Medicare Advantage

Medigap Plan F – Guide To This Popular Supplement Plan

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Understanding Medigap Plan F Options For 2018

When you’re browsing your options for Medicare, you may find that original Medicare, while offering a host of benefits, often falls short. Original Medicare, part A, and B is a great baseline plan for seniors, but it can also leave you with high out-of-pocket costs. That’s where Medicare supplemental policies come in, and why they’re often becoming something that new Medicare enrollees jump into right away. Also referred to as Medigap plans, this type of coverage picks up some of the costs that you would otherwise have to cover out of your own pocket.

There are 10 Medigap plan types, labeled A through N, and each lettered plan covers the same benefits across all carriers and states – except for Wisconsin, Massachusetts, and Minnesota, which standardize their plans differently. In other words, if you buy Medigap Plan A in Washington, it’ll look the same as Plan A in Nebraska. The cost will vary by carrier, where you live and other factors, but plan benefits will always look the same since they’re set at the federal level in all but three states.

You’ve got plenty of choices when it comes to supplementing your original Medicare coverage, in fact, it is the largest growth area for the health insurance industry. More insurance carriers are moving into the Medicare and Medigap market, which is in complete contrast to the ACA (Affordable Care Act) market.

From basic benefits under Plan A to more robust coverage under other letter types, you’ll find a plan from many carriers that fits your budget and gives you peace of mind about out-of-pocket costs. But when it comes to complete coverage, Medigap Plan F is the winner. Here’s what you need to know about Medigap Plan F and how it can boost your medical coverage.

What Medigap Plan F Covers

Medigap Plan F covers everything that you can buy from a Medicare supplemental policy. It’s the most comprehensive option among the 10 Medigap plan types, and it tends to be the most popular policy despite its higher monthly price tag. If you need a lot of medical care or have a chronic condition to manage, and you prefer original Medicare over Medicare Advantage, then having Plan F in place will give you peace of mind. Medigap Plan F covers:

  • Medicare Part A deductible
  • Medicare Part A coinsurance and coverage for hospital benefits
  • Coinsurance for skilled nursing facility care
  • Coinsurance or copayments for hospice care
  • Medicare Part B deductible
  • Medicare Part B coinsurance or copayments
  • Medicare Part B excess charges
  • The first three pints of blood in a medical procedure
  • Foreign travel emergencies up to plan limits

Original Medicare covers a good portion of your hospital and medical care, but there are gaps in the plan that may leave you with hefty bills. Medigap supplemental policies bridge these gaps, and Plan F is particularly valuable since it covers all of your out-of-pocket costs. Notably, Plan F covers Medicare Part B excess charges.

Medicare Part B Excess Charges

Only two Medicare supplemental policies cover Medicare Part B excess charges: Plans F and G. What are these excess charges, and are they really a big deal? For some people, they can be. Medicare Part B covers a broad range of medical services, everything from routine trips to the doctor and annual vaccines to second opinions about surgery and clinical research. But it doesn’t cover everything, and there are limits to how much your plan will cover.

Under original Medicare, you’re responsible for about 20 percent of the Medicare-approved amount for covered medical services. “Medicare-approved amount” is the key phrase here. Medicare determines ahead of time how much it considers acceptable for varying services. An office visit with your doctor, for example, might cost $150 according to Part B. If your doctor accepts assignment – meaning she has a written agreement with Medicare to uphold their pricing structure – then you would pay 20 percent of that $150; Medicare Part B covers the other 80 percent.

In that scenario, you’re paying $30 out of pocket for an office visit. If you have any Medigap policy, then the plan will cover that $30 for you (with limits under Plan N). If you have Medigap Plan F (or Plan G), then any excess charges will be covered as well.

Part B excess charges come into play when your doctor, hospital, physical therapist, counselor or any other provider doesn’t accept the assignment. Original Medicare is widely accepted nationwide, but not every provider accepts the assignment. They might accept Medicare, but they don’t have a written agreement with Medicare to honor the set pricing structure. Medicare allows these providers to charge a certain percentage above the Medicare-approved amount. But there is a limit. It’s called the “limiting charge,” and it allows non-participating providers (those who accept Medicare but don’t accept assignment) to charge up to 15 percent on top of the Medicare-approved amount for covered services.

