End of Medigap Plans' Coverage of Medicare Part B Deductible

Medicare beneficiaries often buy “Medigap” insurance that pays for many of regular Medicare’s deductibles and copayments. But as a result of legislation just passed by Congress, starting in 2020 Medigap plans will no longer be allowed to offer coverage of the Medicare Part B deductible, which is currently $203 (in 2021). 

However, current Medigap policyholders and those buying policies before 2020 will still be eligible for the deductible coverage after that date.

The change is an effort to help pay for so-called “doc fix” legislation that overhauls the way Medicare pays doctors and that is expected to cost $200 billion over 10 years. Medicare Part B covers doctor visits and other outpatient care, and currently Medigap plans C and F offer coverage of the Part B deductible. The reasoning behind making Medicare beneficiaries pay the deductible themselves is that it will cause them to think twice before going to a doctor and perhaps costing the Medicare system unnecessary money. 

Some argue, however, that if the change prompts beneficiaries to forego needed medical care, they may simply require more expensive care later, costing Medicare more in the end. Critics also say that the change will encourage more beneficiaries to abandon regular Medicare and join Medicare Advantage plans, which will still be able to cover the deductible.

In addition to the Medigap change, affluent seniors will have to pay higher Part B premiums as a result of the legislation. Starting in 2018, individuals with incomes between $133,500 and $214,000 (or twice these figures for couples) will pay more. And the regular Part B premium will rise faster than under current law as a result of the "doc fix" legislation.

Read the Center for Medicare Advocacy's analysis of the "doc fix" bill's impact on Medicare beneficiaries.

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