Can you answer “yes” to the following questions? If so, then Medicare Supplement Plan F may be the plan for you!
- Did you become eligible for Medicare before January 1, 2020?
- Are you looking for a plan that offers the most benefits?
- Would you rather not deal with copays, coinsurance or deductibles?
Plan F is chosen more than any other plan!
Medicare Supplement Plan F Overview
Medigap Plan F is the most popular plan by far. Around 55% of all Medicare Supplement enrollees are in Plan F. The next most popular is Plan G at 13%. Plan N is a close third place at 10% of all enrollments and gaining quickly on Plan G.
Plan F is the most popular because it offers more benefits than any of the other Medicare Supplement plans. It offers “first dollar” coverage which means Plan F starts paying from the first dollar of your medical bill. This means no copays, coinsurance or deductibles ever!
Let’s look at three components to evaluate the merits of Plan F. Those components are 1) monthly premium, 2) coverage and 3) historic rate increases.
Medicare Supplement Plan F monthly premium
Plan F generally has the highest monthly premium of all the Medigap plans.
For example, a Plan F for a 70 year old female, non-smoker, in Kansas, is approximately $22 more per month than a Plan G. It’s $45 more than a Plan N. You will spend around $264 more per year on a Plan F vs. a Plan G. You will spend about $540 more per year on a Plan F vs. a Plan N.
Plan F’s coverage
Plan F shines when it comes to the amount of benefits it offers. It fills in ALL of the gaps of Medicare Part A and B. When you go the doctor’s office or hospital you will have no copays, coinsurance or deductibles.
One of the benefits of having a Medigap Plan F is that your health care budget is known ahead of time. Plan F enrollees like the comfort of knowing their health care costs (excluding prescription drugs which are covered under Part D) are limited to the monthly premium they pay.
Rate increases for Medicare Supplement Plan F
Medigap Plan F has historically had the highest annual rate increases. Rate increases for Plan F have averaged approximately 2% above Plan G and 4% above Plan N.
Why are Plan F rate increases higher than the other plans? The main reason is because of the plan’s claims experience. Claim experience is the amount of money the insurance company has to pay out for an insurance claim. Plan F generally has higher claims experience than the other plans. One of the reasons is that Plan F policyholders don’t have any “skin in the game”. When a Plan F policyholder seeks medical attention there is zero cost sharing. Because of this, they may see the doctor more often than enrollees in other plans.
Medigap Plan F Benefits
|Gaps in Original Medicare||Plan F coverage|
|Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)||100%|
|Medicare Part B coinsurance or copayment||100%|
|Blood (first 3 pints)||100%|
|Part A hospice care coinsurance or copayment||100%|
|Skilled nursing facility care coinsurance||100%|
|Part A deductible||100%|
|Part B deductible||100%|
|Part B excess charges||100%|
|Foreign travel emergency (up to plan limits)||80%|
Plan F real life cost examples
Does Medigap Plan F have any out of pocket expenses?
The short answer is NO!
The only cost to you on a Plan F is the monthly premium you pay to your insurance company.
The best way to understand how a Plan F works to look at a few real life examples…
You visit your doctor because of a pain in your chest. The doctor orders a chest x-ray.
- Office visit: Medicare Part B will pay 80% of your office visit and the remaining 20% will be billed to your Medicare Supplement Plan F. You pay $0.
- X-Ray: Part B will pay 80% of your x-ray and the remaining 20% will be billed to your Plan F. You pay $0.
You fall and fracture your hip.
- Ambulance ride to the emergency room: Ambulance transportation is billed to Medicare Part B, so Medicare will pay 80% of the bill and the remaining 20% will be billed to your Plan F. You pay $0.
- 3 night hospital stay: The daily room and board, diagnostic tests, laboratory services, nursing care, hospital employed doctor services and surgical supplies will all be billed to Part A. There is a $1484 deductible under Part A (for 2021), but your Plan F steps in and pays this in full. You pay $0.
- Hip replacement surgery: You inpatient surgery performed by a private practice doctor is billed to Part B. After Part B pays 80% of the bill, your Plan F pays the remainder. You pay $0.
- Skilled nursing facility: If your surgeon feels you’re not strong enough for a home recovery, he may order you to a skilled nursing facility. Part A pays 100% of the cost for the first 20 days. If your stay goes beyond 20 days, Plan F will pay 100% of the costs up to day 100. You pay $0.
You are diagnosed with a form of cancer that is best treated at specialty cancer clinic so your doctor recommends you receive care at the Mayo Clinic.
- Transportation to and from the Mayo Clinic: Medicare doesn’t cover these costs so therefore neither does your Plan F. You pay 100% of the costs.
- Mayo Clinic services: Mayo Clinic doesn’t accept Medicare assignment so they are allowed to charge an excess charge. This excess charge amounts to 15% above the reduced 95% level of the Medicare approved amount. Your Plan F steps in and pays all excess charges. You pay $0.
Can you still buy Plan F?
The short answer is….it depends.
If you were eligible for Medicare before January 1, 2020 then the answer is YES!
Otherwise, the answer is NO. Plan G has the most comprehensive coverage after Plan F.
The changes in eligibility for Plan F is the result of federal legislation called MACRA (The Medicare Access and CHIP Reauthorization Act of 2015). One of the purposes of the legislation is to remove “first dollar” part B coverage from Medicare Supplement plans. The goal is to reduce the costs to Medicare.
The MACRA changes will not prevent those that already have a Plan F from finding a more affordable Plan F. It also doesn’t affect those people that were eligible for Medicare before January 1, 2020 and aren’t currently on a Plan F, but would like a Plan F. These people are free to enroll in a Plan F. They are effectively “grandfathered” in.