If you are turning 65 soon, you may be considering your Medicare options. As you explore ways to expand coverage and protect yourself from potentially overwhelming medical expenses now and in the years ahead, you may consider purchasing supplemental insurance to help you pay for some of the healthcare costs associated with Original Medicare.

Original Medicare includes both Part A (Hospital Insurance) and Part B (Medical Insurance). While it certainly helps cover many costs of healthcare services, care, and supplies you may need, you will likely be responsible for co-insurance, copayments, deductibles and premiums. Depending on your healthcare needs, your out-of-pocket costs can add up. Even individuals without any chronic health issues or concerns when they first enroll in Medicare consider buying supplemental insurance to protect them in the future.

Life can be unpredictable and as we age, we can experience changes in our health. Making a decision to purchase a Medicare Supplement plan when you are first eligible may provide invaluable coverage later on.

What exactly are Medicare Supplement plans?

Medicare Supplement, also known as Medigap, plans are sold by private insurance companies to help supplement your Original Medicare coverage. The plans are regulated by the federal government to protect Medicare recipients, but coverage between the individual plans, identified by letters A-N, vary. The basic benefits are standardized, but plans can offer additional coverage. Costs can also vary among plans, so it’s important to review your options and compare plans to find the coverage that is right for you.

Some Medicare Supplement plans help cover some of the costs of coinsurance, copayments, skilled nursing care and even medical care you need while traveling outside of the United States. Some plans also provide an annual out-of pocket limit. Why is a cap on out-of-pocket expenses important? Let’s look at an example.

Under Original Medicare, you will generally be responsible for paying 20% of your medically necessary services under Part B. If you require outpatient surgery for an illness or injury, for instance, Part B will cover 80% of the Medicare-approved amount of the procedure. Depending on your specific needs, you could be paying thousands of dollars out-of-pocket for just one medical event. Medicare Supplement Plan L has an annual out-of-pocket maximum limit of $2,940 in 2020, so regardless of your further medical needs that year, you would not have to pay more than that.

Of course, plans with the most coverage may have the highest premiums and/or deductibles, so it’s important to compare your options and understand your benefits. In the past, Medigap Plan F has been the most popular policy sold to Medicare recipients because of its comprehensive coverage.


What Does Plan F Cover?

Medigap Plan F covers many of the out-of-pocket expenses that Original Medicare does not, including the following benefits:

  • 100% coverage of Part A coinsurance and costs while staying in the hospital, for up to 365-day once Medicare benefits are exhausted
  • 100% coverage of Part B outpatient coinsurances and copayments
  • 100% coverage of the first 3 pints of blood for a transfusion.
  • 100% coverage of Part A’s coinsurance or copayment for hospice care.
  • 100% coverage of the coinsurance at a skilled nursing facility.
  • 100% coverage of the Part A deductible
  • 100% coverage of the Part B deductible
  • 100% coverage of excess charges with Part B
  • 80% coverage of medical care during a foreign travel emergency

Plan F does not limit annual out-of-pocket expense limits like some other Medicare Supplement plans do. Private companies selling Plan F have offered two different versions of the coverage to appeal to Medicare recipients with different needs.

Plan F vs. High-Deductible Plan F – What are the differences?

High-Deductible Plan F has been attractive to some Medicare beneficiaries because it offers the same coverage as Medicare Supplement Plan F but has a lower monthly premium. However, the deductible is typically much higher. You’ll pay more out-of-pocket with High-Deductible Plan F before your plan starts paying.

Medicare Supplement Plan F covers the same basic benefits regardless of which insurance company sells them, but each insurance company sets its own price. Medigap policy costs can vary depending on things like your age and where you live.

Whether you chose Medicare Supplement Plan F or High-Deductible Plan F, you will be able to keep your coverage if you enrolled prior to January 1, 2020. Unfortunately, changes to Medigap will affect your ability to purchase Plan F after January 1, 2020.

Changes to Plan F in 2020

Medigap Plan F has been the most popular option for Medicare recipients over the years, but can I still purchase it? Unfortunately, Plan F is no longer sold to newly eligible enrollees as of January 1, 2020. This change was due to legislation that prohibits the sale of Medigap policies that include Part B deductible coverage.

