Medicare can be a complicated subject—especially when you dive into all its variations. “A lot of people hear ‘Part A,’ ‘Part B,’ ‘Plan F’ and all these different letters flying around, and they definitely get a little confused,” says Sterling Price, a senior research analyst at ValuePenguin who specializes in health and life insurance.

Medicare is the federal health insurance program for older U.S. adults, available starting at age 65. It consists of two main plan options: Medicare Part A covers hospitalization without a premium, and Medicare Part B covers doctor and outpatient care for a monthly premium.

Meanwhile, Medicare Plan F is an example of Medicare Supplement Insurance (Medigap). As its name suggests, Medigap helps fill the gaps that Medicare doesn’t cover. About 25% of people enrolled in Medicare parts A and B are also enrolled in a Medigap policy, research suggests.

“When you go to the doctor, Medicare pays 80% of the approved amount,” says Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center. “If you didn’t have a Medigap, you would pay 20%. But if you buy a Medigap plan, it pays that 20%.”

Despite its popularity, Medicare Plan F is no longer available to anyone signing up for Medicare for the first time. Here’s what that means for you.

Medicare Plan F

Historically, Medicare Plan F provided the most benefits of all the supplemental Medicare plans, says Price. It addresses some of the coverage gaps in Medicare parts A and B, which is why many people thought it was worth the extra premium, he notes.

The main benefit of Plan F, which sets it apart from other Medigap plans, is that it covers the
Medicare Part B annual deductible (which is $203 in 2021).

“Plan F was the best plan available,” says Price. “That’s why people were so interested in it. It was so popular, it was just automatically like, ‘OK, I’m signing up for Plan F. I’m not going to look at anything else.’”

Who Is Still Eligible for Medicare Plan F?

Those who were eligible for Medicare on or before January 1, 2020 can still sign up for Medicare Plan F. People who already had or were covered by Medicare Plan F before January 1, 2020 are also able to keep their plan.

Eligible seniors can purchase Medicare Plan F from private health insurance companies, such as Aetna, UnitedHealthcare and Kaiser Permanente, says Price.

What Other Medicare Supplement Plans Are Similar to Plan F?

People newly eligible for Medicare can’t sign up for Plan F, but they still have options when it comes to other Medigap plans. Here’s a look at what some experts say are the two best alternatives to Plan F.

Medicare Plan G

Medicare Supplement Plan G is generally the best option for people who are no longer eligible for Plan F, says Price. “It’s very similar to Plan F,” he notes.

Plan G features almost the exact same benefits of Plan F, with one main difference: It doesn’t cover the Part B deductible. “It’s basically Plan F without the deductible—kind of a modern-day Plan F,” says Price.

The premium for Medicare Part G varies based on the company from which you purchase your plan. You can choose from a normal plan with no deductible or a high-deductible version of the plan.

Some of the things that Medicare Plan G covers include:

  • Medicare Part A deductible, coinsurance, hospital costs and hospice coinsurance or copay
  • Skilled nursing coinsurance
  • The first three pints of blood
  • 80% of foreign travel emergencies

“They’re as covered as they can be,” says Price, referring to people who sign up for Plan G. “They won’t see unexpected medical bills or stuff like that, and they’re willing to fork over a little bit more money to have that peace of mind.”

Medicare Plan N

Plan N can be a solid alternative to Plan F, and it’s typically less expensive than Plan G, says Price. Like Plan G, it doesn’t cover the Part B deductible.

One of the main differences between Part G and Part N is Part N doesn’t cover the excess charges related to Part B, which occur when a doctor charges more than a Medicare-approved amount. Plan G does cover those excess charges.

How to Choose a Medicare Supplement Plan

Now that Medicare Plan F is only available to a certain subset of the population, those who are just signing up may struggle with their coverage decisions. Is a Medigap Supplement Plan necessary? And is Plan G the best option?

Price recommends doing online research and speaking with an insurance agent who can guide you through the process. Medicare.gov also has a tool that helps people find and compare supplement plans.

“Really focus on the things that matter to you most—whether that be getting the maximum amount of coverage or saving some money,” says Price, regarding the research process.

And don’t stress too much about the phaseout of Plan F. “We haven’t seen this be a big problem,” says Schwarz. “It’s just not that significant because these other plans are available.”

 

Author: Angela Haupt & Jessica Lester
Source: © 2021 Forbes Media LLC. 
Retrieved from: https://www.forbes.com/
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