Does High Deductible Plan F Ever Make Sense?

The High Deductible Plan F 2019-2020 Need to Know

This is actually not a common question that we receive but I am going to address it here today anyway.  Does the high deductible plan f ever make sense?  I’ll answer that question as well as suggest those who are the best candidates.  I’m going to include this as part of our “What is Medigap” series of articles that will be more focused on individual Medigap/Medicare Supplement plans versus Medicare itself.

So why am I choosing to write about the High Deductible Plan F you ask?  After all, it isn’t a common question.

Well, now days, most senior health insurance agents are highlighting Medigap Plan G.  I have done it a fair share myself.  Started doing it a good 20 years ago.

However, at the same time, many agents discourage the standard Plan F for it’s questionable value based on its considerably higher cost.  In fact, Plan F is the most expensive Medigap plan of the 10 standardized choices.  Well, make that 11 if you count the HD Plan F.

High Deductible Plan F is at the other end of the spectrum and is very, very affordable.  With that said, you should always have coverage you are comfortable with and is affordable.  Listen to what your Medicare specialist has to say carefully, but buy the coverage you want and can comfortably afford.  You have to live with it, not the agent or your friends.  Insurance is a personal thing.  That is why Medicare created several plans to choose from.

Truth be told though, there are typically 3 plans that are the best choices for the majority of seniors who have or will elect Original/Traditional Medicare for their healthcare needs.

The key word from the former is “typically.”

Yes, there are exceptions to this general rule and it seems that many, many agents are not catching it or are refusing to promote it.

The High Deductible Plan F or Is It… Plan F High Deductible?

Call it what you will.  It is a matter of choice.  If you live in Southern Florida…say Boca Raton, Miami or even up in Tampa for example, premiums for most Medicare Supplements are much higher than almost all other areas of the country.  Premiums are so high in fact, that paying the deductible in the “High Deductible” Plan F is almost a “no brainer” because of the pure premium savings it offers.

Never heard of the Medicare Supplement High Deductible Plan F?  You’re not alone.  Many have not.  Similar information can be found in your “Medicare and You Guide Book” (2018 edition) on page 80.  The high deductible option is denoted as Plan F* and the details are available at the bottom the page.

If you live in specific areas of the country like Florida or even New York, it may be something to take a serious look at.  Just remember, you have to satisfy a yearly deductible before the Medicare Supplement will start paying the portion of any Medicare approved claims.

If you want to get the rates in your area to do a comparison, take a moment and get in touch with us.  Our help is free to you.

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How Does The Plan F High Deductible Work?

Here is the all important item to note.  As of 2018, the “high deductible” required by Medicare before supplemental benefits is $2240.

If medical care is required for you, the $2240 annual deductible would be paid by you before any supplemental benefits are paid by the insurer.

Therefore, you would be responsible for the balance of Medicare approved charges typically paid by the Plan F including coinsurance, co-payments and deductibles until you have reached the “high deductible” out of pocket.  So, as of now, you may be responsible for up to $2240 in 2018 for out of pocket,  Medicare approved services.  After that however, any approved Medicare claim is paid in full.

Now that sounds like a good deal of money to have to pay if you end up in the doctors office or hospital.  However, when you look at the premium savings each year and the benefits offered, this plan will keep your total out of pocket for healthcare on Original Medicare to minimal amount yet offer great benefits if your health turns for the worse.

Nothing changes regarding your base Medicare Part A and B benefits.  The deductible is applied towards the 20% that Medicare does not pay on approved claims.

Who Is The High Deductible Plan F For?

A 65 year old Male, non smoker in Boca Raton, FL would have a premium for Medigap Plan G of $238/mo. with United American for example.  Plan G is considered to be a value plan by most senior health agents/brokers.  It is typically purchased for its affordability versus the excellent benefits it offers.  It has a Part B deductible of $183 in 2018 for outpatient care.

Now, let’s take a closer look at the Medigap High Deductible Plan F which pays full benefits after you meet the annual deductible of $2240 in 2018.  This cost would now be $64 for the United American High Deductible Plan F.  This particular example from United American, a High Deductible Medigap Plan F would save you $2048 a year in insurance premiums alone.

How much more would you save if you didn’t have $2088 in medical expenses each year?  You see, you aren’t paying this money out thru insurance premiums so it is potential additional savings.  Remember, this plan is full benefits after you meet the $2240. Nothing more out of pocket on any Medicare approved claim for the year.

So, in summary, you risk paying up to $2240 each and every year, but save $2048 in premiums.  Where you really gain is in not paying premiums in excess and essentially self insure yourself for something down the road that may or may not occur.

Remember, that potential savings will be adding up over the years.  If you end up in the hospital, you should have the funds to cover the $2240 deductible, right?

If you elect a Plan G or standard Plan F, you are going to pay a lot of money out per year in your premiums, guaranteed.  Why not hang onto a lot of that premium and tuck it away in a separate fund to pay for any and all healthcare, such as visits to your physician or a physical therapist?

It a frame of mind you must have, definitely.  No one likes to cough up money for medical bills when they are paying for insurance, right?  You can either cough it up to the insurance company upfront or in the worse case scenario, pay your premium savings out in the event of a large medical claim.  No harm done.

Insurance is a very personal choice.

Is The High Deductible Plan F Going Away?

