The clock is ticking. On Jan. 1, 2020, legislation passed by Congress in 2015 kicks in, closing access to two of the most popular Medigap plans (Plan F and Plan C) to new enrollees. If you’re 65 now – or will reach that age between now and Jan. 1, 2020 – you can still sign up if you qualify because you're in the initial sign-up period or if the insurance company admits you. (For more see: Medigap Insurance: Who Needs It?)

If you are already on either of these two plans (or the high deductible version of Plan F known as F+), you can stay with your chosen plan for the rest of your life. All others will have to choose another Medigap plan or go with a Medicare Advantage plan as an alternative. (To find out about the differences between these two types of insurance, read Medigap vs. Medicare Advantage: Which Is Better?

How Medigap Works

Medigap is supplemental insurance, provided by a private company that works alongside original Medicare to pay many of the costs Medicare does not. Currently there are 10 Medigap plans, labeled A, B, C, D, F, G, K, L, M and N. All plans under each letter must provide the exact same coverage: All Plan As are the same, all Plan Bs are the same and so on.

When you initially sign up for Medicare, you can choose any Medigap plan you want during an initial six-month period. If you want to change plans later – say from Plan A to Plan F – the insurance company may evaluate your health, charge a higher premium or refuse to cover you altogether. 

The Most Popular Plans

Of the 10 Medigap plans, most people (53%) sign up for Plan C or Plan F. Those two plans have the most comprehensive coverage, and seniors prefer the certainty that comes with a set premium and no surprises.

Although these plans don’t cover dental or vision care or prescription drugs, they do cover doctor visits, hospital stays and most tests. Plan C covers almost everything Plan F covers except “excess fees” doctors charge over Medicare limits.

Reasons for the Change

With Medigap Plans C and F so popular, you might reasonably ask: Why cancel them? The answer is that the plans cost the government money. Congress decided to get rid of them, in part, to reduce government spending on Medicare and also to help fix a Medicare formula that could cut payments to physicians every year.

Medigap Plans C and F cover the $183 annual Medicare Part B deductible. According to the Congressional Budget Office, eliminating these plans will save the government $400 million between 2020 and 2025 by not covering that deductible. In addition, proponents of the legislation argue that by forcing seniors to pay the Part B deductible, they will think twice before going to the doctor for minor problems. Others, however, argue that discouraging seniors from seeking needed medical care could end up costing the government more money down the road. 

What You Can Do

Your ability to get on Medigap Plan C or Plan F ahead of the Jan. 1, 2020, deadline depends largely on your current Medicare status.

  • If you are currently on Plan C or F (including the high deductible Plan F+): You are safe. Anyone already on one of these plan as of Jan. 1, 2020, can remain on that plan for life.
  • If you are not yet on Medicare: You must enroll before Jan. 1, 2020. Your initial enrollment period (IEP) begins three months before your 65th birthday and ends three months after the month in which you turn 65. Depending on when you turn 65, you may want to consider early retirement or signing up for Medicare while you’re still employed.
  • If you are currently on another Medigap plan: You can switch to C or F if you are still in your original Medigap Open Enrollment Period (six months beginning the first month you had Medicare Part B coverage). If you are past that period, depending on the laws in your state, insurers may refuse to cover you, delay coverage or charge a higher premium. There are several exceptions, so you should consult with insurance companies in your state to see if you qualify.
  • If you are on Medicare Advantage: You can drop that coverage and enroll in original Medicare during the annual open enrollment (Oct. 15 to Dec. 7) or during Medicare Advantage Disenrollment (Jan. 1 to Feb. 14). Getting on Plan C or F (or any Medigap plan, for that matter) is more difficult. You will likely have to undergo medical underwriting to determine whether you will have to pay a higher premium or if you are even eligible for coverage. 

A Potential Unpleasant Surprise

Even if you jump through all the requisite hoops and end up with Medigap Plan C or F before Jan. 1, 2020, you may face rising premiums. Many insurance agents fear this will happen because these grandfathered plans will no longer be enrolling healthier seniors. Others suggest this may drive more people to Medicare Advantage programs, which will cost taxpayers and the Medicare program even more. 

The Plan G Option

Some agents are advising clients to sign up for Plan G as an alternative to Plan F. Plan G is the same as Plan F except that enrollees must pay the once-a-year Medicare Part B deductible of $183. Some enrollees have noted that premiums for Plan F already require people to pay more than the $183 they save over Plan G, making the move to Plan G even more appealing. Of course, if you are already on Plan C or F and want to switch to Plan G, you must qualify and live in a state that lets you switch. It’s also a good idea to ask the insurance company if its policy is portable, meaning that if you buy it in one state and then later move to another state, you won’t lose your insurance because you can’t purchase it in your new home state.

​The Bottom Line

The fact that Medigap Plans F and C will no longer accept new enrollees beginning Jan. 1, 2020, is not the end of the world. It may even be a blessing in disguise considering the option of Plan G, as noted above. The real problem you may face is the difficulty in switching from one Medigap plan to another after the initial open enrollment period.

If you decide to go with original Medicare plus Medigap, do your research and make sure you choose a Medigap plan that will meet your needs now and in the future because it may well be the only Medigap plan you will ever get to have.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.