Medicare Supplement Plans
Why should I get a Medicare Supplement?
Medicare Parts A & B covers 80% of healthcare costs, and does not include prescription drug benefits. These are referred to as “gaps” in coverage. Medicare Supplement does essentially is, it fills in the gaps. Hence, the nickname: “Medigap.”
Medicare Supplements come in different plans, such as Plan G and Plan N. These plans can eliminate out-of-pocket costs such as deductibles, co-pays, coinsurance and excess charges. Here is a breakdown of costs NOT covered by Medicare:
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges
- Part A hospital and coinsurance costs up to an additional 365 days after Medicare
- Part B coinsurance or copayment
- First three pints of blood used in an approved medical procedure (annually)
- Part A hospice care copayment or coinsurance
- Skilled Nursing Facility (SNF) coinsurance
- Foreign travel emergency medical care (80% up to plan limits)
For a guide on Choosing a Medigap Policy, please Click Here
Medicare Supplement Plan F covers all of the costs not covered by Medicare listed above. However, as of January 1, 2020, Plan F is no longer available for purchase.
What happened to Plan F?
On April 16, 2015, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was passed by Congress and signed into law, changing the law on various aspects of health care, including some Medicare Supplement plans. The new law states that on or after January 1, 2020, a Medicare Supplement policy that provides coverage of the Part B deductible may not be sold or issued to a newly eligible Medicare beneficiary. This means that Medicare-eligible beneficiaries born after December 31, 1954 (turning 65 on December 31, 2019) will NOT be able to enroll in Medicare Supplement Plan F. Another less popular plan which also covers the Medicare Part B deductible–Medicare Supplement Plan C—will no longer be available as well. To view an actual copy of the MACRA law passed by Congress, click here.
Another supplement plan just one step below Plan F is still available: Medicare Supplement Plan G.
What’s the difference between Plan F and Plan G?
There are actually two differences between Plan F and Plan G:
- Plan F covers the Part B Deductible, and Plan G does not. The beneficiary must pay for doctor and outpatient services under Medicare Part B at the beginning of each year, up to the Part B deductible amount ($198 in 2020). Hospital services under Medciare Part A are covered 100% right away.
- Plan G costs less than Plan F. Rates for Plan F are noticebly higher than Plan G. Since new Plan F policies are no longer being written, the rates for Plan F will only continue to increase. We have helped several clients save money each month by switching their Plan F to Plan G. For a customized analysis with a licensed SeniorQuote agent, please call 1-800-992-7734 or fill out our free quote form: click here.
“Why should I change my Plan F to Plan G?”
To save money, period. The best way we can explain this is when a plan is discontinued, there are no longer any freshly-turned 65-year-olds purchasing the plan. This means the pool of clients insured by the plan will only get older and older, causing the plan to spend more money on claims. The plan is not adding new policyholders, who contribute premiums to the pool of clients without making several claims.
Ultimately, this can be confusing to most people. We invite you to speak with a licensed agent for further help in understanding the Plan F being phased out. Call us at 800-992-7724 or request a Free Quote to speak with a licensed agent.