Alternatives to Medicare Supplement Plan F

For those who have enjoyed the excellent complete coverage of the Medigap Plan F, a Medicare supplement plan. It is disconcerting to learn the plan is not going to be available to new subscribers when the New Year of 2020 rolls around.   If you are already enrolled in Plan F, you will still be able to have Plan F benefits for 2020. If you are someone like me who is always looking ahead and being prepared for the future, you may wonder how long it will be before Plan F will not be available to current subscribers. That’s what has motivated this Blog Post.

We originally talked about this in this posting.

Alternatives to Medicare Supplement Plan F

While Medicare supplement Plan F is the most popular Medigap plan. We often recommend that our clients also consider — or at least take a look at — different supplemental plans.  We want our clients to be aware of the other options they have that still contain excellent coverage. Other supplement plans sometimes have benefits that fit a client’s personal situation more completely than Plan F.  

What are some of the reasons another plan may suit your needs better than Plan F?  

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The ratio of Premium to Costs

Sometimes I encourage a current client to look at a different plan when the cost of the plan. (the monthly premiums) Add up to more than your “total out-of-pocket costs plus premiums” would be.  To be more specific, what if the increase in premiums for your current plan means you would be paying more for your plan each month than you would be paying if you paid copays or deductibles plus premiums for another Plan?  In other words, your pay-out for premiums would be in excess of what is needed. That bothers me because I like to see my clients getting the most for their money.

Here’s an example of what I’m talking about. 

  • Medicare Supplement Plan F covers all copays, coinsurance, and deductibles, and excess charges, so your only cost is the monthly premiums. 
  • Medicare Supplement Plan G has the same coverage as Medicare Supplement Plan F except that it does not cover the Part B annual deductible, which is currently at a low rate of  $185.

Now for the complex math — hang in there with me. If the premiums for Plan G are $15 less each month compared to the premiums for Medigap Plan F, then you would save $180 per year on premiums if you had Plan G. Even after paying the deductible that is a savings of $33 annually for plan G over Medigap plan F.   Now if the monthly savings for Plan G had been less, then a Medicare Supplement Plan F would have been a better choice. 

History of Rate of Premium Increases

An additional factor to consider when deciding if another Medicare supplement plan may be financially better for you than Medigap Plan F is to look at the insurance company’s history of rate increases.  In other words, looking at the company’s history, how much do they increase their premiums each year? What is that percentage rate? Some plans have a large percentage increase in their premiums each year and some plans do not.  What history does your Plan have with that particular carrier? [Note: each insurance carrier sets their own rates, so premiums differ between carriers even for the same plan.] How do different insurance carriers compare in terms of their history around how much they increase premiums each year?  When looking out for your future costs, this is an important piece of information to consider.

Customer Service Reputation

Something else to consider when deciding which Medicare supplement plan is your best option is the insurance carrier’s reputation around customer service issues. Check out the reviews on each insurance company’s website.  Talk with us as well since we have had years of experience interacting with each company. Why is this important? If a billing error has been made and you need to sort it out with the insurance company, it is much easier if you are able to access someone in the company’s customer service department.  If you need to get reimbursement for prepaid excess charges, you want to be able to easily access help, as well as know the reimbursement or problem will be taken care of in a timely manner.

In keeping with that thought, it is also helpful to know if the company has a reputation of following through in pursuit of resolution of the issue after a phone conversation with you.  If you need to make multiple phone calls to resolve an issue, well for some, this kind of customer service is highly stressful — not to mention causing an increase in unhealthy biological markers such as blood pressure! If you are one of those who has endless patience. The customer service history for any of the companies offering the plan you are considering won’t be a big consideration. 

Your Predicted Health Needs

Aside from financial costs and benefits and savings, and aside from customer service satisfaction. A further very important consideration is your own state of health and your anticipated health needs.  If you are relatively healthy and rarely need medical care. Except for the usual preventative care appointments, it may be of benefit to look at some plan options that are not “cover everything” plans.  You may be able to save quite a bit of money on monthly premiums if you were to choose a Medicare supplement plan that does not cover, for example, copays, coinsurance, and deductibles in exchange for a much lower monthly premium.  If you are healthy, you would rarely have a copay! Plans like Medicare supplement Plan F and Plan G are designed to keep care cost-effective for people who require more frequent and/or intensive medical monitoring and treatment.

The Issue of Excess Charges

One final matter to consider when making an informed choice about a Medicare supplement plan. Rather than simply going with the “cover everything” plan is the matter of the status of your medical providers in terms of their relationship with Medicare.  When a medical provider is contracted with Medicare, they agree to accept the payment amount that Medicare has designated. This could be for various appointments, diagnostic tests, and treatments. However, when a provider is not contracted with Medicare, they can charge you more than what your Medicare plan allows.  This is called an excess charge. You would be responsible for paying this excess out of pocket as Medicare will only cover their designated fee.     

As you can readily see, if any of the doctors you like to use for your providers are not contracted with Medicare, your out-of-pocket expenses could be a significant expense for you.  In a situation like this, you would want to choose a Medicare supplement plan that covers excess charges. Some plans do. If, on the other hand, your preferred doctors are all contracted with Medicare. You could choose a plan that does not cover excess charges — and benefit from lower monthly premiums.

Summary

It is easier in this complex and confusing Medicare-and-supplement-plans world to simply choose the most popular plan.  In recent years, this has been Medicare supplement Plan F. Given the above considerations of

  1. the ratio of premium costs to out-of-pocket costs
  2. the insurance company’s history of how much they do or do not increase the plan’s premium,
  3. the quality of the insurance company’s customer service responsiveness,
  4. your prediction of how frequently you will need to utilize medical services in the coming year, and
  5. whether or not your medical providers are contracted with Medicare. So you can determine how many excess-charge fees you may need to pay for out of pocket. The bottom line is that Plan F may not be the best plan for you and your situation. Other Medicare supplement plans may be more tailor-made for you.

We would love to walk you through the above considerations for each supplement plan option that would fit your situation. This is my area of expertise and I would love to help you navigate the confusion!

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Call 352-508-4221 for an appointment, or click on the CONTACT US button on this website.  I look forward to making your acquaintance and working with you.