Why Medicare Is Discontinuing Plan F
In April 2015, Congress passed the Medicare Access and CHIP Reauthorization Act to reduce some Medicare expenses. As part of that act, from January 1, 2020, insurers couldn’t sell a policy that covers the annual Medicare Part B deductible to new Medicare beneficiaries.
This ruling effectively meant insurers couldn’t offer Plan F or Medigap Plan C to people who become eligible for Medicare after January 1, 2020, because both plans cover the Part B deductible.
Beneficiaries who already had Plan F or Plan C before January 1, 2020 are able to keep their plan. If someone became eligible for Medicare before 2020, they can still apply for Plan F or Plan C if either plan is available where they live.
How Does Plan F Differ From Other Medicare Supplements
Plan F is different from every other Medicare Supplement because it has no deductible. Plan G, or the plan with the next highest coverage, does not pay for the Medicare Part B deductible.
The Medicare Part B deductible is the only difference between Plan F and Plan G.
That deductible isn’t much, either â it’s only $185 in 2019 and $198 in 2020.
However, that small difference is what caused a lot of discussion and controversy, and it eventually led to Congress passing MACRA in 2015, or the bill that is causing Plan F to be phased out in January 2020.
What Is Medicare Plan F
Medicare Plan F is a supplemental Medigap health insurance plan that is offered to individuals who are disabled or over the age of 65. Known better as simply Plan F, the policy is the most comprehensive of the 10 Medigap plans offered in each state. Plan F is a supplemental policy to the standard Medicare parts A and B plans and can fill many of the gaps of standard Medicare policy and provide broader assistance with out-of-pocket costs. However, not all health insurance gaps will be covered by Plan F.
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Plan F Provides Comprehensive Coverageat A Cost
Because Plan F covers the annual Part B deductible, members of the plan are free to visit doctors, hospitals, and other healthcare providers as often as theyd like, with no out-of-pocket costs.
This means insurers pay out more for claims for Plan F members than they do for members of other plans that require some degree of cost-sharing, such as copays and coinsurance.
Which makes sense, of course. If you have to pay a small copay of, say, $20, youll probably not go to the doctor for every little ache, pain, sniffle, and sneeze .
In order to maintain solvency, insurers have to account for the risk pool of any given plan the combined overall health of all members on a specific plan and how often theyre making use of the plan and filing claims.
Its why Plan F is the costliest of Medicare Supplements, with that cost likely to continue rising.
And with Congress discontinuing Plan F in 2020 , the risk pool will cease growing at the same time as those within continue aging and experiencing declining health.
A smaller risk pool comprised of those with diminishing health and increasing healthcare costs will contribute to an increase in Plan F premiums, so its wise to understand what other Medicare Supplements offer in terms of coverage vs. cost.
What Is The Difference Between Plan C And Plan F
The only difference in coverage between the Supplement Plan F and Plan C is that Medicare Plan C does not include Medicare excess charge coverage. Some insurance companies decide to promote Supplement Plan C and others decide to promote Plan F–they are so similar, they are basically interchangeable.
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Medigap Supplemental Plans Pick Up Where Medicare Leaves Off But There Are Many Differences And Exclusions Among The Plans Here Is A Sample Of Some Of The Most Popular Benefits And What Is Covered
Yes = the plan covers 100% of this benefit No = the policy doesn’t cover that benefit % of the benefit covered
Some insurance experts are warning people who are already in Plan F and its closest cousin, Plan G, to brace themselves for price increases.
After the change, Plan G will survive as the most comprehensive plan for newcomers. It is identical to Plan F with one exception: People must pay Medicares deductible before insurance coverage kicks in each year. This year, the deductible is $185. About 27% of people in supplements are now in Plan G, according to CSG Actuarial.
Prices arent expected to soar immediately. In fact, some insurance companies have been cutting premiums recently in both Plan F and Plan G to lure customers in advance of changes. But insurance experts warn retirees that as insurance companies adapt to government-imposed changes after 2020, people in both Plan F and Plan G could be shaken by rate increases.
So people choosing supplements now are being advised to pick deliberately so a price shock doesnt upset their budgets later.
Paying the deductible now seems fairly painless, and financial planners already have been urging clients to select Plan G as a bargain compared with Plan F. But there is a question about whether Plan G will remain a bargain as the 2020 changes play out.
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Why Is Plan F Disappearing
As one of the most popular supplemental plans, its shocking that Plan F is suddenly going away.
Many Medicare subscribers were shocked when Congress announced sweeping changes to Medicare supplements. These changes arent uncommon theyve actually happened almost every decade, with former Medicare parts E, H, I, and J eliminated in 1990 and 2010². So, just 10 years later, two more parts of Medicare are being axed.
