Medigap Plan F Supplemental Coverage
In this article, I will be talking about one of the most popular Medigap plans 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.”
This plan is not intended to be a recommendation for you, just education. 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 we get going here, I would like to clear something up regarding a common inquiry…what is Medicare Part F?
There is no Part F of Medicare. “Parts” are associated with Medicare itself and not Medicare Supplements. Best way to remember…use the analogy “parts” (A-D) of Medicare and Medigap “plans (A-N).” (Medicare Supplements).
Don’t feel bad. Medicare can be confusing!!
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, the top of the line, still 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. 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 Plan F?
- Plan F, like all Medicare Supplements, will allow you to choose from virtually all doctors and hospitals in the US.
- 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.
- 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.
- Plan F pays 100% of your Part A deductible (hospitalization) and all Part B (outpatient care, Dr. visits etc.)
- It covers the 20% of Medicare approved claim amounts that you would be otherwise responsible for.
- Plan F pays 100% of Medicare approved Part B “Excess Charges.” Read this article for help on what excess charges are.
- 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 2018, you would owe $1340 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.
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 the Plan 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. Sorry to say, it is nothing but folklore. Medicare itself is in the drivers seat on what your insurer will pay. 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 1996 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. Wisconsin, Minnesota and Massachusetts have there 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 will pay 80% of the Medicare approved amount and send the remaining balance for the balance to be paid by Plan F. Plan F is fully comprehensive in that 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. There certainly is a reason it has been the most popular plan among seniors for 20 years plus.
Is Plan F the Same With All Companies
The short and full answer is yes. 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. Is the lowest price company for Plan F the best company to buy from? Maybe, but not necessarily. That is a subject for another day though.
Is this plan is 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. Cost of ownership and rate increases can make the ownership experience less desirable than many people anticipate. 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.
Common Questions About the Medigap Plan F
What doesn’t Plan F cover?
- While Plan F is 100% fully comprehensive, it does not cover any expense Medicare does not approve. No Medicare Supplement plan will.
What is the most popular Medicare Supplement Plan?
- As of the start of 2018, the Plan F still holds the edge is terms of actual policy owners and sales. It is, however, being challenged by Medigap Plan G in particular. Plan G has become quite popular in recent years.
What are the 10 best Medigap insurance companies?
- This one is tough to answer. Medigap rates vary widely from state to state. There is not a company that has the best supplemental rates in all states. Many carriers elect to conduct business in a few states while others are very broad based. Rates will be affected by your age, sex, tobacco use and any eligibility you may have for a household discount.
Does Medicare cover Chiropractic care?
- Yes they do. They cover 80% of the approved amount and the remaining 20% is sent over to any Medicare Supplement plan for eligible coverage. This falls under Part B of Medicare.
Is Plan F Going Away in 2020?
- I’m afraid it is. While disappointing as this may be, this does not affect those who have the plan prior to January 1, 2020. Do not be overly alarmed about this. There is a typical scare tactic used by many licensed salespeople used to get you to switch to another plan to get the business. How this effects policy holders of Plan F as of 2020 is going to vary state to state. Some states may see larger rate increases do to an aging block of business that results in losses to the insurer.
While we do find the Plan G to be “top notch” and a better value, if you are happy with Plan F and have a competitive rate on it, our advice is to stick with what you are happy with. Some people just don’t like tracking their doctors bills and the additional cost is worth it.
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? Maybe. There are other Medicare Supplements that perform similarly and provide better value as well.
Yes, as of January 1, 2020, Medicare will be phasing out the Plan F and Plan C from the standardized Medigap plans currently offered to Medicare beneficiaries. That is when the new MACRA laws take effect. Those who have the coverage prior may keep their Plan F. Those changes will more than likely result in a higher claims experience for the foreseeable future. This will be due to a progressively aging block of business that becomes smaller each year. You should expect higher than normal rate increases as the aging block of business (Plan F policyholders) causes a loss to the insurer. There just will not be any “younger blood” entering into the mix to balance the overall health decline in the block of business. Be aware of this. Consider if you have the funds at your disposal for years down the road in case the premiums start to rise faster.
Certain states do not allow an insurer to just raise rates on a particular plan letter and this will minimize any shocking increases. Give us a call to see how your state handles rate increases.
Whatever you decide, always think of supplemental insurance 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 get 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. Take a look at 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, let us and others know. Always feel free to make a comment to advising 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 or unsure of yourself. 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. 800-598-6445