The federal Medicare program is a series of lettered (A, B, C, and D) medical insurance plans available to people, age 65 and older, and certain adults with qualifying disabilities. Medicare Part A and B are provided directly by the government, whereas Parts C and D are provided through private insurance companies authorized to sell these plans.
There is one more part of Medicare that has lettered plans, Medigap, also known as Medicare supplement insurance. One of these is Plan F. Medigap policies, as their name implies, help cover the gaps in traditional Medicare coverage.
Why You Need a Medigap Plan F Policy
Most people know a little about Medicare Part A and B, often called Original Medicare, but not much about the other options available to them. Medicare Supplement Plan F is also referred to as Medigap Plan F. It is a supplemental policy that you can buy from a private insurance company. It is only available to recipients of Original Medicare who want the additional insurance coverage needed to help pay for their share of the costs.
Original Medicare pays for about 80 percent of your major medical costs. A Medigap policy can be used to cover various parts of your 20 percent share (e.g., deductibles, coinsurance, and copays). Medicare Supplement Plan F covers all the gaps in Original Medicare.
NOTE: The correct terminology is Plan F, not Part F. Here is an easy way to remember. Only Medicare uses Parts (A, B, C, and D). Private insurance companies sell Plans.
Who is Eligible?
Right now, you are only eligible to apply for a Medicare Supplement Plan F policy if you first became eligible for both Medicare Part A and B prior to January 1, 2020. If you become eligible after that date, Medicare Plan G is the best Medicare supplement insurance policy you can get. Another popular option is Medicare Supplement Plan N.
What Do I Need To Do?
Once your turn 65, you have a 6-month open enrollment period available to you to sign up for a Medigap plan. You must also have Medicare Part B to enroll. Different companies offer these policies in each state, but they cover the same standardized expenses.
Important Facts About Medicare Plan F:
- It’s important to note that Medicare supplements are not standalone policies. You must have both Medicare Parts A and B to qualify.
- You pay for your Medicare Part B and Medigap separately. If you or your spouse did not work the full 40 quarters (10 years) required, you will also pay for your Part A coverage.
- Each person needs their own Medicare supplement policy. These policies only cover one person. However, many companies offer a household discount.
- Medicare Plan F is offered through private insurance companies and only those authorized to sell in your state can provide this policy.
- Health problems do not disqualify you from a Medigap policy if you enroll during your 6-month individual enrollment period. During this period, you have guaranteed issue rights and cannot be turned down. You may continue to renew these indefinitely if you pay the monthly premium.
- If you have a Medicare Advantage plan it is illegal for an insurance company to sell you a Medigap plan. The only exception is if you are going back to Original Medicare.
What does Medicare Plan F cover?
You’ll need to investigate the different Medigap plans to determine the right one for you. The comparison chart below will help.
Medicare Plan F provides the same healthcare coverage from state to state. In general, you can use it to cover the copayment for all medical costs (e.g., doctor visits, specialists, lab tests, diagnostics, etc.) and even the Medicare Part B deductible.
Another benefit covered by Plan F is Part B Excess Charges. These occur when your doctor or specialist does not accept the standard Medicare payment for a service. Medicare allows healthcare providers that do not accept Medicare assignment to charge up to 15 percent more. Without Plan F, you will pay these costs out-of-pocket.
Plan F also covers your big costs if you are admitted as an inpatient in the hospital or a skilled nursing facility. Your Medicare benefits cover these costs under Part A, but most people are taken by surprise when they see the per-benefit-period deductible. Plan F is one of these insurance plans that protect enrollees from these high out-of-pocket expenses.
Here’s a side-by-side comparison chart:
NOTE: There is also a High-Deductible Plan F. If has all of the same features and benefits as the normal plan, but you pay all costs until the annual deductible is met. The deductible changes annually. For more information, visit Medicare.gov.
What is excluded from Medicare Plan F?
Medicare Part F does not cover vision, dental, long-term care, hearing aids, or private nursing services. International coverage is excluded from Medicare Part F. Additionally, most plans do not cover prescription drug costs either.
How much does Medicare Plan F cost?
Costs vary from person to person. The price of a Medicare Plan F policy is determined based on your age, location, gender, and use of tobacco. National averages are around $300 per month, but in many areas, rates start as low as $125 per month. For the high deductible version, you may pay as little as $68. Health insurance companies will be able to help you determine eligibility and costs for the different Medigap policies.
