Medicare Supplement Plan F or Part F | The Luxury Sedan or Not?


In this article, I will be talking the most popular Medigap plan offered by Medicare.  Specifically, I am going to highlight Medicare Supplement Plan F and its features as part of our posts on “What is Medigap.” It is not intended to be a recommendation for you, just education and a option you may consider purchasing at some point. Ultimately, it comes down to what you want out of your senior health coverage and its cost that will determine whether Medicare Plan F is a fit for you.
The focus here… just talk about the “F Plan” and its features.
Before I continue, I would like to clear something up…
There is no Part F of Medicare.
That’s right.
“Parts” are associated with Medicare itself and not Medicare Supplement plans.
Best way to remember…use the analogy “parts” of Medicare and Medigap “plans.” (Medicare Supplements).
Don’t feel bad.  Medicare can be confusing!!
Medicare itself offers Parts A, B, C and D.  Medicare Supplemental insurers offer the standardized Medicare “plans” which in this case is Plan F.  These pay the balance of your bill when Medicare only pays its typical 80% of approved charges.
Plan F will always pick up the remaining 20% as it is the top of the line.

What is Medigap Exactly?

Medigap is best thought of as supplemental insurance that bridges the gap between what Medicare is willing to pay for covered healthcare claims and the costs that you would be responsible for otherwise.

The Luxury Sedan of Medicare Plans, Medicare Supplement Plan F

The mighty Plan F, also know as Medigap Plan F,  is the top of the line and reigns supreme as the ideal Medigap policy to own.
It is a first dollar plan designed by Medicare to cover the full 20% of Medicare approved charges you would otherwise be responsible for. A Medicare Supplement Plan F is also called a Medigap policy be aware that the terminology is completely interchangeable.
Medigap or Medicare Supplement policies are meant to fill the “gaps” that Medicare does not pay on their approved healthcare charges.

Medicare Plan F Coverage is Fully Comprehensive

I touched on this previously, but Plan F is considered to be a first dollar Medicare Supplement. After Medicare covers their responsibility for your claims, the Plan F will be all of the remaining costs of the bill. As a result of this, you literally have nothing out of pocket.

What are Some of the Benefits of Medicare Plan F Supplement?

  1. Plan F, like all Medicare Supplements, will allow you to choose from virtually all doctors and hospitals in the US.
  2. You never need any kind of referrals for a top notch physician!! These plans will allow you to hand pick from the best specialists if and when you need to. No, your primary doctor does not need to authorize it either.
  3. Plan F, like all Medicare Supplements, is guaranteed renewable. In other words, you can never be cancelled due to your health or if the issuing company leaves the business.
  4. Plan F pays 100% of your Part A deductible (hospitalization) and all Part B (outpatient care, Dr. visits etc.)
  5. It covers the 20% of Medicare approved claim amounts that you would be otherwise responsible for.
  6. Plan F pays 100% of Medicare approved  Part B “Excess Charges.”  Read this article for help on what excess charges are.
  7. Ease of ownership. No bills to reconcile.  You have first dollar coverage on Medicare claims.

Plan F Pays All Original Medicare Deductibles and Co-insurance

In 2020, you would owe $1408 for your Part A Hospital Deductible if you did not have a Medicare Supplement.  In addition, you would be responsible to pay the 20% Coinsurance amount that Medicare does not pay. If you had a Medicare Supplement Plan F…all is well as it will pick up and pay this for you.  For the year 2020, any Part B expenses which is any medical service rendered outside the hospital would obligate you to $198 before Medicare pays it portion of your bills.  Plan F will absorb this cost as well.

Medigap Plan F Benefits in Action (Fictitious)

Jane makes a application for a Plan F with ABC Insurance Company.  6 months later, she finds herself unexpectedly short of breath that progressively worsens over several weeks.  She goes to her doctor because she is getting tired very easily.  Her doctor orders some imaging work.  He is thinking the symptoms may be heart related after conducting his evaluation.  Jane’s imaging is conducted and her doctor calls her later to tell her that he has referred her to a cardiologist and she will likely be having bypass surgery.  The specialist (cardiologist) decides Jane should have surgery to prevent a serious heart attack that could kill her.  She enters the hospital and has a successful double bypass procedure, recovers in the hospital for a few days and is sent home.  The total medical charges for all of her care came to $100,000.  Both Medicare Part A and Part B were triggered for all of Jane’s healthcare.
So how did this all wind up out of pocket wise?
Medicare approved all the healthcare and paid its portion of 80% or in this case $80,000.  Fortunately, Jane had an excellent Medicare Supplement, the Plan F which picks up and pays everything including the Cardiologist (specialist) who did not accept his Medicare payment as payment in full.  He charged an additional fee of 15% which was also paid by her plan.
Jane’s out of pocket for these services…zero.

Does That Mean a Medigap Plan F Pays for Everything?

As always, I regularly remind folks of this…

No Medicare Supplement plan, even Plan F, will pay a dime if Medicare does not approve the claim and pay its portion first. If you heard otherwise, dispose of that thought. Medicare itself is in the drivers seat. Medicare Supplement insurance is strictly regulated by federal gov’t (Medicare Itself) as well as all state insurance commissioners offices. No Medicare Supplement company pays better than another, period.

