Why No Plans E, H, I, and J

By Lance D. Reedy

When Congress authorized Medicare in 1965, the insurance industry wasted no time to create “Medigap” policies for the new Medicare beneficiaries. These policies paid for “gaps” or deductibles and coinsurances not covered by the new Medicare legislation. This worked fine, except there was a big problem for shoppers. There was no standardization in most states for these plans. While the benefits for various companies’ plans were similar, it was still difficult for shoppers to compare coverage and benefits.

Through the Omnibus Budget Reconciliation Act (OBRA) of 1990, Congress directed the National Association of Insurance Commissioners (NAIC) to develop a model law and regulation that required all Medigap or Medicare supplement insurers to offer a standardized core plan. This new core plan was called Plan “A”. It also allowed companies to sell up to nine additional standard plans which were Plans B through Plan J. Plans H, I, and J had a prescription benefit; however, only a few companies elected to offer these three plans. Later on, Medicare added the high-deductible Plans F and J.**

Congress passed the Medicare Modernization Act (MMA) in 2003, which was the broadest revision to Medicare since it was authorized in 1965. Some of the key provisions to this sweeping legislation were as follows:

  • • A new Part D prescription plan was established.
  • • Medicare + choice was renamed Medicare advantage, and new funding was to be injected to expand this program. Today, this is also known as Medicare Part C.
  • • New Medigap or Medicare supplement Plans K and L were to be added in 2006.
  • • The prescription benefit was to be removed from Plans H, I, and J sold after January 1, 2006.
  • • Medicare beneficiaries in higher income tax brackets would pay a higher Medicare Part B premium. This was to be phased in over a three year period.

Two of the benefits included in the model 1990 legislation were the preventative benefit in Plans E and J and the “at home recovery” benefit in Plans D, G, I, and J. Over time as Medicare added new benefits, this resulted in the underutilization of these two Medicare supplement benefits.

The NAIC revised the model for the standardized plans for all plans sold after June 1, 2010. These new plans became known as the modernized plans. The preventative and at home recovery benefits were dropped. The old Plan G had the “Part B excess” benefit that paid at 80%. This was increased to 100% in the new Plan G. With these revisions, the following situation occurred:

  • • The old Plan E was identical to the existing Plan D.
  • • The old Plan H was also identical to Plan D.
  • • The old Plan I was identical to the new Plan G.
  • • The old Plan J was identical to the existing Plan F.

Therefore, the old standardized Plans E, H, I, and J became redundant to other lettered plans. The only sensible thing to do was to drop them from the new modernized plans. The model also created two new lettered plans, Plan M and N. Additionally, a new Part A hospice cost-sharing benefit was added to the basic benefits of all 2010 plans. This covers the five percent coinsurance charge for drugs and respite care. Please refer to the outline of coverage for details of the benefits for all of these plans.

What happens you if have a Medicare supplement policy that was issued prior to June 1, 2010? As long as you continue to pay your premium, your policy remains in force and your benefits continue unchanged.

Now you know what happened to Plans E, H, I, and J.

2008 NAIC Medigap Model Regulation** For those interested reading in detail the 128 page, 2008 NAIC Medigap Model Regulation click here. This is available from cms.gov.