IMPORTANT: Many people try to compare the cost of Medicare supplement insurance plans with a Medicare Advantage plan (Part C). The two types of insurance are as different as apples and oranges. With a Medigap plan, you pay for most of your medical services in advance through your monthly premiums. With a Part C plan, you pay most of your costs through copays and coinsurance when you use healthcare services. Both offer comprehensive coverage, but a Medicare supplement gives you peace of mind and helps you plan for your healthcare expenses. If you still have questions about how these plans differ, your insurance agent can walk you through the costs and covered services.
What are the different parts of Medicare?
- Medicare Part A covers hospital stays and expenses.
- Medicare Part B covers the coinsurance and testing associated with doctor’s visits.
- Medigap plans are listed as A-N. Medigap Plan C, E, F, H, I, and J are no longer available to new Medicare beneficiaries. As of 1 January 2020, if you have both Medicare Part A and B you can get a Medigap Plan A, B, D, G, K, L, M, or N. The most popular plans are G and N.
- Medicare Part C is the Medicare Advantage plan program. These plans are not compatible with Medigap plans.
- Medicare Part D is a prescription drug coverage plan option that is compatible with all Medigap plans.
The Big Differences Between Medicare Plan F and Medicare Advantage Plans
Medicare Plan F is not a Medicare Advantage plan, which replaced your Medicare Part A and B benefits with private insurance. A Plan F supplement works alongside your Original Medicare. Many people ask “Are Medicare Supplement Plans Worth It?“, because they appear to cost more. The answer is most definitely, yes, they are worth every penny.
On the surface, Medicare Advantage plans look great. The monthly premiums are low (some cost you no additional money) and most plans offer additional benefits, including prescriptions, dental, vision, and more. But, the catch is that you pay more when you use services. In fact, the Kaiser Family Foundation conducted a study and found that most people with a Medicare Advantage plan pay more for a hospital inpatient stay, not less.
Also, unlike most Medigap plans, Medicare Advantage plans do not cover you when you travel. You’re covered for emergencies inside the United States and its territories, but you and not covered at all for foreign travel. With most Medigap plans, including Plan F, you are covered up to the limits of the policy.
Prescription drug coverage is not offered through Medicare Plan F but it is available as a stand-alone Medicare Part D plan. Basic prescription drug plans start at less than $20 per month in most areas.
One of the main reasons people love Medicare Supplement Plan F is that it covers all of your big expenses completely. Medical expenses can add up quickly especially if you have a long hospital stay or surgery. The ability to cover the 20 percent gap is appealing to many seniors. While it may cost a couple of hundred dollars a month, it can save you tens of thousands of dollars in medical bills over a lifetime.
Take cancer treatment for example. Some treatments can cost as much as $2 million. This would leave Medicare recipients responsible for $400,000 worth of medical bills. For just a few hundred dollars a month, some or all of this amount could be covered with the right gap plan.
Medicare Plan F vs. Plan G: Which is Better?
If you can’t get Plan F, because you got your Medicare benefits after 1 January 2020, or you’re comparing the cost of Plan F vs. Plan G, here’s what you need to know. There’s just one benefit that separates Plan F and Plan G, the annual Medicare Part B deductible. In most cases, a Plan G premium, plus the annual deductible, costs less than a Plan F policy, sometimes as much as $100 or more. You can learn more about Medicare Plan F vs. G here.
Massachusetts, Minnesota, and Wisconsin
There are three states that do not follow the standardized plans organized by Medicare, Massachusetts, Minnesota, and Wisconsin. These three states have their own standardized plans, which start with a base plan and additional riders to cover different gaps.
- Do I really Need Supplemental Insurance with Medicare?
- What is the Best Medicare Supplement Insurance Plan?
Citations & References:
- How to compare Medigap policies | Medicare
- Medicare.gov: the official U.S. government site for Medicare | Medicare
- Find Healthcare Providers: Compare Care Near You | Medicare
- Home | State Health Insurance Assistance Programs
- Home | State Health Insurance Assistance Programs
- F, G & J Deductible Announcements | CMS
- Medigap (Medicare Supplement Health Insurance) | CMS
- 2020 Medicare Parts A & B Premiums and Deductibles | CMS