Medicare Supplemental Plan F is expensive but it may be worth it
Experts often say that Plan F is the best coverage for seniors considering Medicare Supplement insurance (aka Medigap). It is the most comprehensive coverage which, unfortunately, also makes it the most expensive (Click here to see how much Plan F would cost you in your area). While we know it can be expensive, no one really explains how much Plan F could save you…until now. We have done a back of the envelope calculations on what Plan F could possibly save you. The results are surprising.
Updated on 12/26/2017
Potential Medigap Plan F Savings in One Year:
Here is what Medigap Plan F could save you in one year if you are a senior in need of significant medical treatment:
• Your Medicare Part A Hospital deductible: (You could save $6,300)
Medigap Plan F pays 100% of your Part A deductible. Those with just Original Medicare have to pay $1,364 for each 60 day benefit period. This means that if you enter the hospital for a second time after 60 days, you would have to pay that same $1,364 deductible again. Currently one of every five Medicare patients ends up back in the hospital shortly after being released, so this is a distinct possibility. It’s a stretch, but if you entered the hospital 5 times in one year, Medigap could save you 5 x $1,364 = $6,300 on this benefit alone.
• Extra Hospital Stay Costs During days 61-90: (You could save $9,450)
If you stay in the hospital for more than 60 days, you have to pay $335 per day in coinsurance Original Medicare fees. If you get a Medigap plan that covers this benefit, you would save 30 days x $335 per day = $9,450 in one year.
• Extra Hospital Stay Costs for Over 90 days: (You could save $919,300)
You have to pay $670 per day coinsurance per each “lifetime reserve day” after day 90 in the hospital with traditional medicare. You only get 60 lifetime reserve days without a Medicare Supplemental plan. Medigap Plan F would pay the $670 per day benefit which would save you 60 days x $670 per day = $37,800 immediately. Also it would extend hospital coverage for an additional 365 days. The price of these additional days can vary, but could cost as much as $4,100 a day (Money Magazine). The additional hospital days beyond your Medicare lifetime reserve days could be as high as 215 remaining days x $4100 = $881,500 if you spent the rest of the year in the hospital. Wow!
• Skilled nursing cost from day 21 through 100: (You could save $12,560)
You would have to pay $167.50 per day for days 21-100 if you didn’t purchase a Medigap plan with this benefit. This works out to 80 days X $167.50 =$12,560 that you would not have to pay with plan F.
• Your Medicare Part B deductible. (You could save $185)
This amount is only $185 but you will not have to pay it if you purchase Plan F Medigap.
• Doctor Fees. (You could save $100s)
Traditional Medicare expects you to pay 20% of doctor fees. This is the most difficult benefit to quantify because the cost of the doctor visit depends on the services you need. Plan F pays that 20% for you and will pay 100% of any fees your doctor may charge beyond the Medicare reimbursement rate. This is called Part B excess fees and, without this Medigap benefit, if a doctor wanted more than the reimbursement rate you would have to pay for it out of your own pocket. Exact savings here for someone with Plan F is unclear but could be substantial depending on your medical needs and what you doctor charges.
• Blood: (You could save $450)
Traditional Medicare does not cover the first 3 pints of blood. We are not sure exactly what this costs but a good guess would be $150 per pint. Plan F covers this benefit so it would save you $150 x 3 = $450
• Foreign Travel: (You could save $50,000)
Traditional medicare doesn’t cover any foreign travel benefits. Plan F would save you up to $50,000 of foreign medical expenses.
Total up all the above additional costs covered by Medigap plan F and you have over $998,207 in cost not covered by Traditional Medicare. Now, it would be nearly impossible to have all those expenses in one year but you can see that if you had serious health issues and didn’t have plan F Medigap, the cost would add up.
Plan F Next Steps
If after completing steps 1 and 2 above, you feel you cannot afford the Plan F monthly premium, you can learn about Medigap Plan F alternatives here. As always, if you have any questions, please call us at the number above and we would be glad to review your options.