procedures, Part B Drugs (as opposed Part D on-going prescriptions), etc.

The closest we can usually come is to use the average "lifetime" of 3 in-patient (when already over age 65) hospitalizations at $1,288** for each stay, plus many typical expenses for Part B. Even if we use $3,864 for 3 copays for in-patient hospitalizations and $6,136 for the Part B 20% copays (which equates to $30,680 of actual Part B Bills), this $10,000 "over-a-lifetime" out-of-pocket pales in comparison to the aggregated  out-of-pocket premium by staying in a Plan F for the rest of your life . . .

This largest Plan F Medigap in IL starts out at less than $2,000 per year, but increases to over $4,000 per year with longevity, with an average 4.1% annual increase on each birthday. If we had an investment account which provided this same 4.1% annual rate of return, this $81,000 of above described principal savings would grow to $127,000 via the compounding effect of interest at the same 4.1% per year.

As seen in two paragraphs above, we would have to take out the approximately calculated $10,000 in Part C for Part A/B copays, but we are still left with a savings of $117,000. Again, this presumes a Part C, Medicare Advantage alternative at ages 65 through 90. Those who live to age 73, have a 50% chance of living onward to age 90, according to Actuarial studies. We can custom calculate your individual savings based on your current age and your expected longevity, given your health status and family history, and arrive at your own projected Part C, Medicare Advantage savings.

Ellen will also discuss what many Beneficiaries are opting to do: Switch from Plan F to Plan G for two reasons. First, since Plan C and Plan  F have already been targeted to be abolished to new Enrollees, due to having no participation in the Part B deductible, we look to the other 8 alternative standardized Medicare Supplements. A high deductible (with the deductible of $2,340 in 2020) Plan G is an economically wise choice, with a typical 3 year break-even.

When a complete evaluation of the premiums and Part A/B costs are considered, the most popular choice in IL is ironically not the Plan G or Plan N. Instead, the Plan D is becoming increasingly popular as it has a 10% - 15% lower premium that Plan G, although the irony is that in IL, the Part D  is the same as the Part G. If you examine the benefit chart, you will notice that the only difference is in the fact the Plan D does not cover the 15% excess charge. However, IL is one of the 8 states in the country with Senior Protection Laws at the state level. 

That is, years ago, IL passed legislation which does not allow a Medicare Doctor to charge above the "medicare approved amount". Simply put, no Part B charge can have this 15% excess billing, so again, the Plan D and the Plan G function the exact same. The only difference is that a Medicare Beneficiary can save hundreds of dollars per year by switching to the Plan D. IL only has 6 Plan D companies registered for sale, and Medicare Solutions can run a free "premium ranking" report based on your age, gender, tobacco usage, prescriptions, height/weight ratio and medical conditions. Currently, New Era Insurance Company at ages 65-80, and Sentinel Life at ages of 80+ have the lowest price Plan D in IL.  

Beneficiaries in Plan F typically do not like copays, so they look to Plan G as the closest alternative. Plan G exposes a Beneficiary to the $183 Part B deductible, so it would appear safer from government interference in the future. In fact, the premium savings of virtually all Plan G's are more favorable than having to pay the $183 Part B Deducible in 2017 and beyond. 

There is now a great migration from the Plan F to the Plan G, as Beneficiaries are now understanding the law and Consulting Firms like "Medicare Solutions" is conducting these outreach and educational workshops and seminars. When those new-to-Medicare Beneficiaries study their Medigap options, the vast majority are now choosing Plan G over Plan F, due the savings which can add up substantially over the years.

The second reason that Plan G might be a better alternative over Plan F is to envision the high probability of an "increasing rate spiral", which is a term that was coined after major medical health insurance companies (and the Affordable Care Act) took 15% - 20% rate increases over the years. In fact, we are now seeing 20% - 30% premium increases in the Affordable Care Act for 2018. Plan F is predicted to experience the same actuary and underwriting pressure that the ACA and major medical companies in the past have endured. The economics of supply and demand are simple and easy to follow:

When premium increases are low or at least reasonable, few Insured Customers feel a need to take the time to proactively research and shop for competing rates. However, here's what happens when larger premium increases occur: Those that are in better health, and therefore can medically qualify seek out and shop for better rates for their same Plan F. Guaranteed issue is only available for one Medigap company in IL, as the law allows all other Medigap Insurance companies to medically underwrite all applications received 3 months after the issuance of Part B effective date.

Unfortunately, those Medigap companies with the lower rates are able to offer these savings because they have extensive health underwriting questions (which can be checked against the Medical Information Bureau) along with prescription usage, which likewise can be checked by a national database, like ScripCheck. . In short, those Beneficiaries who can not answer the health questions favorably are denied. Conversely of course, the healthier Beneficiaries can, and do, leave that company which gave the rate increase which led them to shop.

