March 16, 2015
Whether you are just turning 65 and looking at your Medicare options for the first time, or you have been on Medicare for some time and want to lower your cost while keeping the service and benefits you are used to, seniors in Florida face the same tough decisions as seniors anywhere in this country. However, the way Medicare Supplement plans are priced, the Medigap Plan F High Deductible makes sense for Florida Seniors.
A survey of insurance professionals in Florida revealed Medigap Plan F-High Deductible (Plan F-HD) as the plan they will or are using for their Medicare. Shockingly, they admitted to not showing this plan to clients because the commission is too low. And yet, the annual maximum out-of-pocket limit on Medigap Plan F-HD is LESS than the required annual premium of Medigap Plan F or Plan for most Florida seniors.
With a Plan F-HD you can lower your monthly premiums to just $50-$70 and have an annual maximum out-of-pocket limit that is $2,180; less than the annual premium for most Medigap Plan F coverage!
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A Medicare Plan F may cost a 65-year old in Florida $2,705 per year in annual premium. It covers 100% of Medicare expenses not covered by Original Medicare Parts A & B. It has no deductible.
A Plan F-high deductible in the same county would cost about $755 per year. This plan covers 100% of Medicare expenses not covered by Original Medicare Part A & B after the annual $2,180 deductible. The maximum annual out-of-pocket risk with this plan is also $2,180.
The difference in cost between these two plans is $2,705 – $755 = $1,950 per year.
This means that if you choose the Medigap Plan F over the Medigap Plan F – High Deductible, you will be paying$1,950 per year in mandatory premiums to protect against a possible cost of $2,180. That is all the extra premium is buying you because Medigap Plan F-HD covers everything else.
This is like paying $19,500 per year to insure a $21,800 car. It is simply not a good deal for anyone but the insurance company and the agent that is paid off the higher premium.
Your actual cost will depend on your age and zip code, but the ratio of cost to coverage is the same. Complete a Quote Request form to see the actual numbers for you and how much you can save!
Complete this Quote Request Form right now for a personalized quote that includes the best prices for Plan F-HD, Plan F and Plan N . These are the best value in Florida. Quotes for all other plan types are available on request, free of charge.
For seniors new to Medicare, the first choice is deciding between a Medicare Advantage Plan or Original Medicare with a Medicare Supplement (Medigap). The second is making certain the choice you make does not end up costing you your savings in the long run.
The table below outlines some of the different features of a Medicare Advantage Plan and using original Medicare with a Supplement:
For the reasons above, less than 30% of seniors eligible for Medicare choose Medicare Advantage. If the choice between Medicare Advantage and traditional Medicare were so cut and dry based on the average monthly premium, we would expect to see a lot more seniors on Medicare Advantage. …What we hear most from seniors when we discuss the options available to them with original Medicare and Medigap coverage are words like; security, predictability, control, choices and flexibility.
Still, Florida residents face a problem with their Medicare Supplement costs not experienced anywhere else in the country. Simply put, Florida seniors pay much more for Medigap coverage than seniors in the rest of the country, almost twice as much. Even so, rather than choose a plan with some of the limits associated with Medicare Advantage, choosing a High Deductible Plan F can offer the best coverage, the most choices and flexibility and still keep costs down to a very affordable level.
The table to the right shows the various Medicare Supplemental Plans available today. Plan F is by far the most popular, followed by Plan G (gaining ground across most of the U.S. and Plan N (where minimal co-pays keep premiums down).
Original Medicare Part A covers 100% of in-patient hospital services up to 60-days with a $1,260 deductible for 2015. Medicare Part B covers 80% of your outpatient doctor and hospital expenses. The various Medicare Supplement Plans (designated by letter) cover all or a portion of the co-pays and deductibles that are the consumer’s responsibility. Of all the Medicare Supplement Plans, only Plan F covers the entire gap left by Original Medicare Parts A & B coverage. It is also the only plan to offer a High Deductible option.
The only difference in benefits between a standard Plan F and the High Deductible Plan F is that with the High Deductible option you must pay for the first $2,180 of covered Medicare Supplement expenses in any given year. This is after Medicare part B pays 80% of your outpatient services. After that $2,180 deductible is satisfied, remaining expenses are covered 100% just like the standard Plan F.
For most Florida residents the mandatory premium for a Medigap Plan F supplement is approximately $2,000 -$2,400 per year. For a Plan F-HD the premium is often just $50-$70 per month and the maximumum annual out of pocket expense is $2,180 — that’s LESS than the Plan F mandatory Premium!
The maximum out-of-pocket annual expenditure is the key to the value of the High Deductible Plan F. The annual or monthly insurance premium must be paid regardless of your health condition or services you need. If you have a high insurance premium, you are guaranteed to pay a high amount each year. With a low insurance premium and high deductible, your Medicare costs will remain low and are typically capped near or below what would be your annual premium with a regular Plan F. In other words, in the good years your costs are low, in the bad years your costs are only about as high as they would have been with a normal Plan F. Consider that the average annual medical claim is only about $500 and seniors seldom spend more than $2,000 per year, with most years you will save well over $1,000 per year compared to a standard Plan F.
Medicare Supplement costs and availability vary by state and even by county. The unusually high costs for Plans F, G and N in Florida make the High Deductible Plan F a viable option for most seniors. Let’s take a look at some real life examples, using services covered by Medicare and some of the lowest cost Medigap insurers to see why the High Deductible Plan F makes sense for seniors in Florida.
Notice that the premium required to keep either Medigap Plan F or N each and every year, regardless of medical expenses, is close to or more than the MAXIMUM out-of-pocket annual limit on Medigap Plan F High Deductible.
The above prices are as of the date of this article and are based on the zip codes starting with 334*. However, in much of Florida Medicare Supplement plan premiums are somewhat less than illustrated above. In the table below, we compare costs for zip codes starting with 335* and include how much a person will pay out-of-pocket considering a year with medical bills reaching $800, $1,600, $5,000 and $45,000 and above. Remember, Original Medicare pays 80% of the Medicare bills regardless of the Medigap plan.
To be fair, we could paste this blog post with prices of different age groups, different zip codes etc. and the results would change somewhat, but not the message. We can see that the big difference is in the Fixed Annual Expense. When you have a high premium, you have a high fixed annual expense regardless of your medical needs. When you have a low insurance premium, most years you will never even get close to the annual Total Maximum Out-of-Pocket expense. In fact, the average senior in Florida seldom has annual medical expenses above $600. This with the substantial lower premium of a High Deductible Plan F, most seniors will enjoy insurance coverage that protects them from high medical expense while enjoying a very low annual insurance cost. This is why the premium savings with a Medigap Plan F High Deductible makes sense for Florida seniors.
On the other hand, Florida seniors in the standard Plan F are assured of high expenses every year regardless of their health.
If you are a senior in Florida and would like to find out how much you can save with a High Deductible Plan F, or would simply like to know the best prices for Medicare Supplement plans in your area, simply complete the Medicare Supplement Quote Form now. You will be glad you did!
I welcome your questions.