Standardized Medicare Supplements, also known as Medigap or Supplemental Insurance came into law in 1992. Since then, all plans sold must offer the same benefits as defined by their plan type regardless of the insurance company.
There are exceptions, Massachusetts, Minnesota, and Wisconsin. These three states require Supplemental insurance companies to provide additional benefits to those outlined by Medicare.
Standardized Medicare Supplements 1992
Here is a list of the first set of Standardized Medigap Plans introduced in 1992. Plans of note would be H, I, and J. Unlike the other choices, these plans provided prescription drug benefits.
Medigap Plan A
Medigap Plan B
Medigap Plan C
Medigap Plan D
Medigap Plan E
Medigap Plan F
Medigap Plan G
Medigap Plan H
Medigap Plan I
Medigap Plan J
High Deductible Options are Added
In 1998 a high deductible option was added to Medigap Plans F, and J, bringing the total available plans to twelve. At that time, a deductible of $1,500 had to be met before either of the new high deductible plans would start paying benefits.
The Medicare Prescription Drug
Improvement and Modernization Act of 2003
Eleven years after Standardized Medicare Supplements were introduced, the passing of the Medicare Prescription Drug Improvement and Modernization Act of 2003 initiated the first significant changes that would go into effect in 2006. The new law created Medicare Part D which covered prescription drugs. Because of the modification, standard plans H, I, and J could no longer offer prescription drug coverage. It also introduced the first cost sharing plans, Medigap Plan K and Medigap Plan L. With the new plans, a percentage of covered expenses was paid by the policyholder until a maximum out-of-pocket limit was reached.
Current Standardized Medicare Supplement Plans
In 2010, due to expanding benefits under Medicare, Medigap Plan E was discontinued. Sales of Medigap Plans H, I, J and High Deductible J, were also terminated. At the same time, CMS introduced Medigap Plan M and Medigap Plan N. Similiar to plans K and L they offered a type of cost sharing. Of particular significance is Plan N with a flat dollar copayment as a form of cost sharing.
The new legislation, The Medicare Access, and CHIP Reauthorization Act of 2015 will change the current selection of plans. Starting in 2020, Medicare Supplement Plans can no longer offer first dollar coverage. Specifically, they can’t cover the Medicare Part B Deductible. Medigap Plans C and F will be phased out. For more information see “Say Goodbye to Plan F.”