Medicare Plan F Changes and How They'll Affect Seniors

Almost 50 million Americans currently depend on Medicare for their health care coverage. That number is expected to reach 64 million by 2020 due to the number of baby boomers who will be turning 65 by that time.

However, Medicare is making some changes to its program that will result in the elimination of Medicare Plan F. Seniors need to understand these changes in order to adequately plan for their future health care coverage.

What Exactly Is Plan F?

Original Medicare consists of two parts: Part A, hospital insurance, and Part B, medical insurance. Original Medicare does not provide prescription drug coverage. Although Medicare covers hospital and medical expenses, it does not pay 100 percent of those expenses. In most cases, it only pays about 80 percent. The patient is responsible for the other 20 percent.

Private insurance companies offer Medigap policies that are designed to supplement the coverage provided by Original Medicare. Millions of Americans depend on those plans to cover some of the gaps left by Original Medicare, such as copayments and deductibles. Without Medigap policies, many seniors would have difficulty coming up with enough money to cover those gaps.

Medigap policies are coded with letters of the alphabet that denote the type of coverage they provide. Out of the 10 plans available, Plan F is by far the most popular. In fact, more than 65 percent of all Medicare beneficiaries are enrolled in Plan F despite the fact that it is one of the most expensive plans.

The Medigap policies are standardized, meaning that all policies beginning with the same letter offer the same basic coverage. In other words, a Medigap Plan F policy offered by Insurance Company A is basically the same as a Medigap Plan F policy offered by Insurance Company B.

Medigap Plan F pays the medical deductibles for Original Medicare Parts A and B. It allows a patient to see any doctor nationwide that accepts Medicare. It also covers the coinsurance and copay amounts for standard office visits.

Medicare Plan F is beneficial to seniors because it allows seniors to receive the medical services they need without having to worry about first paying a deductible. They can also visit their doctor without having to pay a coinsurance or copay.

Of all the Medigap policies, Medicare Plan F may require the least out-of-pocket expenses. It allows seniors to pay nothing for doctor visits, hospital stays, lab work, and other health-related costs. This makes it easier for seniors to get the health care they need and still be able to stay on budget.

Is Plan F Going Away for Good?

Congress passed a law in 2015 that changed various aspects of Medicare, including the way that supplemental plans work. As a result of those changes, insurance companies will no longer be able to sell supplemental policies that cover the Medicare Part B deductible as of January 1, 2020. This means that Medicare Plans C and F will be going away because both plans cover the Part B deductible.

The discontinuance of Plan F is designed to reduce the federal government's cost to fund Medicare. Proponents of the change believe that not having to pay for such things as copays and deductibles encourages patients to visit their doctor more often than they need to and seek medical attention that isn't absolutely necessary, which drives up the cost of health care covered by Medicare. The theory is that if a patient has to come up with some of the out-of-pocket expenses, the patient will pursue only those medical services that are absolutely necessary, which will help to control the cost of Medicare.

What Should You Do Now?

The good news is that if you already have Plan F, you do not have to do anything. You can keep it. The law only affects those that enroll after January 1, 2020. Those that already have Plan F will be grandfathered in.

If you do not presently have Plan F, it might be possible for you to purchase a Plan F or Plan C policy prior to the January deadline. If that is unsuccessful, you may be able to enroll in Plan G, which covers almost everything that Plan F covers except for the Medicare Part B deductible.

Conclusion

As a senior, you should be able to secure the medical services you need without having to worry about breaking the bank.

In the past, Medicare Part F was helpful in that regard because it limited the out-of-pocket expenses that you were required to pay. However, since it is being phased out beginning January 1, 2020, you owe it to yourself to do your own research in order to become familiar with all the options these looming changes may bring.

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