As you approach age 65, it’s important to start thinking about your healthcare needs and how you’ll pay for them. Medicare can be a helpful resource for many people, but it’s important to understand the different plans and options available to you.
One plan that has gained a reputation for its extensive coverage is Medicare Plan F. However, with changes to Medicare in recent years, you’ll need to determine whether this plan is still the best choice. This article will explore what Medicare Plan F covers, how it works, and alternatives you may want to consider.
Medicare Plan F is also referred to as a Medicare Supplement or Medigap plan. Private insurance companies offer Medicare Supplements to fill in the “gaps” of Original Medicare (Parts A and B). While Original Medicare offers great benefits, it leaves beneficiaries with quite a few out-of-pocket costs. Medigap plans act as a secondary form of insurance and eliminate all or some of those leftover expenses.
Specifically, Plan F picks up all the deductibles, copayments, coinsurance costs, and excess charges left by Parts A and B. In addition, Plan F covers about 80% of foreign travel emergency medical expenses, which can be a valuable benefit for those who frequently travel abroad.
Here are the costs that Original Medicare leaves behind but are covered by Plan F:
- Part A deductible
- Part A coinsurance costs (Plan F includes an extra 365 days of coverage)
- Skilled nursing facility coinsurance costs
- First 3 pints of blood
- Part B deductible
- Part B copayments and coinsurance costs
- Part B excess charges
- Foreign travel emergency, up to plan limits
Like any insurance product, Plan F has a few pros and cons. Choosing the right insurance for your healthcare needs is a big decision, so be sure to weigh these pros and cons when making your choice.
One of the main advantages of Medicare Plan F is that it provides the most comprehensive coverage available among all Medicare Supplement plans in Texas. This means that you’ll have virtually no out-of-pocket costs for medical services, which can provide peace of mind and financial security.
Another advantage is that Plan F does not have any network limitations. As long as you’re healthcare provider accepts Medicare, they’ll accept your Medicare Supplement, regardless of which insurance carrier you purchase it from.
Lastly, Medigap plans require very few prior authorizations or step therapy requirements. Unfortunately, both techniques can delay treatments and cause headaches when trying to get the care you need.
The biggest drawback of Plan F is the cost. Premium amounts will vary depending on personal factors such as age, gender, and where you live. Still, Plan F generally has the highest rates of any Medicare Supplement plan in Texas. Plus, your premiums will increase each year. If you are healthy, you may feel like you are paying too much for a plan you aren’t currently utilizing.
Another disadvantage of Plan F is that it’s not available to anyone enrolled in Medicare after 2019. You must have enrolled in both Medicare parts before 2020 to be eligible for Plan F. Eventually, the pool of beneficiaries enrolled in Plan F will shrink, leading to even higher premiums in the future.
When considering whether or not to enroll in Medigap Plan F, it’s important to think about the cost. The monthly premiums for Plan F can be higher than other Medicare Supplement plans, which isn’t feasible for everyone. However, you should also weigh the monthly premiums against the out-of-pocket costs that you would otherwise have to pay for medical services without Plan F. In some cases, the coverage afforded by Plan F is worth the higher premiums.
Think Plan F might be right for you? Let’s talk more about eligibility, enrollment periods, and how to find competitive rates.
We mentioned that you must have been eligible for Medicare (by turning 65) before 2020 to enroll in Plan F. Some insurance carriers require you to have been enrolled in Parts A and B before that time, while others allow you to choose Plan F as long as you turned 65 before that date.
In addition, you can only enroll in plans offered in your residential state. Not all insurance companies offer Plan F, and companies may offer it in one state but not another. Finally, you must live within the plan’s service area to enroll. This applies to all types of Medicare plans.
If you enroll in Medicare as soon as you become eligible, you’ll enjoy guaranteed issue rights to any plan you want. (You still have to meet the eligibility requirement of Plan F.) “Guaranteed issue rights,” or GI Rights, mean that no insurance company can deny your application, even if you have chronic or serious health conditions. You will not pay higher premiums based on your health, nor will you have any waiting periods for pre-existing conditions.
