Is Medigap Plan F the best plan?
There has been a lot of buzz on the internet lately with people wondering, “Is buying Medigap Plan F a good idea?”. Medigap Plan F provides peace of mind, but can also raise your blood pressure. If you ask around, most people have Plan F or know someone who does.
Is Buying Medigap Plan F a good idea?
Medicare Supplement Plan F is regarded as the most popular Medigap Plan because of its benefits. Without a doubt, Plan F benefits are great. But are the benefits worth the premium? As with almost everything, you pay for what you get. However, lots of benefits could mean high premiums.
Medigap Plan F Benefits
In a nutshell, Medigap Plan F will pay all Medicare approved charges not covered by Medicare Part A and Part B.
Plan F pays for Medicare approved:
- Deductibles
- Co-pays
- Co-insurance
If your healthcare costs are approved and paid for by Medicare, your Plan F will pay the remainder of the bill.
Medigap Plan F Benefits are the Same with Every Insurance Company
CMS standardizes Plan F benefits. This means each insurance carrier that offers Medicare Supplement Plan F must provide the benefits outlined by CMS. Insurance carriers are not allowed to modify Plan F benefits.
They are also not allowed to cancel your plan because you use it ‘too much’. When you purchase a Medigap Plan, it’s Guaranteed Renewable as long as you pay your premium.
The standardization of Medigap Plans, including Plan F, is a great safety net put in place by CMS. This makes comparing Plan F policies easy. Having identical Plan F benefits with each insurance carrier allows you to focus on finding the insurance company that suits you best.
Important Questions To Think about Medigap Insurance Companies
- Is a big name insurance company important to you?
- Do you want an insurance company who offers the lowest premium?
- Are you interested in a company with the best rate history?
- Would you like an insurance company that offers a 12 month rate lock?
- Do you want the company your friend has because it works for them?
So, can you have it all? Maybe. But, probably not. The big name company may not have the lowest premium for Plan F. And, your friend’s insurance company may not offer a 12 month rate lock.
Insurance companies know that Medigap Plan F is often the first choice for someone new to Medicare. But many insurers are promoting Medigap plans with lower rates and similar benefits.
Is that a bad thing? Of course not. Everyone should have options. But, if your mind is set on Plan F, you need to carefully consider your insurance company.
Buying Medigap Plan F
Purchasing Direct or Working with a Broker – Is there a difference?
If we’re talking price. No. There isn’t a difference. The price you pay when you buy from the insurance carrier is the same price you pay when working with a Broker.
If you buy directly from the insurance company you might get an overview of Medicare and an outline of the Medigap plans they sell. But, you won’t be able to compare quotes from several companies.
and…
When you buy directly with a carrier & your policy renews, the insurance company isn’t going to let you know that their competitor has a better Plan F premium.
Here’s the big difference between buying direct and working with an agent. Most Independent Agents will provide quote comparisons when your policy renews.
Independent Agents and Brokers can shop the Medigap market for you because we have contracts with more than one insurance carrier.
Most agents don’t charge a fee for their service. If you come across someone who asks for a fee, go somewhere else.
I can’t speak for all Independent Agents, but with REMEDIGAP you receive the following at no charge:
- A complete overview of Medicare and how it works
- An outline of all the Medigap Plans available
- Multiple quotes for Plan F, Plan G and Plan N
- Annual rate reviews
- On-going personal service
Compare Medigap Plan F Rates
If you want to comparison shop, then getting multiple quotes is a great idea. Although Medicare Supplement insurance (Medigap) plan benefits are standardized, rates can vary significantly.
A 2016 study by the American Association for LTCI found rates for Medigap Plan F policies varied by as much as 68 percent for the same location. “In most places, we found a 20-to-40 percent spread between the lowest and the highest premium rates,” Slome reports.
Comparison shopping doesn’t mean you should start filling out every form online. Your phone will never stop ringing. Do your due diligence and select an agent that suits your style.
Here’s a few tips and warnings:
- Entering your personal information on one form and then again on another pop up form means you may be giving your information to a company who sells it to several insurance agents.
