We all know that Medicare was never intended to pay for all of your medical expenses.  However, according to a recent study by the Department of Health and Human Services, Medicare Part A, B and D pays for a little less than half of the average medical costs for seniors age 65 and older.  For this reason, it is important to have supplemental insurance coverage.

On June 1, 2010, Medicare changed when the Federal government mandated states to force insurers to stop sales on the “old” plans and begin offering a new set of plans.  These new plans eliminate the plans that offered pharmacy protection which is now covered under Part D.  Before Part D, we had to look at the H, I, or J plan for medication coverage but is no longer the case.  The new plans feature certain cost sharing elements designed to lower premiums.  Some new plans also offer eye wear or hearing aid benefits as well.

With the new Part D for medication, subscribers can concentrate on the core benefits for Medicare supplements.  Today, Plan F is a very good value because it offers coverage for Medicare key gaps such as the 20% co-insurance, 15% allowable excess charges (amount providers can charge up to 15% higher than what Medicare allows) and the two deductibles (Part A and B).

The best value on the market tends to be the F plan and that is why 85% of Medicare supplement purchasers go that direction.

Difference Between Plan C and Plan F

Today, by law, a provider can charge up to 15% higher than the standard Medicare rate and still be considered participating.  This is a big deal for two reasons:   First, you do not want to pay 15% of a $100K hospital bill ($15,000). Secondly, as the Medicare program finds itself under more financial pressure, reimbursement to providers will be under pressure. This means that more providers will likely charge the excess in the future. This is the sole reason we recommend the F plan over the C plan. The C plan does not cover Excess where the F plan does cover Excess. For the small monthly premium difference between C or F, it makes sense to cover this potential amount.

Below are the eight gaps covered by Standardized Medicare Supplemental Insurance plans. 6 of these 8 gaps are covered by Medicare Supplement Plan F. The two gaps that aren’t covered (At Home Recovery and Preventative Care) are not covered by Medicare Insurance at all.

Covered by Medicare Supplemental Plan F

1) Basic Benefits:

• Part B Coinsurance (Generally 20% of outpatient expenses)
• Hospital Coinsurance
• 365 Additional Days Hospitilization Coverage
• Blood Deductible Coverage

2) Skilled Nursing Coinsurance

3) Part A Deductible

4) Part B Deductible

5) Part B Excess

6) Limited Foreign Travel

Not Covered by Medicare Supplement Plan F

1) At Home Recovery

2) Preventative Care

*Plan F also has an option called a high deductible Plan F. This high deductible plan pays the same benefits as Plan F after one has paid a calendar year $2,000 deductible. Benefits from high deductible plan F will not begin until out-of-pocket expenses exceed $2,000. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. These expenses include the Medicare deductibles for Part A and Part B, but do not include the plan’s separate foreign travel emergency deductible.
**Plan N includes Basic, including 100% Part B co-insurance, except up to $20 copayment for office visit, and up to $50 copayment for ER.

Foreign Travel

There is not a supplemental plan that offers more than 60 days of coverage outside the U.S., and the maximum benefit is $50,000.00 within that 60 days.  The supplemental plans that offer this limited foreign travel protection are C,D,F,G,M and N.

International Long Term Medical Insurance Options

If you are a senior that lives outside the U.S. for more than 6 months of the year, there is another option available to you.  Long term international health insurance acts as your Medicare Supplemental insurance but also covers you outside the U.S.

Global Medical Insurance offered by IMG covers you outside the U.S. and within the U.S.  To qualify, you have to live outside the U.S. at least 6 months out of the year.  You need to provide a foreign address but you do not need to own a home.  Renting is O.K.  If you have to submit a claim, your passport stamp is proof of your time outside the country.  Home ownership is not necessary.

When you are in the U.S., Medicare is your primary insurance provider, and your Global Medical Insurance is your secondary, or supplemental, provider.  Within the U.S., you have access to a P.P.O. network of doctors who accept Medicare.  Outside the country, you may seek treatment any where you need to in a foreign country.

When choosing between Medigap Plan C or Plan F, Plan F is the most comprehensive supplemental insurance available today if you live full time in the U.S.  International health insurance is another robust option for seniors that live outside the country for at least half of the year.