BSC Creates First-in-State Medicare Supplemental Plan G Extra

Faced with a unique Medicare landscape going into 2020, Krista Bowers, general manager of senior markets at Blue Shield of California (BSC), and her team created a solution that no other company in the state of California had implemented: Medicare Supplemental Plan G Extra.

“The Medicare supplement space has really been dominated by a single plan, by Plan F,” Bowers further explained toHealthPayerIntelligence.com. “As part of MACRA, all the new Medicare beneficiaries will no longer be able to access Plans F and F Extra.”

In a move to decrease Medicare spending, Congress determined to phase out the most popular Medicare supplement plan, Plan F, as well as plan C.

Medicare Plan F covers Parts A and B including the coinsurance, the deductibles, and Part B’s excess charges. It also covers the first three pints of blood during a blood draw as well as skilled nursing facility coinsurance and most foreign travel exchange. Plan F is the most comprehensive Medicare supplemental plan.

Demand for Plan F has been growing at an impressive rate. Together, Plan F and its high-deductible twin, called Plan F Extra, consistently covered around 55 percent of the Medicare population from 2013 to 2017.

However, when Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the bill ruled that plans could not cover Part B deductibles, thereby eliminating Plans C, F, and F Extra to new enrollees as of January 1, 2020.

Therefore, while members who turned 65 in 2019 can still sign up for all ten plans in original Medicare, newly eligible members with birthdays on or after January 1, 2020 will only have eight Medicare supplemental plans to choose from.

As 2019 draws to a close, the question is: where will newly eligible Medicare enrollees go, if not to Plan F?

Bowers and her team developed Plan G and Plan G Extra to partially fill that gap, she explained.

Bowers and her team are the first in the state of California to create a Plan G Extra benefit to meet the high supplemental benefit demand in 2020.

“We strategize that Plan G and Plan G Extra will be the next best alternative to Plan F,” she said. “We anticipate that that market will not shrink, but will shift to this plan.”

Shifting to the new Plan G and Plan G Extra will allow members to enjoy the benefits of Plan F and Plan F Extra while being within MACRA’s stipulation against covering Part B deductibles.

Medicare Supplement Plan G Extra offers all of Plan G’s coverage with five additional benefits.

Plan G Extra provides members with up to $100 off of CVS Health over-the-counter products each quarter. Eligible items include cold and allergy medicines, first-aid products, and pain relievers.

Members of BSC’s Plan G Extra can also receive telehealth consultations from providers by phone or video on their phone or computer.

The plan offers hearing tests as well as Vista hearing aids at the mid- and premium levels.

Eye exams, glasses, and contacts, which are not covered under original Medicare, are available through Medicare Supplemental Plan G Extra.

Lastly, the plan includes the SilverSneakers Fitness Program, a fitness benefit that offers free gym membership.

Through these Plan G Extra benefits, BSC hopes to tackle the fourth highest costing condition among seniors: social isolation.

Social isolation costs the US health system $6.7 billion in 2017, according to AARP. 

It increases healthcare costs by $134 per member per month, which is more than arthritis, according to a recent GreatCall survey. The GreatCall report noted that lack of mobility, depression, cognitive decline, and poor hearing are all contributing factors to seniors’ social isolation, leading to even poorer health conditions.

“Depression is another serious consequence of aging, especially as folks feel less healthy,” Bowers said. “We believe these kinds of benefits can help seniors stay more active and social.”

The plan will be available for Medicare’s Annual Election Period starting on October 15, 2019.

Bowers acknowledged that there may be some matriculation to Medicare Advantage, especially as CMS expands plan benefits. However, on the whole, she expected a consistent flow to supplemental plans.

“Will we anticipate that there will be fewer folks in the Medicare supplement market than there were previously? I don't think so,” said Bowers. “This particular segment of the population is really interested in that kind of freedom and kind of the hundred percent coverage that you really get with a Medicare supplement-type product, even though the part B premium is not paid for. We forecast that you will still have a strong demand in that marketplace.” 

As the marketplace shifts according to regulations and seeks to accommodate the growing number of Medicare enrollees, payers will continue to be innovative about plan benefits in original Medicare, Medicare supplemental plans, and Medicare Advantage.