Is Plan F Worth the Price?

Is Medicare Plan F Supplement Worth the Price?

Medicare Supplement Plan F provides the most comprehensive coverage out of all 10 plans available to Medicare recipients, but it’s also the most expensive. Read this post to learn if it’s worth the price.

Of the 10 Medicare Supplements available, Plan F is the most popular of the entire “alphabet soup” of Medigap plans. Touted as the “Cadillac of Medicare Supplements,” nearly 60 percent of individuals who purchase a Medigap or Medicare Supplement insurance plan choose Plan F, according to the American Association for Medicare Supplement Insurance.

What makes Plan F so popular and enticing?

Plan F provides total coverage that leaves members with zero out-of-pocket expenses, and even covers the annual Medicare Part B deductible of $183 in 2018.

The only costs to Plan F members are the monthly Part B and Plan F premiums — the latter of which is Plan F’s only downside.

Plan F Provides Comprehensive Coverage… at a Cost

Because Plan F covers the annual Part B deductible, members of the plan are free to visit doctors, hospitals, and other healthcare providers as often as they’d like, with no out-of-pocket costs.

This means insurers pay out more for claims for Plan F members than they do for members of other plans that require some degree of cost-sharing, such as copays and coinsurance.

Which makes sense, of course. If you have to pay a small copay of, say, $20, you’ll probably not go to the doctor for every little ache, pain, sniffle, and sneeze (unless those minor annoyances begin to have a severe impact on your ability to function, of course).

In order to maintain solvency, insurers have to account for the “risk pool” of any given plan — the combined overall health of all members on a specific plan and how often they’re making use of the plan and filing claims.

It’s why Plan F is the costliest of Medicare Supplements, with that cost likely to continue rising.

And with Congress discontinuing Plan F in 2020 (though those who purchase Plan F before it’s discontinued will still have it), the risk pool will cease growing at the same time as those within continue aging and experiencing declining health.

A smaller risk pool comprised of those with diminishing health and increasing healthcare costs will contribute to an increase in Plan F premiums, so it’s wise to understand what other Medicare Supplements offer in terms of coverage vs. cost.

Plan G is a Viable Alternative to Plan F

Medigap Plan G provides almost identical coverage as Plan F — with one small exception.

Unlike Plan F, Plan G does not cover the Medicare Part B deductible, so you’d need to fork over up to $183 once a year for any non-preventative care before the plan takes over paying.

That’s a small trade-off for what’s otherwise the exact same coverage.

Medicare Supplement Plan F and Plan G At a Glance

At face value, Plan F is obviously better — every dollar saved is another dollar in your pocket, right? But you may save far more than the cost of the Part B deductible when you look at the cost of each Medigap plan.

Dollars and Cents: Comparing the Cost of Plan F vs. Plan G

Even though Plan F pays the annual Part B deductible, chances are you’ll still wind up with more cash in your pocket at the end of the year with a Plan G, instead.

For example, we can use our online Medicare Supplement quote tool to show the following comparisons for a 65-year old non-smoking male looking to purchase a Medigap plan for the first time in Florida, New York, Texas, and Kentucky (to give an idea of the average rates in varying regions of the country):

In each situation, our example Medigap customer would come out ahead by purchasing a Plan G, even after taking into account the cost of his once-a-year Part B deductible.

So is Plan F Worth the Price?

For some, it’s easier to budget a set amount of cash per month for a Plan F premium and the peace-of-mind of having no other out-of-pocket healthcare expenses. The need to pay $183 before a Medigap plan takes over can create a strain on a tight budget.

However, the yearly savings of a Plan G over a Plan F may be enough to warrant paying the Part B deductible (if non-preventative care is even needed in that year). Even so, a Plan G member will still come out ahead by the end of the year.

How Can I Switch from Plan F to Plan G?

Choosing the right Medicare Supplement for you and your personal situation is important. If you’re unhappy with your plan, switching Medigap plans may subject you to medical underwriting, which could increase your premium or outright prevent you from purchasing a policy, depending on your health and pre-existing conditions.

Unless you qualify for a guaranteed issue right, of course. A guaranteed issue right opens up a brief window of time when you can switch policies without the risk of medical underwriting or existing medical conditions.

It’s always a good idea to shop around and compare rates for a Medicare Supplement that works for your budget and risk tolerance, whether you’re in your Initial Enrollment Period, qualify for guaranteed issue rights, or are healthy enough not to worry about medical underwriting.

Choosing Between Plan F and Plan G for Comprehensive Coverage

In almost all situations, Medicare Supplement Plan G is likely more affordable, even when taking the Part B deductible into account. As time goes on and the number of Plan F members decrease (especially when new enrollees can no longer purchase Plan F and, thus, increase the risk pool), it’s expected for Plan F premiums to steadily increase.

Take into account, as well, the probability of purchasing Plan G and never needing to pay the Part B deductible simply because your health doesn’t require you to have anything but a preventative doctor visit. You’d be saving even more of your hard-earned cash!