However, if you try to enroll in a Medicare Supplement plan long after you were first eligible, you will likely have to pass medical underwriting. Some states have more flexible rules, but you have to be relatively healthy in most states to enroll in a Medigap plan. The same applies if you are currently enrolled in a Medicare Supplement plan and want to switch to a different Medicare Supplement plan.
There are certain enrollment periods during which you can enroll in Plan F. Your Initial Enrollment Period (IEP) is a 7-month period that begins three months before the month of your 65th birthday. During this time, you can enroll in Original Medicare, and any other Medicare plans you choose. You will not be subject to underwriting for a Medicare Supplement plan if you utilize your IEP.
If you miss your Initial Enrollment Period, you might still be able to enroll in Medicare at another time throughout the year. Certain life events could qualify you for a Special Enrollment Period, such as losing other creditable coverage, like under an employer. If you do not qualify for an SEP, you’ll need to wait until the General Enrollment Period (GEP) runs from January 1 through March 31. Remember that if you enroll during this time, you will likely be subject to medicare underwriting.
One important thing to understand about Plan F – and all other Medigap plans – is that they offer standardized benefits. Years ago, the government decided to simplify its coverage. Now, the coverage and benefits a plan offers are always the same, no matter who you purchase the plan from. So, for example, if you purchase Plan F from Company X in Texas and your friend purchases Plan F from Company Y in Florida, you both have the exact same coverage.
Why is that important? It’s important because the premium amounts are the only difference you’ll notice between the plans. Insurance carriers can set their premiums, and each one might use a different pricing method. Before you enroll in Plan F, take the time to compare rates from multiple companies. There is no sense in paying higher rates for the same benefits.
While Plan F is the most comprehensive Medicare Supplement plan available, it may not be the best choice for everyone – even if you meet the eligibility requirements. There are nine other plans to consider, each named by a letter of the alphabet. In addition, you may want to consider Medicare Advantage instead. Let’s take a brief look at the other two most popular Medigap plans in Texas (Plans G and N) and a quick glance at Medicare Advantage.
Plan G is the closest alternative to Plan F, and after the changes in Plan F eligibility, it quickly surpassed Plan F in popularity. Plan G is nearly identical to Plan F, but it does not cover the Part B deductible. However, the monthly premiums for Plan G are often drastically lower than Plan F, which makes it a more affordable option. Moreover, the premiums’ savings almost always outweigh the Part B deductible. So, even though Plan G offers slightly less coverage, it can be the more cost-effective option.
Plan N offers similar coverage to Plan G, with two differences. Like Plan G, you’ll still be responsible for the Part B deductible. In addition, you will have copayments due when you visit the doctor or emergency room. A doctor visit will cost up to $20, and an emergency room visit will cost up to $50. Copays for emergency room visits that result in inpatient admission are waived. Lastly, Plan N does not cover Part B excess charges. Excess charges are amounts providers can add to the final bill if they do not accept the Medicare-approved amount for a service. They can add an extra 15% to the approved cost. While this is somewhat rare and is not allowed in eight states, it is certainly something to be aware of.
Medicare Advantage is also called Medicare Part C. These plans operate very differently than a Medicare Supplement plan, so you’ll need to take the time to understand how they work before enrolling. We mention them here because, for many people, they can be a great way to save on their monthly insurance premiums. However, please note that they do come with their own drawbacks.
Short on time and just need to know a few key things about Plan F? Let’s review a few of our clients’ most common questions about Medicare Plan F in Texas.
To be eligible for Plan F, you must be enrolled in Original Medicare and have turned 65 before 2020. Also, you cannot be enrolled in a Medicare Advantage plan simultaneously.
The cost of Medigap Plan F varies depending on the insurance company offering the plan, your age, and other factors. In general, Plan F tends to have higher monthly premiums when compared to other Medicare Supplements due to its comprehensive coverage. Therefore, it’s important to compare the premiums and benefits of different insurance companies to find the best plan and rates to fit your needs.
As of January 1, 2020, Plan F is no longer available to new Medicare enrollees. If you were eligible for Medicare on or after January 1, 2020, you cannot enroll in Plan F. However, if you were eligible before that date, you can enroll in Plan F if it’s available in your area. In addition, existing Plan F policyholders can keep their coverage.