Let’s say that your doctor accepts Medicare but doesn’t accept the assignment. Instead, she charges $170 for an office visit, which is below the 15 percent limiting charge that Medicare allows but higher than the amount that you’d pay if she accepted the assignment. Because Medicare will only cover 80 percent of the amount that it approves ($150), that leaves you with your $30 copay plus the additional $20. That $20 is the Part B excess charge.

Part B Excess Charges:

Example Scenario For Part B Excess Charges For 2018

  • You visit your doctor for flu symptoms. Your doctor, who does not accept Medicare assignment but does accept Medicare, charges $220 for an office visit.
  • Medicare Part B covers 80 percent of the Medicare-approved amount for medical care. In this example, they’ve decided that $200 is an acceptable amount for an office visit. Medicare will pay for 80% of $200, or $160.
  • You will owe your standard Part B coinsurance (20%) plus the difference between what Medicare covers and what your provider charges. This difference is known as a Part B excess charge.
  • Total out-of-pocket cost to you: $40 (20% of $200) + $20 (excess charge) = $60

One extra charge here and there probably wouldn’t break your budget, but imagine if you always had to pay the Part B excess charge. Maybe you live in an area with limited access to specialists who don’t accept assignment, or your primary doctor just doesn’t agree with Medicare’s pricing structure. In these situations, the Part B excess charge would add up quickly.

Medigap Plan F covers the Part B excess charges along with your Part B coinsurance and Part B deductible, leaving you with no out-of-pocket costs for medical care other than the monthly premium for the plan itself. If you visit a doctor often or need a lot of care, then Plan F provides excellent coverage.

2018 Rates For Medigap Plan F

Medigap Plan F tends to cost more than other Medigap policies because it covers more. The rate chart below compares monthly premium rates for Medigap Plan F, using three of the top Medicare supplement carriers in the country: AARP/United Healthcare, Blue Cross Blue Shield (operating as Anthem in some states) and Mutual of Omaha. Pricing will always vary based on where you live, your age and sex, and other factors, including your health history, depending on when you sign up for Medigap. Some companies charge different rates based on gender, which we’ve indicated with (M) for male and (F) for a female in the rate chart. Certain states, like Montana, don’t allow gender-based rating.

For a better idea of what you might pay for Medigap Plan F, get a personalized rate quote based on your information. To give you an idea of the costs, we’ve compared rates for a 67-year-old person who doesn’t use tobacco.

Estimated Medigap Plan F Monthly Premium
State AARP / United Healthcare Blue Cross Blue Shield Mutual of Omaha
Alabama $153.30 $194.00 $147.85 (M) | $134.27 (F)
Arkansas $206.75 $166.40 $175.90
Delaware $156.80 $168.97 $197.61 (M) | $171.92 (F)
Florida $211.42 $205.60 $207.55 (M) | $191.85 (F)
Kentucky $159.25 $203.19 (M) | $193.52 (F) $207.05 (M) | $182.21 (F)
Maine $224.75 $189.48 $239.35
Missouri $219.75 $237.22 (M) | $214.54 (F) $201.37 (M) | $188.19 (F)
Montana $150.50 $155.33 $157.51
South Dakota $153.47 $217.50 (M) | $192.40 (F) $178.04 (M) | $161.85 (F)
West Virginia $155.40 $167.00 $152.26 (M) | $134.75 (F)

Note that in some states, like Montana and Florida, you may not see much of a difference in monthly premium costs among the different carriers. In others, such as Arkansas and Maine, pricing varies dramatically. Men and women may pay radically different rates in some states as well. Men in Delaware, for instance, could pay about $26 more per month for Plan F coverage than their female counterparts. Where Medigap pricing varies based on gender, men typically pay more.