- If the quote display has a button that says ENROLL, get out immediately. There’s a good chance your information will be sold to multiple insurance agents. You’ll receive a ton of unwanted phone calls.
- Read the fine print. If it looks anything like the image below, you could be inviting numerous agents to contact you.
Medigap Plan F Quotes
Be aware that not all insurance companies allow their rates to be published online for public view. So, if you’re tempted to fill out a quote form that says “instant quotes”, you are seeing a limited number of available insurance companies. And, they may not even have the best rates.
The best way to get quotes is by completing a form, like ours at REMEDIGAP, that asks for your basic information and promises not to sell or share it with third parties. We receive your information and personally send you an email with quotes from multiple Medigap companies.
Annual Medigap Plan F Rate Reviews
Are Annual Reviews Important?
Medigap Plan F is a first dollar coverage plan. Congress decided to eliminate Medigap Plans that offer first dollar coverage for anyone new to Medicare beginning January 1, 2020. This has raised some concern about the future of Plan F premiums.
While we don’t know if Plan F rates will be stable or increase substantially, we can keep a close eye on it. That’s why it’s important to have an annual rate review.
Still thinking about buying Plan F directly from an insurance carrier?
If so, you’ll be on your own when it’s time for an annual review. Remember, the insurance company isn’t going to call you up and tell you that their competitor has a better rate. Frankly, not all Insurance Agents contact their clients annually. But it’s definitely something you should look for when shopping for a professional to handle your Medigap insurance needs.
Annual rate reviews are important for all Medigap policyholders. But, if you’re considering buying Medigap Plan F, it’s a good idea to always have an agent looking after your premium.
At REMEDIGAP, we provide rate reviews on your policy’s anniversary date and at any time you receive a rate increase. Most companies issue an increase once a year, but occasionally you can receive two increases over a twelve month period.
Medigap Plan F Rate Increases
All Medigap plans have rate adjustments. Depending on your location and insurance carrier, your Plan F rate could see single or double digit rate increases.
I don’t expect we’ll ever see any rate decreases for Plan F like we’ve seen for Plan G.
I wish we had a crystal ball to see the future of Plan F premiums. What we do know is that Plan F has a lot of users and some of them qualify through Guaranteed Issue situations.
This means there’s a greater chance that more unhealthy people are on Medigap Plan F than on Plan G. In all likelihood, an unhealthy group is going to use Plan F frequently and therefore drive the rates higher.
If we look to 2020 when Medigap Plan F isn’t available to new Medicare beneficiaries, then who is left in the Plan? The answer is pretty clear. It’s the original Plan F policyholders whose health will decline as they age.
Insurance companies are always adding new Medigap companies with low rates.
Which is great if down the road your Plan F premium is too high. However, you’ll need to pass medical underwriting to change your Plan F to a new insurance carrier.
However, if you live in California, Oregon, or Missouri special rules allow you to switch Medigap insurance carriers at designated times of the year.
For instance, if you have Plan F with XYZ insurance company and you want to exercise your birthday (California, Oregon) or anniversary (Missouri) right, you can buy Plan F from ABC insurance company with no underwriting.
First Dollar Coverage has an impact on rates.
Also remember that Plan F is a first dollar coverage plan. Meaning it covers the Part B deductible. Everyone who has Medicare Part B is responsible for meeting this deductible before Part B services are covered.
Plan F pays the Part B deductible, however you pay for it in your premium. We like to think of it as a ‘service fee’ built into your premium. The ‘service fee’ is provided to the insurance company for writing the Part B check for you.
Since the insurance company pays the Part B deductible for Medigap Plan F, it only makes sense that rates might increase according to the deductible amount. The Part B deductible went from $166 in 2016 to $185 in 2019.
You can avoid a Medigap Plan F rate increase for the first 12 months
If you choose the right insurance carrier, you’ll have a rate lock for 12 months beginning on your policy’s effective date. Getting a rate lock offers peace of mind for at least the first year of having Plan F. In this day and age when the perks are slim to none, it’s nice to have it.
