Plan F is often referred to as the “best” Medigap plan available. The fact is, plan F is the most comprehensive plan available but is also the most expensive. Plan F is the only plan currently available that covers everything that Original Medicare does not cover in full (see chart below).
In addition plans, F and C are currently the only standardized plans available that cover the part B deductible, they also happen to be the two most popular plans. On April 14th, 2015 Congress signed the H.R. 2 bill, along with other changes that eliminated plans F and C on Jan. 1st, 2020 for new Medicare beneficiaries. This will eliminate”first dollar coverage” plans for new Medicare beneficiaries.
First dollar coverage refers to the insurance covering the annual part B deductible; $240 for the year.
How Does This Affect Medicare Beneficiaries?
Essentially, people who enroll in Medicare after Jan. 1st, 2020 will not be able to purchase plan C or F however, folks who enrolled in Medicare prior to Jan. 1st, 2020 will still be able to buy plans C and F. If you enroll in Medicare after Jan. 1st, 2020 you will only have the option to purchase one of the eight remaining supplement plans. Plans G, D, and N will be the plans offering the most comprehensive coverage.
Congress decided to eliminate first-dollar coverage plans based on the idea that this will cut back on Medicare spending. The idea is; people who don’t have to pay any out-of-pocket expenses tend to seek medical attention when it is not necessary, thus costing Medicare money.
Eliminating first-dollar coverage plans will cause people to “think twice” before going to a doctor when they have to pay a deductible. However, research has shown that the opposite is true. People who forgo seeing a doctor to avoid paying a deductible typically end up costing Medicare more money in the long run because they didn’t get the treatment they initially needed.
Conclusion
Changes in Medicare will always happen, the best thing to do is stay informed and be aware of the changes happening. For those who have Medicare plan F or C, taking a look at changing to a Medigap plan G or N may be beneficial as the rates on F and C may increase more than they have in the past once insurers start restricting enrollments.
Also, the Part B deductible is currently $240 for 2024 and that is factored into the premium for plan F and C. Often, the premium difference between plans F and G more than covers the deductible of $240 for the year.
Citations:
Doc Fix and H.R. 2 ~ It Could Have Been Worse http://www.cahealthadvocates.org/news/basics/2015/Doc-Fix-and-HR2.html
Medigap Enrollment Among New Medicare Beneficiaries http://kff.org/medicare/issue-brief/medigap-enrollment-among-new-medicare-beneficiaries/
Medigap and H.R. 2: Evolution, not revolution http://www.lifehealthpro.com/2015/05/06/medigap-and-hr-2-evolution-not-revolution
Alex Wender is the founder and CEO of Bluewave Insurance. He has been blogging about Medicare-related topics since 2010. Since then, he and his agency have helped thousands of people across the country choose the right Medicare to fit their needs.