So a question has arisen due to the upcoming Medicare changes in 2020.  The new MACRA laws will be going into effective.  There will be some definite Medigap changes.

Some of you may know the standard Plan F will not be available as it once was.  People turning 65 after January 1, 2020 will not be able to purchase a standard Plan F.

The reason it is slated to be removed as an option to, 2020 enrollees… Medicare decided they wanted eligible recipients to have more “skin” in the game.

The opinion of Medicare is…first dollar benefits drive “over utilization” of benefits.  Whether that is true or not, the fact remains, standard Plan F covers dollar one.

Those who already have it may purchase it from any company that offers it if they qualify health wise, regardless of the change.  Policy owners will be grandfathered in and able to change carriers if their health qualifies them.

Now, as far the Plan F High Deductible going away, it appears that it will indeed be unavailable to new Medicare beneficiaries as of January 1, 2020.  While it does not make any sense as policy owners must put $2240 (skin) in the game first, the writing is on the wall.

There are guarantees for you that Medicare does have in place though.  Your Original Medicare benefits guarantee your policy cannot be canceled for any reason other than non payment of premiums.

If you are already on a Plan F High Deductible policy, you can change to another company to save money if your health can qualify you as well.  Some states do allow Medicare beneficiaries the right to change to other Medigap plans without going thru medical underwriting to qualify.

Is There Anything Else I Should Know About The High Deductible Plan F?

With any Medigap Plan or Medicare Supplement (as it is otherwise known), the decision as to whether the plan will pay out benefits is dependent on Medicare.  If Medicare does not approve your healthcare claim, no supplement will pay a nickel.  It has absolutely nothing to do with the supplemental insurer or plan.

Medicare pays 80% of their approved amounts while the rest is sent on to any carrier you have a Medigap policy with.  From there, any additional claim support will be determined by the standardized benefits in that plan.  Remember, if you do not have Medigap coverage, you are responsible for the remaining 20% whether these are hospital or outpatient care expenses.  Don’t lose site of this Medicare fact!!

There are particular parts of the country have some real opportunity to save lots of money, yet have protection when it is needed.  These areas are prime locations that  demonstrate what I suggest might be a better way to go with your Medicare Supplement insurance.  Sometime HD Plan F is a great alternative to the most popular Medicare Supplements which ultimately cost more in premium expense.

As a writer and agent, it is hard for me to advise anyone specifically without knowing your financial protection goals.  If you having been thinking about making a change, there is no better time than the present.  Insurance only gets more expensive as we age.  Take action today.

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Final Thoughts…

Does High Deductible Plan F make sense?  If your still wondering…should I get a Plan F High Deductible?  Take a good look at where you live. 

A high deductible Plan F supports the concept of affordability with fully comprehensive benefits after reaching $2300 (2019). This annual deductible went from up $2240 in 2018.

It should not be disregarded over the big 3 if you live in some select coastal areas. 

No one likes to overpay for insurance especially if their health has been good for many years. 

If your a healthy senior and have a good rainy day fund in place, this might be a diamond in the rough.  The high deductible plan F is a good option here.

The Medicare Supplement plan you select of course is your personal decision.  I am going to stick my neck out and say that the High Deductible Plan F is very smart money for a good number of people though.  It would be my personal choice if I lived in Boca Raton, Florida for sure.

Ultimately you need to ask yourself if you can financially set aside a rainy day fund if you need to get healthcare under a Plan F High Deductible policy.  Remember, you could be paying up to $2300 each year you need medical care and you are not paying all that money in on insurance premiums.  Your keeping your money to use for medical care if you need it.

Conclusion

Maybe our site was part of gathering information from various high deductible Plan F reviews out there in cyberspace? My goal here has been to simply get you the information you need to make a good decision regarding your Medicare options.

I felt compelled to write about the Medicare Plan F High Deductible today as so much emphasis by many insurance agents are on the standard Plan F, Plan G and Plan N (most popular plans and big 3) without looking at high deductible options.  I am not picking on anyone as I’m guilty as charged of touting the same plans with good reason of course. Plan G High Deductible has now been added as well.

Plan F High Deductible can be a real premium saver for people who want to save money and have a solid nest egg to cover the annual deductible as it presents itself.

Hope this has helped you learn a little something new today.  As part of our “what is Medigap” articles, the High Deductible Plan F has its role.  If you live in the right area of the country, it is a real winner especially if you have a good health history… regardless of popularity.

The bonus of electing a high deductible Plan F is massive, long term premium savings.  This creates a pool of money to cover any deductible or even purchase other coverage Medicare does not cover. Remember, Medicare will be paying 80% of all approved charges. That leaves you with 20% up to the annual deductible of $2300. With the upfront premium savings over the years, it isn’t hard to be prepared.

This is a senior insurance strategy to gain a lot of valuable benefits without laying out more than your budget or breaking the bank.

Some seniors will purchase a dental, vision and hearing policy with some of their massive savings.

Medicare does not cover those issues.

Anyway…

If you live near the coastal area, the Medicare Supplement Plan F High Deductible can be tough to beat in my book.

Just food for thought.

Feel free to comment below if you’d like.  We also welcome your recommendations on how we many improve our posts.

Get in contact with us if you have any questions.  We’re here to help.  800-598-6445

Maple Valley Insurance Group

As an independent, senior Medicare Plan and Life Insurance agency, we are dedicated to helping you make an educated choice on your benefits. We're here when you need us.

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