We’ve helped seniors buy new Plan F policies after they bought direct from a carrier and were hit with a rate increase 4 months later. We replaced their Plan F with a lower rate and locked it for 12 months.
Have you decided if it’s a good idea to buy Medigap Plan F?
According to the Kaiser Family Foundation, in 2010, about half (53%) of all Medigap enrollees had plan C or plan F. Most people who have Plan F love it for the benefits but would prefer a lower premium. That’s why those turning 65 or new to Medicare are looking at Plan G as an alternative. Be sure to read our post Medigap Plan F vs Plan G to get a better understanding of these popular plans. You may also want to read our post about Medicare Plan N vs Plan G for even greater savings.
Bottom Line
By working directly with REMEDIGAP you will have a personal agent dedicated to help you throughout the entire process – from education, applying, and ongoing service. You may have many questions or none at all. Either way, we’ll customize our approach based on your needs. We make sure you’re getting the best value with your Medigap plan from year to year.
So what are you waiting for? Just give us a call at 888-411-1329 or simply fill out our quote form for free Medigap quotes. It’s an easy way to see just what we can do for you!
Thank you for reading our article Is Buying Medigap Plan F a Good Idea? Please chat with us online, leave a comment below or email us your questions at service@remedigap.com.
Joann Quinn is the Chief Compliance Officer and Cofounder of REMEDIGAP. She is a licensed Medicare agent in 47 states. Her main role is to provide essential resources and tools to educate eligible individuals on Medicare. Joann provides helpful Medicare education to thousands of viewers with our popular REMEDIGAP YouTube channel. With expertise in Medicare Supplement, Medicare Advantage, and Medicare Part D, Joann is a highly knowledgeable and sought after Medicare insurance professional.
Hello Joann,
When I was first eligible to enroll in a Medigap Plan, I considered Plan G but the Insurance Carrier did not offer Plan G. I then considered Plan N but was discouraged from doing so by the agent who stated that the excess charges would likely exceed any premium savings. I was also told that I could switch from Plan F to Plan N at any time but not from Plan N to Plan F without answering a series of possibly disqualifying questions. I bought Plan F for the piece of mind but now feel that the agent may have been less than truthful.
Should I be able to switch freely between the two plans and possible reduce my costs? Thanks
Hi Vincent, Most companies will want to medically underwrite you to replace Plan F to Plan N –or– Plan N to Plan F. It really depends on the guidelines set by the insurance company. Very few will allow you to move freely between plans.
I will be 65 in January 2018. I applied for disability but have not been approved yet.
If approved will I be responsible for paying my supplemental premiums and being charged for Part B based on my previous 2 year income?
Hi Charles…when you are approved for Medicare, your Part B premium will be in relation to your adjusted gross income (on your tax return) from 2 years ago.
Joann,
Understanding that my Part B premium will be in relation to my adjusted gross income (on my tax return) from 2 years ago, will this be re-adjusted each year going forward?
I ask since I will be 65 on November 1, 2018. I will be retiring as of 1/1/2019 therefore, my adjusted gross income (on my tax return) my adjusted gross income (on my tax return) from 2 years will be much higher than it will be going forward in retirement.
Thanks,
Thank you for reaching out with your question. The Part B premium is adjusted each year based on your adjusted gross income (on your tax return) from 2 years prior. Social Security sends you a letter at the end of the year with your new Part B premium payment amount for the upcoming year.
My husband is turning 65 in November. …but is planning on working till 66 or longer….he has insurance. ..what do we actually have to sigh up for….I am only 62 and on his insurance.
Hi Kathy,
Thanks for visiting our website.
If your husband is still working and keeping group employer health coverage, he doesn’t need to sign up for Medicare Part B. Most people, though, will sign up for Medicare Part A even when they have group employer health coverage. Part A is “premium free”…because you already paid for it by working and paying taxes. It’s always a good idea to check with the employer’s Benefit Administrator to see how Medicare works with their plan.