Good news! Medicare recipients who have purchased a Plan F prior to January 1, 2020 will be able to keep their policies. If you were eligible prior to January 1 but have not yet enrolled, you may still be able to do so. If you are eligible after January 1, you will have many other options to choose from as you explore Medicare benefits.

Medicare Supplement Options

If you are just turning 65 this year and are considering your Medicare Supplement policies, there are still several options to choose from. Many people who liked Plan F coverage might be drawn to Plan G. Medicare Supplement Plan G is the most comprehensive policy currently being sold for newly-eligible individuals. Plan G offers similar coverage to Plan F, but does not include the Part B deductible or an annual out-of-pocket maximum. (Plan K and Plan L are the two Medicare Supplement policies that provide out-of pocket maximum limits.)

Medigap Initial Enrollment Period & Guaranteed Issue Rights

Once you turn 65 years old and are enrolled in Medicare Part B, you will have a 6-month Medigap enrollment period. (If you are under 65 years of age and want to purchase a Medigap policy, you will need to check the plans available in your state.) During this Medigap initial enrollment period period, you will have a guaranteed issue right to purchase any Medigap policy sold in your state. You will not be subject to medical underwriting and cannot be charged more or turned down for coverage because of any pre-existing conditions.

While enrollment for Medigap plans is limited to the 6 months when you turn 65 and are enrolled in Part B, there are other life events that can offer you a guaranteed issue right. These prevent Medigap plans from denying you or delaying your coverage for pre-existing conditions or charging higher premiums if you qualify. Medicare recipients who satisfy the special circumstances that grant them guaranteed issue rights may still be able to enroll in that plan if it’s offered in their area.

Can Plan F Enrollees Change Their Coverage?

It’s important to note that the premiums for discontinued plans like Plan F can rise once new Medicare beneficiaries can no longer enroll in it. Current enrollees may find the cost of their Plan F’s premium too high when compared to other Medigap plans on the market. However, there are some important factors to keep in mind before changing to a different Medigap plan.

Loss of coverage can open up penalty-free enrollment rules for other Medigap plans, but this does not apply to plans that are still being offered even though they have been discontinued for new enrollees. An existing Plan F recipient may not be able to switch to another Medigap plan if the plan denies them coverage due to a pre-existing condition. Recipients may also find they are charged a higher premium for attempting to switch plans past their initial enrollment period.

If a recipient is still within their 6-month open enrollment period when they chose Plan F, they may switch to a different Medigap plan without these issues factoring in. In addition to that, Medigap plans offer recipients a 30-day grace period where they can return to their former plan if they don’t find the new one to their liking. Premiums for both plans must be paid during this period.

Commonly Asked Questions about Medicare Supplement Plans

Can I buy a Medigap policy after my initial enrollment period? You may still be able to buy a Medigap policy after this period has ended, but insurance companies can deny coverage based on pre-existing medical conditions you may have. You can also be charged more for your policy if you have chronic medical issues.

Will my Medicare Supplement plan include prescription drug coverage? No, Medicare Supplement plans are no longer allowed to include prescription drug coverage. If you have Original Medicare, with or without supplemental insurance, and want prescription drug coverage, you can enroll in a standalone Prescription Drug Plan (PDP). PDPs are sold by private insurance companies to provide Part D benefits.

If I move out of my current state, can I keep my Medigap plan? As long as your Medigap plan is sold in the state you are moving to, you should be able to keep your current Medigap policy. Keep in mind that Massachusetts, Wisconsin, and Minnesota have different types of standardized plans, so if you are moving in or out of those states, you may need to switch plans.

Should I enroll in Medigap or a Medicare Advantage (MA) plan? Every Medicare recipient has unique needs and preferences, so it’s important to compare your options and find the coverage that is right for you. If you have Original Medicare and a Medigap plan without annual out-of-pocket maximum limits and you experience an unexpected and costly medical event, you could pay more than if you were enrolled in a Medicare Advantage plan. MA plans include your  have annual out-of-pocket maximums.

Do Medigap plans include dental or vision benefits? Medigap plans do not include routine dental or vision coverage, but many insurance companies offer stand-alone plans that will get you the coverage you need at a price you can afford.