What if there was one plan that could help pay for many of the out-of-pocket expenses that come with having Original Medicare? With Medicare Supplement Plan F, there is. Original Medicare is a government health insurance program that combines benefits for Part A hospital insurance and Part B medical insurance. These benefits don’t cover all your healthcare costs. This is where Medicare Supplement insurance, also called Medigap insurance, comes in. It’s sold through private insurance companies to help you pay for Medicare out-of-pocket costs like deductibles, copays, and coinsurance. But not all Medigap plans are alike. Some offer less coverage and some offer more. Medigap Plan F is a plan that gives you more. But like the saying goes, having more comes with more responsibility. This article provides a comprehensive look at Medicare Plan F to help you decide if more benefits are what you need.
What Is Medicare Supplement Plan F?
Medicare Supplement Plan F is one of 10 standardized Medigap plans available to people enrolled in both Medicare Parts A and B. Standardized means that plans are designed to offer the same benefits regardless of where you buy, except in Massachusetts, Minnesota, and Wisconsin where plans are set up differently. Medicare Plan F is the most popular Medigap plan because it provides the most comprehensive coverage to fill the gaps in Original Medicare. According to the Association for Medicare Supplement Insurance, 66 percent of Medicare beneficiaries choose Plan F.
Medicare Plan F also comes with a high deductible option that provides the same levels of coverage. This option may be best if you’re looking to lower your monthly premium. But high-deductible Plan F, also known as Plan F+, typically comes at a higher out-of-pocket expense because you have to pay a deductible of up to $2,180 in 2016 for Medicare-covered costs before the plan begins to pay for anything.
Medigap Plan F is the only plan that covers all Medicare Supplement insurance benefits. The following are the benefits available with Medicare Supplement plans. “Yes” means that the benefit is covered at 100% under Plan F.
|Medigap Benefits |
Click to view expanded chart
|Covered Under Plan F||Purpose of Coverage|
|Part A coinsurance and hospital costs up to an extra 365 days after Medicare benefits are used up||Yes||If you’re admitted to the hospital for more than 90 days, you pay $644 in coinsurance for each “lifetime reserve” coverage day you have. Your Medicare benefits are used up when you run out of lifetime reserve days, at which time your Medicare Plan F benefits kick in.|
|Part B coinsurance or copayment||Yes||This benefit helps pay your share of the cost for covered medical services, which is usually 20% of the Medicare-approved amount.|
|Blood: first 3 pints||Yes||Unless blood is donated to you, you pay for the first 3 units of blood you get in a calendar year that a hospital or provider has to buy for you. This benefit helps cover the hospital or provider costs.|
|Part A hospice care coinsurance or copayment||Yes||This benefit helps pay the 5% coinsurance of the Medicare-approved amount for inpatient respite care and/or the copayment of up to $5 for each prescription and other pain relief products you get while under hospice care.|
|Skilled nursing facility (SNF) care coinsurance||Yes||This benefit helps pay the coinsurance amount for days 21-100 of SNF care, which is $161 per day for each benefit period.|
|Part A deductible||Yes||The plan pays your Part A hospital insurance deductible, which is $1,288 in 2016 for each benefit period.|
|Part B deductible||Yes||This plan covers the annual Part B medical insurance deductible, which is $166 in 2016.|
|Part B excess charge||Yes||A provider who doesn’t accept the Medicare-approved amount for a covered service as full payment can charge you extra. Medicare Supplement Plan F is one of the few plans that covers this charge|
|Foreign travel exchange up to plan limits||80%||This benefit has a lifetime limit of $50,000 to help pay the costs for certain emergency care you receive outside the U.S. after you’ve paid a $250 annual deductible.|
|Out-of-pocket limit||N/A||Some Medigap plans have an annual out-of-pocket limit that you must meet before the plan begins to pay all the costs for covered services. This doesn’t apply to Medigap Plan F. An out-of-pocket limit is different from a deductible.|
What Plan F Doesn’t Cover
- Doesn’t provide prescription drug coverage: Medicare Supplement policies sold after January 1, 2006, can no longer cover prescription drugs. And because Original Medicare doesn’t cover prescriptions either, you can only get Part D prescription benefits if you enroll in a Medicare Part D prescription drug plan or buy a Medicare Advantage policy that includes coverage for prescription drugs.
