MACRA is an acronym for Medicare Access and CHIP Reauthorization Act, legislation signed into law in 2015. It is a law that states that anyone who is “newly eligible” for Medicare starting January 1, 2020, and beyond may not enroll in a Medicare Supplement Plan that covers the Part B deductible, such as plan C, F, or High Deductible F.
Individuals considered, “Newly eligible” are those who:
- Have attained age 65 on or after January 1, 2020
- First become eligible for Medicare due to age,
disability, or end-stage renal disease, on or after
January 1, 2020
Plan options vary by market, of course. However, the closest substitute for Plan F is Plan G, which is already becoming a very popular choice for many Medicare-eligible individuals. The only difference between the two plans is coverage of the Part B Deductible, which is $185 for 2019. I have received numerous calls over the last few weeks from an agent looking for advice regarding clients who are retiring at the end of the year and will be applying for a Medicare supplement. Some agents have been under the impression that since they are coming off their group
coverage on 12-31-2019, and applying for a supplement on or after 1/1/2020, that they would have the ability to get into a Plan G under the new guaranteed issue rules.
This would be great, but unfortunately, this is not how it will be working. If your client has an effective date on their Medicare card for Part A and B earlier than 1/1/2020, then they will have the option to Plan A, B, C, F (HDF), K, and L. To qualify for Plan G guaranteed issue, they will need to have a Medicare effective date on or after 1/1/2020.
Your current clients who became eligible for Medicare prior to January 1, 2020, may continue to keep or even purchase plans that cover the Part B deductible.
NO ACTION IS NECESSARY ON THEIR PART.
You can reassure current policyholders that their plans will not change or go away. If they are on a plan that covers the Part B deductible today they can keep the plan they are on now. The three states that obtained waivers from implementing the standardized Medicare Supplement plans (MA, MN, and WI) also must comply with eliminating coverage for the Part B deductible.
What if someone became eligible for Medicare prior to January 1, 2020, and wants to purchase a Plan F for a January 1, 2020 effective date?
Individuals are eligible to continue to enroll in a Plan C, F, or F(HD) (or another plan that covers the Part B deductible)after January 1, 2020, if they became Medicare eligible prior to January 1, 2020
What are the consequences if you sell a Medicare Supplement plan that covers the Part B deductible to a “newly eligible” individual?
Applications for these plans for those “newly eligible” will be denied and the agent will be investigated and subject to disciplinary action up to and including termination.
Any person or company who sells or issues such policies to “newly eligible” Medicare beneficiaries after January 1, 2020, would be subject to fines, and/or imprisonment of not more than five years, and/or civil money penalties of not more than $25,000 for each prohibited act.