Plan F are part of a larger plan to fix Medicare gaps. For years, doctors have lobbied the federal government to close pay gaps. Many doctors who took on Medicare patients lost income or, even worse, werent fairly paid for their services. So, in 2015, Congress passed the Medicare Access and CHIP Reauthorization Act thats meant to close the doctor payment gap.
The good news is this legislation will motivate more doctors to stay in the Medicare program. And that means more seniors can continue to see their regular doctors and the doctors will accept Medicare plans.
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Medicare Supplement Plan F Providers In 2021
- Best for Extras: Humana
- Best in Educational Information: Cigna
- Best in Price Comparison: AARP
- Best for Simplicity: Aetna
- Best for Ease of Use: Mutual of Omaha
Not eligible for Medicare Plan F? Medicare Plan G is the new Medicare Plan F, offering nearly the same benefits as Plan Fthe only difference is Part B coverage.
In addition to covering everything included in Medicare Parts A, B, and C at a low cost, Humanas Plan F offers extensive extra benefits. These include a SilverSneakers fitness plan and household discounts if more than one person in your household has a Medicare Supplement Plan with Humana.
Helpful information breakdown on the Plan Details page
$0 deductible available
$0 visits to specialists, no referrals needed
Discounts available for multi-policy households
Discounts on additional services such as hearing aids or eyeglasses
Required to enter zip code before comparing different plans
App receives average ratings for iOS app
Humanas process to determine your personal estimates requires a few too many clicks, but once youve navigated to where you need to be, all information relating to the Plan F plan is clear and easy to understand. There isnt much point in comparing costs herePlan F has a $0 deductible at the regular level.
Humana is also highly raked with AM Best, with an Excellent rating of A-.
Medicare Plan F does not cover ear or eye care, so these are not additional benefits that you can find with every provider.
Are Medicare Plan F Rates Changing
There are two types of Plan F coverage options: a standard option that requires a monthly premium, just like any other Medicare supplement insurance plan. The other option is a high-deductible plan with a lower monthly premium. With the high-deductible Plan F option, you must pay your entire deductible amount before the plan will cover any associated healthcare costs.
The deductible for the high-deductible Plan F goes up every year. The Centers for Medicare and Medicaid Services explains that the exact amount the deductible increases is determined by the Social Security Act. That amount from 2020 to 2021 was 2.5%, which makes the 2022 deductible for Plans F, G, and J $2,490.
For the standard Plan F , monthly premium rates are set by the individual private insurance companies. Costs vary based on your age, gender, tobacco use, state of residence, and how the plan is rated.
Both the standard and high-deductible plans include a $250 annual deductible for foreign travel emergency healthcare coverage.
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Why Is Medicare Plan F Being Phased Out
Although Plan F is the most popular Medigap plan, that is likely to change in coming years. Federal legislation passed in 2019 changed the eligibility rules for Plan F and Plan C, making them only available to those who became eligible for Medicare before January 1, 2020.
The reason for the change was to end Medigap coverage of the Part B deductible, for which Plan F and Plan C are the only Medigap plans to provide coverage. The rationale is that if a beneficiary does not have to pay anything out-of-pocket to see a doctor, they might visit the doctor for every minor issue and further overwhelm the health care system by virtue of over-utilization.
Stripping away coverage of the Part B deductible forces all beneficiaries to be more invested in their coverage, which may make beneficiaries think twice about making a doctors appointment for small health issues.
What Does Medicare Plan F Cover
Oftentimes, your income decreases after retirement. If youre living on a fixed income, choosing a Medicare Supplement insurance plan with the most benefits can reduce what you pay for healthcare.
In most cases, Medicare Supplement Plan F results in $0 out-of-pocket because it pays all the gaps in Original Medicare.
Plan F covers all of the following expenses:
- Part A hospital deductible
- Medicare Part B 20 percent coinsurance and copayments
- Coinsurance for services in skilled nursing care facilities
- Coinsurance and copayments for hospice care
- First 3 pints of blood
- Part B excess charges
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How Discontinued Medigap Plans Impact You
If you’re a current Medicare beneficiary and want your Medigap plan to pay for the Medicare Part B deductible, it may be worth considering enrolling in Medigap Plan F or Medigap Plan C before the year 2020.
Unless new plans are added, most newly eligible Medicare beneficiaries in 2020 will only have 8 Medigap plan options to choose from: Plans A, B, D, G, K, L, M, and N.
If you’re a new Medicare beneficiary starting in 2020, you will not be able to enroll in Plan F or Plan C and will not have coverage for the Medicare Part B deductible benefit. This means you will have to pay the Medicare Part B deductible out of pocket. If you use Medicare Part B services, you must pay the $198 annual deductible in 2020. The Part B deductible may increase in future years.
Esposito thinks that it’s possible that the Part B deductible will increase at a higher rate than we are used to seeing especially due to the recent increase.
