Medicare Supplement or Medigap Plan F has historically been one of the most popular Medigap plans available. However, it’s no longer in your best interest to enroll in a Plan F.
In this video, we’ll explain why purchasing a Medicare Supplement Plan F is a bad idea and why staying in your current Plan F, if you have one, is costing you far more money than you need to pay for comprehensive Medicare Supplement coverage.
Confused about your Medicare coverage options? Watch our free video: How to Find the Best Medicare Coverage Without Paying More Than You Need To…
Who Can Still Purchase Plan F?
First, we need to briefly mention the Medicare Access and CHIP Reauthorization Act of 2015. This law mandated that as of January 1, 2020, insurers can no longer sell Medicare Supplement or Medigap policies that cover the Part B deductible to newly eligible Medicare beneficiaries.
Here’s what that means: if your Medicare Parts A and B effective dates are before Jan 1, 2020, you can still purchase a Medicare Supplement Plan F. If your Medicare Parts A and B effective dates are Jan 1, 2020 or later, you cannot purchase a Medicare Supplement Plan F.
If your Medicare effective dates are Jan 1, 2020 or later, your options for comprehensive Medicare Supplement coverage are Plans G and N, which are explained in the video linked here.
If your Medicare Parts A and B effective dates are before Jan 1, 2020, you can still purchase a Medicare Supplement Plan F, but doing so is not in your best interest.
Here’s why:
Medicare Supplement coverage is standardized by law. A Plan F from any company in your state will have exactly the same benefits. Those benefits are shown on the chart here. The same goes for Plan G, N, and all the other letters available.
The only extra benefit available in a Plan F as opposed to a Plan G is the one that Congress didn’t like. Plan F pays the Medicare Part B annual deductible and Plan G does not.
In 2021, the Medicare Part B annual deductible is $203. Does purchasing a Medigap Plan F rather than a Plan G to cover that $203 make sense?
To find out, we have to look at the differences in premiums between Plan G and Plan F.
Real Life Rate Comparisons
I ran Plan F and Plan G quotes for 67 year olds, since at the time of this video they are the youngest people who are still able to purchase Plan F.
Most Medicare Supplement companies increase premiums once a year as a policyholder ages, so as you get older, your Medicare Supplement becomes more expensive. The differences between a Plan G and Plan F stay fairly similar through all age levels to what is shown for 67 year olds.
That may not continue into the future. Because no new, younger, generally healthier people are being added, that means that everyone with a Plan F is getting older and most are utilizing more medical services as they age.
Medicare Supplement rate increases are calculated based on how much the company paid out in medical claims during a calendar year versus how much premium money the insurance company took in for a Medicare Supplement plan in a region.
Because no new people are being added, the rates for Plan F policies will most likely increase more than Plan G rates.
Plan F vs Plan G Premium Rates
Here are the average differences in premium cost between Plan F and Plan G for 67 year olds in six different states. Some states have different rates for male and female enrollees, so where that is the case, I ran quotes for both.
A note for MN and WI Medicare beneficiaries: you don’t have lettered Medicare Supplement plans. There are three states that have a totally different design for Medicare Supplements, and MN and WI are two of those states. That’s why you aren’t included in these quotes.
In Illinois, a Plan F for a 67 year old female is about $25 more per month than a Plan G. That’s $300 per year. Which is more than the coverage difference of $203.
A Plan F for a 67 year old male is $30 more per month than a Plan G. That’s a difference of $360 per year.
In Indiana, a Plan F for a 67 year old female is $60 more per month than a Plan G for a difference of $720 per year. Which is way more than the benefit difference of $203.
A Plan F for a 67 year old male is $65 more per month than a Plan G for a difference of $780 per year.
In Florida, a Plan F for a 67 year old, female or male, is $50 more per month than a Plan G for a difference of $600 per year.
In Arizona, a Plan F for a 67 year old female is $25 more per month than a Plan G. A difference of $300 per year.
A Plan F for a 67 year old male is $30 more per month than a Plan G for a difference of $360 per year.
In Idaho, a Plan F for a 67 year old, female or male, is $60 more per month than a Plan G for a difference of $720 per year.
And in Washington state, a Plan F for a 67 year old, female or male, is $55 more per month than a Plan G. A difference of $660 per year.
Remember, the only difference between a Plan G and a Plan F is the $203 Medicare Part B outpatient annual deductible.
It doesn’t make sense in any of these states to pay hundreds more in premium to cover $203.
If the higher premium cost is worth the convenience to you to not have to pay your Medicare Part B outpatient deductible of $203 if and when it gets billed to you by medical providers, that’s really the only reason to enroll in a Plan F.
It makes absolutely no financial sense to buy a Plan F and pay more than the benefit you are covering.
The only financial benefit Plan F has is for insurance agents. We are paid a commission that’s a percentage of your Medicare Supplement initial premium. So if you buy a Plan F, your agent will make more in commission than if you buy a Plan G.
Hopefully, you are working with an agent or broker who is looking out for your best interest first rather than their own commissions.
If you have questions about your Medicare Supplement coverage, or any other Medicare plan questions, please feel free to give our office a call at 877-312-1414 or schedule a free, no obligation Medicare Plan Consultation.
We’re here to help you find the Medicare coverage that is the best option for you!
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