- Doesn’t cover supplemental health benefits: Like other Medigap plans, Medicare Supplement Plan F doesn’t include coverage for things like hearing aids, vision and dental care, long-term care, and private-duty nursing. You can get some of these benefits through a supplemental health insurance plan or through Medicare Advantage, also known as Medicare Part C.
Enrolling in Medicare Plan F
You can enroll in a Medigap plan, such as Plan F in one of 2 ways:
- During the Medigap open enrollment period: The open enrollment period begins the month of your 65th birthday when you’re enrolled in Medicare Part B and lasts for 6 months. This is the recommended time to buy a Medigap policy because you can qualify for any plan that’s sold in your state even if you have health problems. And if you do have health problems, you still get to pay the same price for Medicare Supplement Plan F as a healthy person.
- Outside the open enrollment period: After open enrollment, you have to go through medical underwriting to buy a Medicare Supplement policy. You usually can’t enroll in any policy, including Medigap Plan F, if you don’t meet the insurance company’s underwriting requirements. But there are some situations when you may still be able to get Medigap coverage, such as having a preexisting condition or a guaranteed issue right.
The Cost of Medicare Supplement Plan F
Medicare Plan F usually has the highest premium of all other Medigap plans because it provides the most coverage. Although, your premium could be lower than other plans if you choose high-deductible Plan F. Your premium rate depends on various factors, such as:
- Issue age: An issue-age-rated policy means that the insurance company charges a premium based on your age when you buy the policy. So the premium is usually less the younger you are. And once the policy has been issued, the price cannot go up as you get older.
- Attained age: Companies can issue an attained-age-rated policy, which means that your Medicare Supplement Plan F premium starts off low then goes up as you age.
- Community rate: Insurance companies that use a community-rated pricing system charge the same price for everyone who has the policy regardless of age. Premiums don’t increase with age, but may change due to inflation.
- Your health status: An insurance company can charge you a rate based on your health if your application requires medical underwriting. You generally pay a higher premium if you’re not in good health and less if your health status is good.
- Geographic location: Where you live also determines your premium rate, which varies among different locations. The table below shows a Medicare Supplement Plan F comparison of premium rates for a 65-year-old male based on location. These rates are just examples. Only an insurance company or agency can provide the actual premium for your individual Medigap policy.
|2016 Plan F Monthly Premium for 65-Year-Old Male|
|Location||Highest Premium||Lowest Premium|
|Average monthly rate across different locations||$236||$159|
|New York City (Manhattan)||$444||$218|
|Source: American Association for Medicare Supplement Insurance|
Medicare Plan F Comparison: Plan F Versus Other Plans
To see how Medigap Plan F holds up, it helps to do a side-by-side comparison with other plan options. The chart below shows the percentage rate at which benefits are covered under each plan. Sections with “No” means the plan does not cover that benefit. By doing a Medicare Supplement Plan F comparison, you will notice that Plan C and Plan G are the most similar in terms of the level of coverage available. The only differences are:
- Plan C does not cover Part B excess charge while Plan F covers at 100%.
- Plan G does not cover Part B deductible while Plan F covers at 100%.
