A Medicare High Deductible Plan F is a version of standardized Plan F in which you take on all the initial costs for your medical care each year. After you have met the deductible, the plan becomes just like standard Plan F. Generally this a great plan for someone who has a high income or has a health savings account (HSA) qualified plan in place.
Keep in mind that all Medigap plans supplement Original Medicare benefits. So you can be sure that regardless of which coverage you select, Medicare will always pay its share of your medical costs as established by the Centers for Medicare and Medicaid services.
Many people enroll in a standard Plan F because they want the first-dollar coverage. They want to know that whatever they’re medical costs are, they’re going to be paid by the plan and not have to worry about coming out of pocket to pay deductibles, coinsurance or copayments that Original Medicare leaves behind. However, some cost-conscious beneficiaries can financially absorb a certain amount of charges in order to get much lower premiums. If that’s you, then you’ll be interested in a high deductible plan f version with its lower monthly premiums than the standard plan f.
With High Deductible Plan F, Original Medicare first pays its share. Then you agree to pay all the charges out of your own pocket until you’ve reached met the deductible for this plan as established by the Center for Medicare and Medicaid Services. Each year the government sets what the deductible is for the High Deductible Plan F. This year they’ve set it at $2240 for 2018. That’s also your maximum out-of-pocket for the plan. In other words once you’ve paid $2240 out of your own pocket at any point in the year, your High Deductible Plan F will act just like a standard plan F and pay 100% of any medical costs for the rest of the year.
Take a look at an example Let’s say you were in the hospital early in the year. Original medicare will pay for all your charges as an inpatient except for the Medicare Part A deductible. The centers for medicare and medicaid have established the 2018 Part A deductible at $1340 and you’ll have to come up with that amount out of your own pocket. Since you have to meet the entire $2240 deductible on your Medigap plan before your coverage pays for anything, you’ll need to pay the entire $1340 on your own. The good news is that the money you pay applies against the $2240 deductible that you’re responsible for. If you have other medical charges throughout the year, you’ll pay your share only up until you’ve have reached the $2240 because it is also your maximum out of pocket limit.
Afterwards this plan works just like the standardized Plan F. It will pay 100% of your share of all Part A and B deductibles, copayments or coinsurance that Medicare doesn’t cover.
Below you’ll see a chart of benefits for Plan F. The best way to think about this is that everything is correct only AFTER you’ve paid the first $2240 out of your own pocket. Each year, the Centers for Medicare and Medicaid Services CMS adjusts this deductible, so like everything else, it goes up a some each year.
If you choose this option, this means you must pay for Medicare-approved costs up to the deductible amount of $2,240 in 2018 before the High Deductible Plan F pays anything.
Why would someone buy a plan with a $2240 deductible?
It’s about money, it’s always about the money, so the main reason to buy this plan is that you’ll have lower monthly premiums with a Medicare High Deductible Plan F vs the standard Plan F supplement. The potential savings is very appealing to someone who has the financial means to absorb some out of pocket costs if they’re in need of medical services. This especially appeals to medicare beneficiaries that have a significant amount of retirement savings at their disposal. They can often afford to pay for out of pocket costs that may be incurred in exchange for the opportunity to save money in a year when they don’t need much medical treatment.
In the last several years, many company employer plans have gone to a similar concept and now offer high deductible options where the premium for you and for your employer is alot lower if you enroll in say a $4000 deductible plan as instead of a plan with only a $1000 deductible. All insurance carriers give you a better deal on your monthly premiums if you’re willing to take on more of the risk yourself in form of a high deductible. This is a similar concept.
Well, its been our experience that many people who think they’d like the High Deductible Plan F ultimately don’t like it. The reason they tell us is they tend to feel nickled and dimed every time they go to the doctor because Medicare pays 80% and they get a bill for the other 20% (up until they’ve met their deductible). Some of our clients will signup for a High Deductible Plan F but then call us back a few months later and change their mind. When that happens they generally want to purchase the standard Plan F that covers everything. A word of caution though, if you start out on a High Deductible Plan F but later want to change plans, you’ll most likely need to go through medical underwriting to qualify unless you have a guaranteed issue enrollment period available. If you have been experiencing a number of medical problems and are switching becomes you’re having alot of out-of-pocket costs, those charges maybe for medical conditions that would disqualify you and not allow you to change to a better plan.
Don’t get us wrong about the Medicare High Deductible Plan F, its a great value and many people who understand it like it just fine because it offers savings that some other plans do not. However, keep in mind that when you DO incur some deductible charges and have to come out of your own pocket to pay them, you’ll have to remind yourself that you have also been benefiting by paying significantly lower premiums than other plans options. You’ll need to remember that up to this point you’ve saved a significant amount of money with lower monthly premiums than what you would’ve paid if you had purchased the standard Medicare Plan F.
The pricing for Medicare Plan High Deductible F varies among different private insurance companies, and not every carrier offers this plan. Using our Medicare Coverage Helpline of the best medicare supplement insurance carriers will help you with compare more than just rates. We’ll show you the rate increase history for each carrier and we can lookup their current financial ratings as well. We can walk you through what you need to know so that you can measure the potential savings versus the potential out-of-pocket spending you may have and this will you determine if this less than popular Medigap plan would be a good fit for you.
The centre for medicare and medicaid services is also known as CMS, the government entity responsible for the insurance program that provides health care.