Saturday, September 21, 2013

IBM Extend Health - Why I like Medigap F high deductible plans

If you decide to stay with original Medicare part A & B and want secondary aka supplemental aka medigap insurance to cover your copayments and deductibles - I urge you to look at medigap F plans as a great category and in particular the version of the F plan that has a high deductible -  also referred to as F+ plans.  The + doesn't mean more coverage it means there is a deductible.

F plans provide the maximum coverage offered by a medigap. See the comparison chart at the end of this post for all the types of medigap plans that are available.  A reminder - no matter who is selling a medigap plan - the elements are always the same.  So, buy the cheapest medigap plan in the letter category you are considering.  There is no advantage to buying a higher premium policy.

OK - so I like F plans because they cover everything.  Why the deductible version?  After all, the deductible portion of the F+ plan is currently $2110.  This deductible is set by Medicare and not by the insurance companies.  It goes up a bit every year but nothing drastic.  Last year it went up by $10. Even so, $2110 seems like a lot of money but when you do the math it really isn't.

At first, I did a bunch of calculations to decide whether or not to use a high deductible F plan. I looked at my coinsurance payments in 2012 and in 2013 and a lot of "what ifs" as to when would F be better than F+.

In my opinion that is not at all necessary. Here is my current analysis;
  • Take the F+ deductible and divide it by 12.  In 2013 (2110/12) is  175.83.  For the sake of simplicity I'll use 176.
  • Add $176 to the F+ policy monthly premium.  In New York the monthly premium is about $80/month so the effective F+ premium is $256/month.
  • Compare the adjusted F+ premium (e.g., $256/month) to the montly premium for an F plan with no deductible.  In New York it is about $323/month.
  • If the adjusted F+ premium is lower than the F premium then the F plan without a deductible is more expensive - always buy the F+ plan.  So, in my NY example, no matter my health - I will pay less in deductible and premiums to have an F+ plan ($256 vs. $323) than to have an F plan.
  • If the adjusted F+ premium is the same as or higher than the F premium then buy the F plan if you are not healthy.
  • If the adjusted F+ premium is the same as the the F premium and you are healthy buy the F+ plan because you might get lucky and not pay out the whole deductible.
  • If the adjusted F+ plan is higher than the F premium and you are healthy then decide if you want to gamble you will stay healthy. If you get sick - especially early in the year -  it may end up costing you more to be on an F+ plan. 
I hope this logic helps you decide what plan to pick.  Reminder - the deductible and copayments are covered by your HRA - if you have one.

 I pulled the following chart off the website:

Medigap BenefitsMedigap Plans
Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used upYesYesYesYesYesYesYesYesYesYes
Part B coinsurance or copaymentYesYesYesYesYesYes50%75%YesYes***
Blood (first 3 pints)YesYesYesYesYesYes50%75%YesYes
Part A hospice care coinsurance or copaymentYesYesYesYesYesYes50%75%YesYes
Skilled nursing facility care coinsuranceNoNoYesYesYesYes50%75%YesYes
Part A deductibleNoYesYesYesYesYes50%75%50%Yes
Part B deductibleNoNoYesNoYesNoNoNoNoNo
Part B excess chargesNoNoNoNoYesYesNoNoNoNo
Foreign travel exchange (up to plan limits)NoNoYesYesYesYesNoNoYesYes
Out-of-pocket limit**N/AN/AN/AN/AN/AN/A$4,800$2,400 N/AN/A
* Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,110 (in 2013) before your Medigap plan pays anything.
** After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in inpatient admission.

If you live in Massachusetts, Wisconsin or Minnesota check medigap offerings are different.  Check with the state SHIP ( will give you the phone number) to find out what they offer.


  1. Most charts of Medigap plans show only plan F among the rest of the alphabet, and indicate that there is a High deductible version of plan F that has a deductible of $2110 for 2013. Usually there is a note at the bottom of the chart that explains how plan F high deductible (you refer to it as F+) differs from Plan F. Depending on the chart the notation will either read like this:
    1. "You must pay for Medicare-covered costs up to the deductible amount ($2,110 in 2013)
    before this Medicare Supplement policy pays anything."
    Or this;
    2. "High Deductible Plan - This plan provides the same benefits as Plan F after one has paid a calendar year deductible of $2,110 for 2013. Out of pocket expenses for this deductible are expenses that would ordinarily be paid by the plan. These expenses include the Medicare A and B expenses that would ordinarily be paid by the plan. These expenses include the Medicare A and B deductibles, but not the foreign travel emergency deductibles."

    My friend and I differ on whether we, the purchaser of a F high deductible plan, have to pay the Part A and/or Part B deductible out-of-pocket or whether the plan pays these. I say we have to pay it out-of-pocket and that it'll be applied to the total deductible of $2110 for 2013. My friend contends, that no, the plan pays the medicare Part A and/or B deductibles and leaves us with the $2110 deductible to to be satisfied before the plan pays any additional medicare expenses.

    Who is right?

    1. YOU are right. The F high deductible plan pays nothing at all until your out of pocket costs total $2110 (for 2013). After that it pays for everything EXCEPT a $250 deductible if you get sick during foreign travel. Reminder - if you have $$ left in your HRA account you can submit those copay bills for reimbursement. In a post I did today I provided a link to a brochure on that is excellent and describes medigaps in detail.