Pricing may also vary from county to county in some states. Larger or more heavily populated areas could pay more for Plan F coverage, but that’s not always the case. In fact, some companies may charge less to customers in more populated areas. For the rate chart above, we used zip codes for the following cities, just to give you an idea:

  • Huntsville, Alabama
  • Fayetteville, Arkansas
  • Georgetown, Delaware
  • Lake Buena Vista, Florida
  • Elizabethtown, Kentucky
  • Bar Harbor, Maine
  • Columbia, Missouri
  • Bozeman, Montana
  • Baltic, South Dakota
  • Bluefield, West Virginia

We chose these states because they rank among the top areas of the country with the highest percentage of Medicare enrollees according to a report by Kaiser Family Foundation. To show you how rates might vary even in the same state, let’s look at rates for a 67-year-old man living in different parts of Kentucky who wants Medigap Plan F from Mutual of Omaha.

According to the chart above, he’d pay about $207.05 a month if he lived in Elizabethtown (Hardin County). If we run the numbers for Allen, a small city in Floyd County, we get the same rate. But people in larger areas of the Bluegrass State benefit from lower premiums. In Louisville (Jefferson County), the state’s most populated city, he’d pay about $182.69 a month for Plan F coverage. He would also pay this rate in Lexington (Fayette County), which is the state’s second-largest city, and in the state capital of Frankfort (Franklin County). When it comes to Medigap policies, where you live matters.

Medigap Plan F vs. Medigap Plan G

If you’re comparing Medigap plans side by side, then you might notice that Plans F and G look almost the same. These plans are nearly identical, the only difference being that Plan G does not cover the Medicare Part B deductible. Depending on where you live and what a Medigap plan will cost you, Plan G may be a better investment for a couple of reasons: It’s cheaper, and Plan F will be discontinued starting in 2020.

Let’s talk about cost first. If you look at the rate chart, a 67-year-old living in Kentucky (Hardin County) would pay $159.25 a month for Plan F coverage from AARP/United Healthcare. This same person would pay $135.27 a month for Plan G. That’s a difference of $23.98.

  • Multiply $23.98 by 12 months, and you get $287.76. That’s your annual savings for choosing Plan G over Plan F.
  • The annual Medicare Part B deductible is $183 in 2018.
  • Subtract the Part B deductible ($183) from your annual savings for getting Part G ($287.76), and you get $104.76. This is how much you’ll save overall by choosing the plan option with less coverage.

The difference of about $100 over the course of a whole year might not mean much, but it could mean everything to some households. Medical care is expensive, especially as you age. Having your out-of-pocket medical costs taken care of can be a huge relief for those living on fixed incomes. But cost isn’t the only consideration when it comes to Medigap Plan F.

Starting in 2020, Medigap Plan F will be eliminated from the lineup of available Medigap supplement plans. This will happen at the federal level, meaning no company will sell new Plan F policies after January 1, 2020. You can still buy these plans until that date, and you can keep one in place after Plan F gets discontinued. But since fewer people will enroll in these plans after 2020, costs may rise substantially as the risk pool shrinks.

Plan F Benefits Plan G
Part A deductible
Part A coinsurance + 365 days of additional benefits once original Medicare benefits end
Part A hospice care coinsurance / copayment
Part B deductible
Part B coinsurance/copayment
Part B excess charges
First 3 pints of blood
Skilled nursing care coinsurance
Foreign travel (up to plan limits)

Despite the cost advantage that Plan G typically has over Plan F, you might prefer the convenience of having a supplemental policy in place that covers all of your out-of-pocket medical costs. And the cost difference between the two policies may not always be enough to justify covering the Medicare Part B deductible yourself. In Orange County, Florida, for example, the total savings for choosing Plan G (which costs nearly $196 a month) over Plan F (just over $211 a month) is only about $3 for the year when you factor in the Part B deductible. Plus, some areas may not have access to Plan G whereas Plan F is typically available (since it’s so popular among Medicare supplement customers).

