Medicare Supplement Plan F in 2024: Plan Details and Eligibility

Medigap Plan F was one of the most popular choices for Medicare beneficiaries due to its comprehensive coverage for out-of-pocket costs left over from Original Medicare. However, as of 2020, new Medicare recipients are no longer eligible to enroll in Plan F. However, for those eligible for or already enrolled in Medicare before 2020, it may still be a plan option.

Medigap, or Medicare Supplement plans, are supplemental Medicare policies offered by private health insurance companies designed to augment the coverage provided by Original Medicare. Medigap helps pay for certain out-of-pocket costs that Medicare beneficiaries would otherwise be responsible for, such as deductibles, coinsurance and copayments. Different Medicare supplement plans offer different levels of coverage to meet individual needs.

It's important to note that Medigap Plan F does not cover prescription drugs, routine vision care, routine dental care, hearing aids or cosmetic surgery. Medigap Plan F is no longer available to new Medicare beneficiaries, but those eligible for Medicare before 2020 can still enroll in and maintain this plan.

Medicare Supplement Plan F was not discontinued entirely but underwent changes that affected its availability for new Medicare beneficiaries. The reason behind these changes was a federal law passed in 2015 called the Medicare Access and CHIP Reauthorization Act (MACRA). MACRA aimed to address concerns about the overutilization of healthcare services by implementing cost-sharing measures.

As part of MACRA, starting from January 1, 2020, Medicare Supplement plans (including Plan F) were no longer allowed to cover the Medicare Part B deductible for newly eligible Medicare beneficiaries. This change aimed to ensure that beneficiaries have some financial responsibility due to the belief that covering the entire deductible might lead to unnecessary utilization of services.

The changes to Medigap Plan F meant that Medicare beneficiaries who became eligible for Medicare after January 1, 2020, could no longer enroll in Plan F. However, those eligible for Medicare before 2020 could still enroll in or keep Plan F if it was already their chosen coverage option.

Another goal of discontinuing the full coverage of the Part B deductible through Plan F was to encourage beneficiaries to consider other Medigap plans, such as Plan G, which offers similar benefits except for the Part B deductible. These changes aimed to promote cost-sharing and reduce the Medicare program's financial burden.

The cost of Medigap Plan F can vary based on several factors, including age, location, gender and tobacco use. Here's an overview of the costs, with a sample consumer of a 70-year-old non-smoking woman in Florida.

• Monthly Premiums: Medigap Plan F requires beneficiaries to pay a monthly premium to the insurance company offering the plan. For a 70-year-old non-smoking woman living in Florida, the premium range for Medigap Plan F is around $211 and $302. These figures are approximate and subject to change.
• Deductibles: Medigap Plan F does not have an annual deductible for Medicare Part A and Part B services. Therefore, beneficiaries are not required to meet a specific deductible amount before the plan's coverage begins. In addition, Plan F covers the deductibles for both Medicare Part A (hospital insurance) and Part B (medical insurance).
• Coinsurance and Copayments: Medicare Supplement Plan F covers the coinsurance and copayment amounts for Medicare Part A and Part B services. Coinsurance is the percentage of the cost of a service that beneficiaries are responsible for paying, while copayments are fixed amounts paid for each service or visit.
• Excess Charges: Medigap Plan F also covers Medicare Part B excess charges. Excess charges occur when healthcare providers do not accept Medicare's approved amount as full payment for a service.
• Foreign Travel Emergency Coverage: Medicare Supplement Plan F includes coverage for emergency medical care during foreign travel. If a medical emergency occurs while traveling outside the United States, Plan F helps cover eligible expenses, subject to certain limits and deductibles.

Medigap Plan F also has a high-deductible option. Selecting this plan means that before your Plan F coverage kicks in, you must pay for Medicare-covered costs up to a certain amount ($2,700 for 2023). While the high-deductible version of Plan F often has a lower premium, you must pay out of pocket for Medicare-covered costs up to the deductible amount before the policy will begin to pay.

The cost-effectiveness of choosing a high deductible plan versus a high premium plan depends on an individual's anticipated healthcare needs and expenses. Consider the following example.

Person A and Person B are both 70-year-old non-smoking women in Florida. Person A chooses the high deductible Plan F, while Person B opts for a high premium Plan F with a monthly premium estimate of $275.

Person A (High Deductible Plan F):

• Monthly Premium: Person A chooses the high deductible Plan F, which typically has lower monthly premiums. Let's assume her monthly premium is $100.
• Deductible: With the high deductible Plan F, Person A has an annual deductible of $2,700.
• Out-of-Pocket Costs: Person A must pay the full $2,700 deductible before her plan covers her medical expenses. Once she meets her deductible, the plan covers the remaining out-of-pocket costs for covered services throughout the year.

Person B (High Premium Plan F):

• Monthly Premium: Person B chooses the high premium Plan F with a monthly premium estimate of $275.
• Deductible: The high premium Plan F has no deductible, so Person B does not need to meet any deductible amount before her plan starts covering her medical expenses.
• Out-of-Pocket Costs: Person B will have lower out-of-pocket costs for covered services throughout the year, as her plan starts covering the expenses without requiring her to meet a deductible.

Cost Comparison: In this example, Person A would pay a lower monthly premium of $100 but would need to cover the $2,700 deductible before her plan starts covering medical expenses. This means she can expect to pay at least $3,900 on the Medigap plan ($2,700 deductible + $1,200 in premiums) for that year if she meets her deductible.

If Person A's healthcare expenses for the year do not exceed $2,700, she would likely have lower overall costs than Person B. However, if her expenses exceed $2,700, she will pay at least $3,900 for the year.

On the other hand, Person B would have higher monthly premiums of $275 but would not have to meet a deductible, meaning her plan would immediately start covering her medical expenses from the beginning of the year, which could be advantageous if her healthcare expenses are substantial. If her healthcare costs exceed $3,300 ($275 x 12), she benefits from this plan choice and saves $600 compared to the high deductible plan.

Remember, it's important to continue paying your Medicare Part B premium and the Medigap policy premium. And be aware that a Medigap policy only covers one person, so if you and your spouse both want Medigap coverage, you'll have to purchase separate policies.