How Much Does Medicare Supplement Plan F Cost
Because of its comprehensive coverage and because fewer new Medicare beneficiaries will be able to enroll in Plan F going forward, the cost for Plan F may rise to be higher than other Medicare Supplement plans, though plan availability and pricing can vary from one location to the next.
Medigap costs can be influenced by a number of factors, such as your age and gender and the timing of when you apply for Plan F.
If you apply for Medigap Plan F outside of a period when you have a guaranteed issue right such as during your Medigap open enrollment period your health could potentially affect your monthly plan premiums. When you dont have a guaranteed issue right, a Medicare insurance company can use medical underwriting to determine your Medicare plan policy premiums. When a policy is underwritten, it means the insurance company can ask you a series of health questions to determine your plan costs or whether to deny you coverage altogether.
You could also potentially have a guaranteed issue right if your current Medigap plan is cancelled through no fault of your own, or if you move to a new address thats outside of your current plans service area.
Some Medicare Supplement insurance companies may offer Medigap plan discounts for non-smokers, married couples and for other reasons, so be sure to shop around and to ask about any potential discounts you may qualify for.
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Best For Ease Of Use: Mutual Of Omaha
Mutual of Omaha
Mutual of Omaha is the best company to go with for a quick and painless experience signing up for Medicare Supplement Plan F. It takes hardly any time or effort to get an array of estimates for Plan F and other Medicare Supplement plans.
Smooth, clean website with easy-to-follow instructions
Detailed information not required to get an estimate
High percentage increase of monthly premium
Mutual of Omaha gets to the point. All of the different Medicare supplemental insurance coverage options, including Plan F, are listed on the same page when you start your estimate process. All it needs to know is your gender, birth date, and ZIP code before generating an estimate for you.
Unfortunately, Mutual of Omaha is recognized as a provider with high premiums and increases year over year. In most cases, expect to pay a bit more than with other choices.
Is Medicare Supplement Plan F Worth The Price
Medicare Supplement Plan F provides the most comprehensive coverage out of all 10 plans available to Medicare recipients, but its also the most expensive. Read this post to learn if its worth the price.
Of the 10 Medicare Supplements available, Plan F is the most popular of the entire alphabet soup of Medigap plans. Touted as the Cadillac of Medicare Supplements, nearly 60 percent of individuals who purchase a Medigap or Medicare Supplement insurance plan choose Plan F, according to the American Association for Medicare Supplement Insurance.
What makes Plan F so popular and enticing?
Plan F provides total coverage that leaves members with zero out-of-pocket expenses, and even covers the annual Medicare Part B deductible of $183 in 2018.
The only costs to Plan F members are the monthly Part B and Plan F premiums the latter of which is Plan Fs only downside.
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Find Cheap Medicare Plans In Your Area
Medicare Plan F provides the most benefits out of all the supplemental Medicare plans available and can help reduce your out-of-pocket expenses. The policy is designed to address most of the coverage gaps in Medicare parts A and B. For this reason, many people covered by the standard Medicare policies are willing to pay the extra monthly premium to purchase Plan F.
You may purchase this plan directly from health insurance providers during the Medicare open enrollment period. Like other health insurance policies, premiums for Plan F are tax-deductible. However, new enrollees who become eligible after January 2020 will be unable to purchase a Plan F policy.
What Is Covered Under Medicare Supplement Plan N
Medigap Plan N is the step-down option for Plan G. It offers the same basic services as Plan G, including Part A deductibles, copays, and coinsurance. However, it requires you to pay the Part B deductible and a portion of copay costs associated with doctor and emergency room visits that are not covered by Part A. Furthermore, doctors that do not accept Medicare assignment may assess you excess charges. See the table below for the additional costs associated with Plan N that are considered covered under Plan G.
|Excess charges||Up to 15% of what Medicare approves for services|
Periods of observation are not considered an inpatient admission. Observations at an emergency room fall under Part B and would have a $50 copay, but an inpatient admission would not. Always remember to ask if the hospital is admitting you as an inpatient or just keeping you under observation if you have concerns about the billing.
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Can You Enroll In Medicare Supplement Plan F Insurance
Medicare Supplement Plan F is no longer available to people newly eligible for Medicare. You had to be eligible to enroll in Medicare before January 1, 2020, to purchase a policy.
You may be able to apply for a Medicare supplement policy if you were eligible for Medicare before January 1, 2020, and if a company offers the plan. Insurance companies do not have to sell all Medigap policies.
People who had a Medicare Supplement Plan F prior to the phase out can generally keep their plan.
Medigap Plan G now provides the most comparable level of benefits to Medicare Supplement Plan F.
Medigap Plan G also offers a high-deductible version in some states. You have to pay $2,490 in out-of-pocket costs before Plan G pays anything in 2022.
Eight Medigap plans are currently available, but none cover your Medicare Part B deductible. You should compare all available Medicare Supplement plans in your area to determine the best one for your health and financial needs before purchasing one.