What Is Medigap Plan F?

Senior man with dog at home with Medigap Plan F

Medigap Plan FYou don’t hear as much chatter about Plan F as you used to, but we still get questions about it from time to time. Plan F was once referred to as the “Cadillac of Medicare plans,” but it has somewhat recently been sidelined to make way for a new option.

Plan F Coverage, Cost, and Enrollment

Plan F is one of about ten Medicare Supplement plans available to beneficiaries. All these plans act as a secondary form of insurance, with Traditional Medicare (Parts A and B) being the primary plans. Medicare Supplements, also known as Medigap plans, offer predictable coverage and give beneficiaries the freedom to choose how and where to have medical treatment.

Many people choose to add a Medicare Supplement plan to their Traditional Medicare because of all the out-of-pocket costs associated with Parts A and B. Without a supplement, you’d be responsible for an unlimited amount of deductibles, copays, and coinsurance costs.

There’s a reason Plan F was called the “Cadillac” option. It picked up every remaining cost from Parts A and B – every single one! As long as the service was approved by Medicare, it was paid by the supplement plan. This left policyholders with virtually no out-of-pocket expenses.

Of course, this cozy coverage comes at a price. Medicare Supplement plans have premiums that are based on age, gender, zip code, and tobacco use. Generally speaking, the older you are, the more you pay. Plan F has the highest premiums when compared to other supplements because it offers more coverage. In 2022, the average cost of Plan F was around $200 per month.

So, why don’t we talk about Plan F as often anymore? In 2020, the Medicare Access and CHIP Reauthorization Act (MACRA) became effective. It is a rule that outlines who can purchase certain Medicare Supplements – Plan C and Plan F (and the high-deductible version of Plan F). Only beneficiaries who were enrolled in both Part A and Part B before January 2020 are allowed to enroll in those plans. If you are someone who is aging into Medicare now or in the future, you are not allowed to enroll in either Plan C or Plan F.

cute Senior couple going for a walk in nature with Medigap Plan F
Even those beneficiaries who are eligible for Plan F often choose a “lesser” plan because of the cost savings. For example, Plan G is the closest alternative to Plan F.

Is Plan F Going Away?

Plan F is still available to those who meet the eligibility requirements. Anyone who was already enrolled in Plan F before MACRA is allowed to continue their same coverage. However, we are seeing some negative side effects of the new rule.

The most evident side effect was the increase in Plan F premiums. Most insurance carriers choose to increase their premiums based on how much the plan’s members have cost them over the year. Since the pool of beneficiaries enrolled in Plan F continues to age, and no “younger” people are entering the pool, the cost has gone up. This has led to an increase in Plan F premiums across the board.

Fortunately, there are other great options outside of Plan F. Even those beneficiaries who are eligible for Plan F often choose a “lesser” plan because of the cost savings. For example, Plan G is the closest alternative to Plan F. It offers the same benefits, save for one thing: It does not cover the Part B deductible. This year (2023), that deductible is $226. In almost all cases, you can save more than $226 per year by choosing Plan G over Plan F.

Another great option is Medigap Plan N. Like Plan G, it does not cover the Part B deductible. In addition, you’ll have copays when you visit a doctor or the emergency room. If you’re relatively healthy, those copays may not add up to much over the year.

Of course, you can also choose to enroll in Medicare Advantage. Medicare Advantage plans work quite differently than Medicare Supplement plans but can often be a good choice for many people.

If you are currently enrolled in Plan F, reach out to the advisors at Carolina Senior Benefits. They can compare your coverage to other options available and find out if you are eligible to switch your plan.