Even after one year, that company is left with what they refer to as a "higher claim risk pool". Every year thereafter, especially when there is a higher-than-average premium increase, the healthier Beneficiaries shop, then leave. The left-over risk pool gets even higher claims, which of course, leads to even higher premium increases. Hence, the term "premium spiral".

You have no doubt seen and heard in the media that many of those who are under age 65 and on the Affordable Care Act are "timing" their coverage to coincide with expensive surgeries. That is, they prefer to pay 2.5% of their adjusted income (or the greater of of $695, and up to $2,085 per family) as a planned and acceptable penalty since the ACA deductibles and percentages (60% 90%) of copays have grown so large. Likewise, they will pay over $695 (now adjusted for inflation in 2018), since they can legally add, then drop, this ACA coverage. The media explains that this ACA risk pool is getting less healthy Members to offset the higher claims Members, which can forebode what might happen to Plan F. 

Although the Plan F legislation is not scheduled until the beginning of 2020, the education process has now begun, and healthier Plan F Members are joining other D, G and N Plans. Even after 2020, this same educational process and premium shopping will leave Plan F members with higher premiums as no new members (those younger than age 63 in 2018) will legally be able to join Plan C or Plan F. Simply put, the ACA is not having enough healthy members to keep costs down, and Plan F will be extinct for those Beneficiaries obtaining Part B (even if they work beyond age 65 and purposely delay Part B) after 1-1-2020.

Beneficiaries who already were enrolled in Part B before 1-1-2020 will still be grandfathered in their enrollment. However, if they leave Plan F, there is no assurance ("guaranteed issue" like when they first enroll in Part B) that they will be accepted into another Plan F. This is because (with the exception of Blue Cross of IL, which is guaranteed issue at all ages, with no medical underwriting), they will have to favorably answer health and prescription usage questions.  

Up until now, Plan F has always enjoyed reasonable premium increases as those new Retirees (typically at age 65, or slightly older) just leaving the working careers were healthier and had few claims, which resulted in less cost to the company. Without these healthier incoming Plan F Members, Experts predict Plan F to experience premium increases similar to premium hikes as seen in the last few years of the Affordable Care Act.

The largest Medicare Supplement company in America charges over $4,000 per year (up to $8,486 at older ages) from their published rates on file with each State's Insurance Dept for a 68 year old who is not in the very best of health. We don't believe in overly dramatizing potential premium spikes or spirals because we are an Independent and objective Consulting company providing a complimentary seminar. We only offer these legally registered premiums for Plan F and other Plans as guidance for Medicare Beneficiaries who are shopping for the best rates.  

However, if you overlay what can happen to your Plan F based on the Affordable Care Act, realizing that a 68 year old's published rates with some companies are already over $4,000 per year in IL, Ellen trusts that you, being eligible as fellow Sun City Residents, will let us provide you with answers, as our Neighbors (we are in N25). Again, we look forward to providing you with all these important details.

No products will be mentioned at our free informational seminar and there will be no obligation or sales pressure. All we ask is that you have an open mind as our goal is to show you as close to accurate as is possible, (and under what medical inflation rate) how much your current Plan F, or current Plan, will cost over the years. Based on your age, we will examine the best case scenario of the current 5% - 7% annual rate increases, along with the worst case of the above described "upward premium spiral".

If you prefer an in-home consultation, I can gladly bring the seminar to your dining room or kitchen table, wherever you are most comfortable, including the Prairie View Reading Room. Either way, call me at 847-284-0232 so that we can either reserve your seat for our seminar, or again if you prefer, visiting with you at the Reading Room, or chatting in your home.

Lastly, my apologies for having such a long description on this web site page. Not to worry, I specialize in making things truthful, but understandable and simple. The average Medicare Beneficiary has put over $100,000 of their hard-earned money into the Medicare Trust Fund (now at a rate of 3.2% of our earned income before going on Part B). Unless we make wise, well thought decisions, we can go out-of-pocket another $100,000 in Medigap + Part D costs + nursing care.

This new law can empower us to save this next $100,000, but the first step is to just let us provide this complimentary no-obligation seminar in the Solarium Room (just outside of Jameson's Restaurant) at the Praire View Lodge in Sun City, Huntley, IL . . . or a customized in-home presentation. So, we hope to chat with you. Our philosophy is that in our Sun City, there are no Strangers, only new Friends and Neighbors we haven't met yet!        

* The average age of a Sun City Resident is 71, and the most recent actuary forecast for longevity is for this age 71 (for those without a current chronic condition which might shorten longevity) to live is to have a 50% chance of living to age 90.   

** source of 3 days being the average in-hospitalization stay:  http://www.cdc.gov/nchs/fastats/hospital.htm