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How Medicare Supplements Work

Medicare supplements are insurance plans that provide coverage after Original Medicare A and B benefits.  Some people also call  these plans either Medigap or Med Supps.  There are many plans you can choose from.  All these plan options have standardized benefits from plan to plan.  This simply means that if a company is offering a plan F supplement, the benefits will be the same from company to company.  The only difference in the plans will be in the monthly premium.  As a result, it is very important to compare prices when you decide on which company’s plan you are going to use.

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Medicare Supplement plans (Also called Medigap plans) have been around for many years.  Plan F Supplement which is offered by a number of companies is the most popular supplement mostly because it covers 100% of medical expenses not covered by Medicare.

Utilization for people with plan F has trended much higher than that of other supplements.  If someone is paying for a plan that will cover all of their Medical expenses, they are probably going to be more inclined to go to the doctor or get a test than someone who has a cost share.   Given that Medicare is primary when using a supplement, people with a plan F supplement are utilizing more than someone without a plan F supplement.

At one point, I thought Medicare Advantage plans would be phased out over the next few years but now it is time to admit that I was way off.  Cost share plans are the ones that will be around and it is the covered in full plan F that is going to be on the chopping block.

I predict that 2014 will be the last year that Plan F will be offered.  I am sure it will be grandfathered to those that already have it but they will no longer offer it to new customers at some point in 2014.