You will also notice that Plan K and Plan L provide the least amount of coverage—many benefits are covered at less than 100% and some have no coverage at all. Plus, those plans have out-of-pocket limits.
|Medigap Benefits||Plan A||Plan B||Plan C||Plan D||Plan F||Plan G||Plan K||Plan L||Plan M||Plan N|
|Part A coinsurance and hospital costs up to an extra 365 days after Medicare benefits are used up||100%||100%||100%||100%||100%||100%||100%||100%||100%||100%|
|Part B coinsurance or copayment||100%||100%||100%||100%||100%||100%||50%||75%||100%||100%***|
|Blood: first 3 pints||100%||100%||100%||100%||100%||100%||50%||75%||100%||100%|
|Part A hospice care coinsurance or copayment||100%||100%||100%||100%||100%||100%||50%||75%||100%||100%|
|Skilled nursing facility care coinsurance||No||No||100%||100%||100%||100%||50%||75%||100%||100%|
|Part A deductible||No||100%||100%||100%||100%||100%||50%||75%||50%||100%|
|Part B deductible||No||No||100%||No||100%||No||No||No||No||No|
|Part B excess charge||No||No||No||No||100%||100%||No||No||No||No|
|Foreign travel exchange up to plan limits||No||No||80%||80%||80%||80%||No||No||80%||80%|
|**The plan pays 100% of the costs for covered services for the calendar year after the out-of-pocket yearly limit and yearly Part B deductible has been met. |
***Plan N’s Part B coinsurance is covered at 100%, except for up to $20 in copayment for some doctor’s office visits and up to $50 in copayment for emergency room visits that don’t require inpatient admission.
Other Things to Know About Medigap Plan F
- Can’t have both Medigap and Medicare Advantage: If you have a Medicare Advantage (MA) plan and want to enroll in Medicare Supplement Plan F, you must first make sure you can leave your MA plan before your Medigap coverage begins.
- Can’t have Medigap if you have a Medicare MSA plan: An insurance company cannot legally sell you a Medigap policy if you have an MSA (medical savings account) plan through Medicare.
- Separate premium: The premium you pay for Medigap Plan F is completely separate from the monthly premium you pay for Medicare Part B. Medicare premiums are billed directly through the Medicare program, while Medicare Supplement insurance premiums are billed through the company that sold you the plan.
- Guaranteed renewable: Medicare Supplement policies, including Plan F, are guaranteed renewable regardless of any health problems you may have. As long as you pay your premiums on time, an insurance company cannot cancel your policy.
- Covers one person: You can only buy a Medicare Supplement policy for yourself. Your spouse would have to buy his or her own policy to get Medicare Plan F coverage.
- No networks: You can use your Plan F or Plan F+ coverage nationwide at any provider that accepts Medicare.
Is Medicare Supplement Plan F Right for You?
There are pros and cons with any Medigap insurance plan. The main advantage of having Medicare Supplement Plan F is you get coverage for all the Medigap benefits—some of which only a few other plans cover. For instance, Medigap Plan F is the only Medicare Supplement plan that covers both your Part B deductible and Part B excess charge. You can pay an excess charge of up to 15% more than the Medicare-approved amount to a provider who doesn’t accept Medicare assignment. An assignment is when a provider accepts the Medicare-approved amount as full payment. While most providers accept assignment, there are some who don’t accept assignment for all services covered under Medicare.
But as mentioned earlier, having the most comprehensive coverage often means paying a higher monthly premium than you would with other plans—unless you go with the high-deductible Plan F option. If you do choose this option, there’s still that $2,180 (in 2016) deductible to think about. So deciding if Medigap Plan F is right for you may not be as easy as pie. One way to look at it is like this: Would you rather pay a specific monthly premium (and deductible if applicable) to get the most coverage, or not know how much you may pay out-of-pocket for certain expenses like excess charges?
Of course, there are other ways to decide if Plan F is the best fit. And the good news is that you don’t have to figure things out on your own. A knowledgeable licensed insurance agent at HealthMarkets can help you decide if Medicare Supplement Plan F is the best Medigap plan to meet your needs. Just call us at (800) 488-7621 to speak with one of our licensed insurance agents or meet with an agent in person in your area today!