Is Medigap Plan F still the “best” Medigap plan?
It’s been a couple of years since I’ve gotten questions on Medigap Plan F. Then, last month, that gave the impression to be the theme.
Consider this timely query from a brand new retiree.
I’m 71 years old and am finally retiring. I talked to my agent about signing up for a Plan F. I believe that is the most effective since it covers every thing. She just shook her head and frowned. I do know I qualify for this and that is what I need, but she doesn’t even wish to speak about it. How can I get Plan F?
A Medigap policy is a Medicare complement insurance policy, a part of the unique Medicare package and another path to Medicare Advantage. A Medigap policy helps cover costs that Medicare Part A hospital insurance and Part B medical insurance don’t cover. Medigap policies are standardized, with one letter representing a package of advantages and price sharing.
Plan F was once called the Cadillac of Medigap plans. It covers the utmost allowable amount for all nine advantages comparable to: B. the deductible for inpatient hospital stays, the copayment for expert nursing facilities and the 20 percent coinsurance for outpatient services. When you pay the premium, you get first-dollar coverage, meaning the plan pays for itself from day one. The beneficiary incurs no out-of-pocket costs when using health care providers who accept Medicare patients. Accordingly a 2016 report from AHIPAbout 55% of all Medigap policies in force were Plan F policies.
But then the Medicare Access and CHIP Reauthorization Act of 2015, generally known as MACRA, modified the principles. As of January 1, 2020, insurers could now not sell Medigap policies to newly eligible Medicare beneficiaries that covered the Part B deductible, specifically Medigap Plan F and Plan C. (People who’ve reached the age of 65 at the moment are eligible or were eligible for Medicare because of disability or end-stage renal disease.) Make seniors pay something (the Part B deductible) would cause them to think twice concerning the medical services they receive.
In the 4 years since MACRA went into effect, the Medigap Cadillac has morphed into an Edsel. According to the American Association for Medicare Supplement Insurance, Only 1% of seniors who purchased a Medigap plan in 2023 selected Plan F, in comparison with 50% who selected Plan G The covers all the advantages that Plan F offersapart from the Part B deductible.
Think twice about Plan F
Therefore, anyone born before 1955 can still purchase Plan F. However, this just isn’t the most effective option for 2 very vital reasons.
1. You would pay greater than Plan F is price.
There’s just one difference between Plan F and Plan G – the Part B deductible. Plan F covers it; This just isn’t the case with Plan G, meaning beneficiaries must meet the deductible before the plan begins paying its share of outpatient services.
This yr the deductible is $240. However, each plan FI charged higher fees. In Los Angeles, for instance, the annual premium for Plan F starts at about $2,580, in comparison with $1,840 for Plan G, a difference of $740. In Charlotte, North Carolina, Plan F costs $360 more. Paying $360 to $740 to cover a $240 profit is neither cost-effective nor sensible.
2. No young beneficiaries can enroll in Plan F.
Today’s seniors who select the unique Medicare route at age 65 will almost certainly select Plan G. However, under Plan F, the youngest able-bodied beneficiaries will soon be over 70 years old. Plan F’s risk pool is aging and shrinking, and that likely means higher premiums in the long run.
The 71-year-old retiree’s insurance agent must have discussed Plan F. If he still wanted that plan, the insurance agent must have processed his request or referred him to a different agent. With more careful consideration, those that think they need Plan F will find that Plan G is a much more sensible choice, each for his or her wallet and for future healthcare.
