What Are The New Laws for Medicare Supplemental Plans? For many seniors and baby-boomers nearing retirement, the real question is ‘How will the new Medicare Supplemental Plan laws affect me’? The purpose of a Medicare Supplemental Plan is to bridge the gap between medical expenses and the amount Medicare covers. In the current nomenclature, these plans are referred to as Medigap encompassing all sectors of coverage other than Original Medicare Part A.
Old regulations required 100% out-of-pocket payments for Part D (prescription drug costs) up to $2,830. While the new rules reduce the initial out-of-pocket ceiling, the yearly donut hole widens. For example, $550 of expense will be required before a medical supplemental plan begins. At this point co-pay of 50% must be made on the next $4,950 of costs for the year before full coverage continues. Those financially unable to bridge this gap, will be forced to either stop buying prescriptions or seek assistance from state Medicaid programs for which they may or may not be income eligible.
Although new law allows a 50% discount for name-brand medications, with an expected increase to 75% by 2020, not all brand-name medications will be discounted. Medicare Supplemental Plan drug coverage may vary from carrier to carrier.
New regulations requiring for 85% of premiums and government subsidies to be applied by insurance providers to medical claims payment, coupled with anticipated premium and co-payment changes could open the door to a new ‘scout and scalp’ practice on the part of carriers resulting a greater trickle-down to the consumer effect.
As more employers elect to discontinue coverage for retires, the eligibility regulations for new individual plan coverage may change drastically especially for low-income or fixed-income seniors.