How Medigap Plan F Can Help You Save

Now that you know more about what Plan F covers and how it compares to other Medigap plans, let’s go over how this plan can reduce your out-of-pocket medical costs. As a reminder, here’s what original Medicare charges in terms of cost sharing (what you have to pay) in 2018:

  • Medicare Part A deductible: $1,340
  • Medicare Part A coinsurance for hospital stays: $335/day for days 61 to 90 and $670/day for days 91+ (for up to 60 “lifetime reserve days)
  • Skilled nursing care: $167.50/day for days 21-100 (and all other costs after day 100)
  • Medicare Part B deductible: $183
  • Medicare Part B coinsurance rate: 20 percent of Medicare-approved amount
  • Any Part B excess charges, which is the difference between what a provider charges and what Medicare deems acceptable for medical services

This isn’t a comprehensive list, but it’s a basic breakdown of your costs under original Medicare. Keep in mind that Medicare Part A is free for most people (doesn’t have a monthly premium), and most enrollees will pay around $134 a month for Part B coverage. You’re still responsible for original Medicare premiums even if you get a Medigap supplemental plan.

Medical Care with Medigap Plan F in Place

Suppose you need knee replacement surgery. Using some averages and math from HealthLine.com, here’s a breakdown of the costs associated with a total knee replacement:

  • Pre-surgical prep (office visits, scans, etc.): $1,900
  • Surgery (hospital) and inpatient charges: $56,000
  • Post-surgery rehabilitation and recovery: $2,600
  • Total: $60,500

Medicare Part A covers hospitalization, so after you meet your deductible ($1,340 in 2018), you won’t have to pay for the hospital portion of your bill. Part A coinsurance for hospital stays doesn’t kick in until day 21, and the average hospital stay for a total knee replacement is under four days. Part A also covers the surgery itself, so you won’t have to cover that part of the bill out of pocket either.

Medicare Part B covers 80 percent of Medicare-approved medical care after you meet the annual deductible ($183 in 2018). Your non-hospital costs add up to $4,500. Let’s assume that you’ve met the deductible already. Part B would cover 80 percent of the $4,500 in pre- and post-surgery office visits and rehabilitation, leaving you to cover the remaining 20 percent. That comes to $900.

Add $1,340 to $900, and you get a bill of $2,240. That’s your responsibility for the total knee replacement.

Of course, this is a fraction of the original five-figure bill, but it’s no small sum. If you had Medigap Plan F in place, the calculations would go like this for a total knee replacement.

Treatment / Service Charge Medicare Pays Medigap Pays
Pre-surgery office visits and lab work $1,900 $1,520 $380 (Part B coinsurance)
Surgery and four days of hospital inpatient charges $56,000 $54,660 $1,340 (Part A deductible)
Post-surgery rehabilitation $2,600 $2,080 $520
Your responsibility $0

A surgery that costs over $60,000 won’t cost you anything out of pocket – save the monthly premiums. If your premium for Plan F costs around $180 a month, then you’ll pay $2,160 for the year. You’ve essentially saved $80 by having Plan F in place ($2,240 minus $2,160). But this is just one surgery, and you only pay the premium once per month. If you had other medical problems or needed another surgery, Plan F pays out again. Depending on your medical needs, it’s a good upfront investment.

Obviously, you’re going to get the most bang for your buck if you have a high-cost medical year, but what about everyday medical expenses? Will Medigap Plan F still be a good investment? That depends. If you truly only see a doctor once a year for a physical and a few other times for regular illnesses, like the flu or a sore throat, then a comprehensive Medigap plan won’t be worth the monthly premium cost to you. But even people with moderate health care needs might benefit from a robust policy. Trips to the doctor add up. Medigap doesn’t cover prescription drugs, so you’ll still have some out-of-pocket costs for those, but these are good policies to have as a way to bolster your benefits.

Bottom line: Crunch the numbers for yourself to see which Medicare supplemental policy works best for your budget and your healthcare needs. Medigap Plan F gives you the most coverage, but there are other, less comprehensive options available if you don’t need all the benefits. Finding a great Medigap plan takes some legwork, so start today to get a personalized quote for your coverage. We’re happy to connect you with a licensed Medicare professional, nearly 24 hours a day seven days a week.

You can use the form below to connect direct with a licensed medicare professional who will provide you with a no-cost, no-obligation quote on any medicare plan you wish to receive, including a Medigap Plan F plan from any insurance carrier.

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