Medigap Plan F
For many years the Medicare Supplement Plan F has been the most popular Medigap plan on the market. I fully understand why, it paid for everything, but now that is not in your best interest. Keep reading to get the full story and you can give us a call at 844-528-8688 for a personal explanation. There is never a fee for our services.
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Many years ago, people that had group health insurance from work were used to the insurance covering all medical expenses, and having no out-of-pocket expenses. As you probably now know, those days are long gone for the majority of people. Baby Boomers have seen the health insurance change to plans with higher deductibles and more out-of-pocket costs, as companies struggle to keep the premiums low.
Lowering Medicare Supplement Costs
Much like the under 65 health insurance providers, medicare supplement companies and Medicare are also moving away from "First Dollar Coverage" in an effort to change peoples habits. The idea of going to the doctor changes a bit if someone has to pay a co-pay or deductible vs having the "FREE" visit.
With this in mind Congress is going to eliminate all Medicare Supplement Plans that cover the Part B deductible. For Wisconsin Medicare Supplement Plans this means that the Part B deductible rider will no longer be available. This is done with the Medicare Access and Chip Re-authorization Act of 2015, you can read the full report here.
To keep your Medicare Supplement cost down, you need to be looking at a plan G or Medicare Supplement Plan N. You will have some out-of-pocket costs but overall your expenses will be much lower due to the lower premium.
Much like the way group or employer plans have tried to lower costs, by the insured taking some of the risk, you can lower your Medicare Supplement premiums by taking on some of the risk yourself.
Plan F Going Away
As of 2020 Plan F is going away for most new Medicare enrollees. The people that now have a Medicare Supplement Plan F will not lose their coverage or have to change, but no new blood will be entering into the plan.
In the insurance world, "new blood" is what keeps premiums low, it is the principle fact of the healthy offsetting the cost of the unhealthy.
I cannot see into the future but, if history teaches us anything, with no new healthy people going into the Medigap plan F, the rates will just continue to rise.
Medicare Supplement Plan F | What is it?
To put it simply a Medicare a Medicare Supplement Plan is the plan where you will never see a bill from the doctor. When you talk to friends and family that are on Medicare, and they say "I never see a bill" they have a Plan F. If you are Wisconsin, the same statement would mean that you have the Base + all the riders.
People love this plan, especially the younger of the Baby Boom crowd. The fact is even tho it sounds like a fantastic deal, is that it is not the most financially sound plan.
Medicare Supplement Plan F Costs
The cost or premium of a Plan F is hard to answer, it varies greatly where you live and how old you are. The average cost would be somewhere in the $140.00 - $170.00 range without any type of household discount, again this varies by what state you live in.
This cost is the result of the plan paying for all costs associated with Medicare such as:
- Medicare Part A deductible
- Medicare Part A coinsurance
- Medicare Part B deductible
- Medicare Part B coinsurance
- Part B excess charges
- Foreign Travel
The piece that makes the most difference in pricing is the part B deductible. Plan F pays this cost ($183.00 2018) and the insurance company typically charges $300-$400 per year more for this benefit, than on plans that do not cover it.
While the thought of having an insurance plan cover all the costs, it is normally not the most cost effective way to cover Medical costs.
Is Plan F the Best Medicare Supplement Plan
I say no, in my mind the best Medicare Supplement is the one that gives you the most benefits for the least amount of premium dollar. Plan F is not that plan, it is a feel good plan, in the sense that you do not have any cost other than premium but if you do the math over a year of costs, it does not stack up.
The simple fact is a Medicare Supplement plan F, zip code 66101 is $1812.12 annually and a Plan G is $1441.44 which is a difference of $370.68, the only difference is that plan F pays the $183.00 deductible and plan G you pay it.
You are paying in the above example you are paying an insurance company $370.68 to pay a $183.00 yearly deductible, that is one expensive stamp to mail the check.
People tend to get locked into the thought that no bills is good and never actually do the breakdown. Now I fully understand that Medicare is "Greek" to most people and it should be the agents responsibility to explain all your options.
If you understand the facts and you think that a Medicare Supplement Plan F is the fit for you, than that is fine. At the end of the day, the best Medicare Supplement Plan is the one that you are comfortable with.
What Happens When Plan F Goes Away?
If you currently have a Medgap plan F, or you get one before the moratorium, you will not be forced to change plans. The plan will not be offered to people who are new to Medicare but you can keep it if you wish.
As I discussed earlier you might want to look at switching plans if you are able, do to possible rate increases that could happen due to no new enrollments.