Plan F was created in 1992 when Medicare standardized 10 plans that were to be the only Medicare Supplements available.
They were labeled at that time, with the letters A-J. From that rose the current king of the hill…the coveted Plan F.
Three states are the exception to this.  Those states are Wisconsin, Minnesota and Massachusetts. Each have their own supplemental plans that vary from the current 10 standardized Medicare plans.
Now, in order to have a Medigap Plan F, you must first be enrolled in Medicare Parts A and B. These parts of Original Medicare will pay 80% of the Medicare approved amount and send the remaining balance to be paid by Plan F.
Plan F is fully comprehensive. If Medicare pays its portion, you can be sure Plan F will pay first dollar after that leaving you with nothing out of pocket.
It simply has been the easiest and most convenient Medigap policy to own. Medicare Plan F policies have a loyal following, without a doubt.

Coverage For Part B Excess Charges Explained

Without getting too deep into this topic, Plan F pays 100% of any Part B excess charges submitted to Medicare by your provider.  These occur outside of the hospital and can include ambulance, oxygen providers, physician care etc.  Any Medicare provider of outpatient care unwilling to accept the limiting amount Medicare approves may charge up to an additional 15% above and beyond that “approved” amount.  The addition 15% is called a Part B Excess Charge.  Most providers do not do this and accept Medicare’s approval amount as sufficient for their services.
Plan F will pick up and pay the 15% when any approved charge exceeds their allowance.

Is Plan F the Same With All Companies

The short and full answer is yes.  When we are talking about supplemental insurance with Medicare,  it does no matter which company issues your Plan F, all claims will be handled the same way.  The only difference is how much you pay to have coverage with your company and some insurers are financially rated higher.
Does that mean the lowest price company for Plan F is the best company to buy from?  Maybe, but not necessarily.  That is a subject for another day though.
Is a Plan F the answer for you?
Only you can decide.  Personally, I have more of them on the books than any other plan, but I don’t typically highlight it any longer.  Soon the Plan G will dominate I’m sure.
For some seniors, the cost of ownership can make the experience less desirable.  Top of the line or not.
Be sure you can accept these two items before you seriously consider a Medicare Plan F. Realize that if your health changes, you may not be eligible to change to a different company that is more affordable due to that change in health.

Supplemental Plan F – Our Conclusion

Know what your trying to accomplish when purchasing or owning a Medicare Supplement Plan F.  If you want top of the line benefits and ease of ownership, Plan F is unmatched. That is not even a debatable point.
Is it the right Medicare Supplement for you?
There are other Medicare Supplements that perform similarly and provide better value as well.
An important and key note here…
You must be Medicare eligible prior to January 1, 2020 to purchase a Plan F from ANY insurance company.  If this is your case, you are allowed to not only apply for Medicare supplement Plan F, but also change insurance companies… as long as you meet meet all the standard health eligibility requirements imposed by any insurance company.
Those Medicare MACRA law changes may result in higher premiums experience depending on your state rules and regulations.  Remember, the new laws are not going to allow the younger seniors to enter supplemental Plan F.
We will have a progressively aging block of business that becomes smaller each year.  The Plan F will not be receiving any “younger blood” entering into the mix to balance the aging block of policy owners.
Some states allow insurance companies to charge a higher claims (profit loss) to the specific plan (this case…Plan F) while other states require the risk spread out over all the Medicare plans.
Be aware of this.
Consider if you have the funds at your disposal for years down the road if you reside in a state that allows your Medigap insurance company to up charge Plan F policyholders versus spreading the health risk over all the plans.
With the possible negatives out of the way, Medicare supplement Plan F is still top of the line.
We can help you assess whether it is a good option or not.
Whatever you decide, always think of supplemental insurance with Medicare in terms of the long run.  Health deteriorates as we age.
Having the right plan in place when we need it is vital.  Don’t tell yourself you’ll purchase better benefits if your health goes downhill.
In most states your health is the determining factor if you can change coverage.
With that said, you may want to consider your alternatives before you go any further.  Sometimes, we don’t need top of the line so a little compromise isn’t all that bad.  Go here to compare the 2 most popular Medigap Plans (Med Supp).  Just a little hint, but Medicare Supplement Plan F, at this particular writing time, happens to be one of them.
If you have picked up some good information here today from our “What is Medigap” series of posts for seniors on Medicare, that is a big plus.  Always feel free to make a comment to let us know how we have helped or could improve our resources.  Trying to help seniors understand Medicare and their options is our goal here.
If you found yourself on this web page searching for Medicare Part F, we hope you will feel comfortable to contact us or continuing your tour of our site to learn a few other tid bids about Medicare.  If you need a good starting point, learn about your Medicare benefits in our simple guide post.
Wrapping this up…you might be best served by talking to a professional independent agent who works specifically in senior benefits if you feel overwhelmed.    They can help you sort thru what you can expect in the long run and get you pointed in the right direction.  With an independent agent/broker, the cost is free to you.
If you would like to get your questions answered, feel free to give us a call about your personal situation.  We’re here to help.  269-244-3420

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