Medicare High Deductible F Should Be The First Choice For Medicare Supplements

People choose medicare supplement plans for a variety of reasons. Some people choose them based on the name of the company offering them, advice from family or neighbors, and advertising on TV. Others may go with advice from a local senior center or simply go with a Plan F because it offers the most coverage. Whatever the reasons may be, they are usually not enrolling in the most financially sound option.

High Deductible plan F should be the choice for any person over the age of 65 taking a Medicare Supplement Plan. ( I say over 65 because it is not usually available to those on Medicare under the age of 65) High deductible F is not as easy to understand as the more popular options such as Plan F,C,D or even plan N. However, if people did take the time to understand the plan, they would see that it is by far the best option from a mathematical standpoint.

Plan F High Deductible works in the following manner: It will cover the Medicare co insurance and cost share once a person spends $2,070 in any given year. In general, this means that when a person goes to the doctor, Medicare will pay 80% of allowable charges and the patient will pay the 20% left over. It works the same way with other services such as testing and physical therapy. If they go to the hospital, they will pay the hospital deductible and then Medicare will pick up the rest. If these expenses add up to $2,070 in any given year, the high deductible F plan will pick up the remaining charges just like a normal Plan F does from the start.

The reason that high F makes so much sense is the math. In many states, high F costs $33.06 a month. The lowest cost standard Plan F is $214.50 a month. Plan F covers all medical costs (Medicare allowable) so there is no out of pocket expense, but the premium totals up to $2,574.00 a year. Even if someone uses little or no services for the year, they will still pay this amount. High F has a total cost of $396.72 annual premium ($33.06 x 12 months) and a max out of pocket of $2,070 for a total of $2,466.70. The worst case scenario leaves the person with High F saving $107.00 for the year.

The reality is that few people experience the worst case scenario. Very few will actually hit the $2,070 deductible for the year. Some estimates show that only 5% of people accumulate over $2,000 of utilization. There are a number of sources that estimate how much the average senior actually accrues in part A and B co-insurance and deductibles for the year but the average seems to show it is about $900 a year. Given this estimate, the average senior would save about $1,207.00 a year on plan F high deductible. If they have a very healthy year, they will save even more. If they have a catastrophically bad year, they will only save $107 but there is no risk involved. At the end of the day, they will save money period.

Due to a general lack of understanding, High F will never be as popular as plan F but it should be the overwhelming choice for anyone in a supplement. The math behind it is undeniable.

Edward Crowe is the owner of Crowe & Associates. He spends most of his time advising brokers on strategies that will help them provide more value to current and prospective clients. For additional information visit http://www.croweandassociates.com

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What Does a Medicare Supplement Cover?

A Medicare Supplement, also referred to as a Medigap Policy, is basically an insurance plan that is secondary to original Medicare. You must be enrolled in Parts A and B in order to be eligible to enroll in a Medicare Supplement Plan.

Original Medicare has four parts. Part A is hospital insurance with a deductible of $1156.00 for 2012. Part B is medical insurance with a deductible of $140.00 for 2012. Part C is known as a Medicare Advantage Plan. Medicare Advantage Plans replace your original Medicare insurance. They include hospital insurance, medical insurance, and some plans include prescription drug coverage. Part D is prescription drug coverage. If your Part C plan does not include prescription drug coverage, you can enroll in Part D.

If you choose to keep original Medicare (Parts A and B), most of your expenses will be covered by also having a Medicare Supplement Plan in place. Currently, the Medicare Supplements to choose from are labeled as Plans A, B, C, D, F, F (high-deductible), G, K, L, M, and N. All plans require paying a premium and some require paying additional deductibles before any coverage is provided.

Depending on the plan, each benefit below is either fully or partially covered:

• Medicare Part A Co-insurance and hospital costs up of an additional 365 days after Medicare benefits are used up
• Medicare Part B Co-insurance or Co-payment
• Blood (first 3 pints)
• Part A Hospice Care Co-insurance or Co-payment
• Skilled Nursing Facility Care Co-insurance
• Medicare Part A Deductible
• Medicare Part B Deductible
• Medicare Part B Excess Charges
• Foreign Travel Emergency (up to plan limits)

Detailed plan coverage for each benefit is provided in the official Medicare publication, 2012 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.

All Medicare Supplement Plans must follow federal and state laws and must be identified as Medicare Supplement Insurance. Insurance companies can only sell standardized policies. In other words, they must all provide the same basic benefits but some plans offer additional benefits so you can choose the one that fits your needs. Usually the only difference between the policies is price so it pays to compare apples to apples through different insurance companies when shopping for a particular plan.

Current Medicare Supplement Plans do not cover your prescription drugs. To receive this coverage, you must enroll in Part D by contacting Medicare at 1-800-633-4227 or through the Medicare website during an open enrollment period.

Plans E, H, I, and J have been discontinued. If you currently have one of these plans, you can keep it but if you change plans, you will no longer be able to get one of these plans.

The author is a licensed life and health insurance agent for the state of Illinois. She is an independent agent that is contracted with several companies to get the best products with the lowest premiums. She focuses on providing necessary coverage for seniors. Her specialties are medicare supplement insurance and final expense policies. Visit http://www.illinoisinsuranceproducts.com if you are a resident of Illinois.

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Why Offer Supplemental Benefits?

Small business or large corporation a common struggle is surviving an economy riddled with inflation, downsizing, low consumer confidence and high unemployment. Healthcare Service costs are skyrocketing while government mandates increase the care requirements of Health Insurers. Economic Science tells us that There Is No Free Lunch!

As the health sector services continue to experience rising costs so too, do the Insurance Plans that pay for them.

Employers looking to maintain traditional benefits that they have used to help attract and keep employees are facing the laws of diminishing returns with these rising premiums. Raising Deductibles and increasing Co-Pays, Fixed Employer Contributions, Dual Option Plans, HSA and HRA are some of the choices now being used to help reign in spending costs.

With most of these planning strategies the end result is increased expenses, both in paying for the insurance and provider services (hospital, surgeries, Dr. visits, medications etc.) that fall on the employee.

Enter the world of Supplemental Benefits. The first company to offer these plans was Colonial Life and Accident Insurance, founded in 1939 and headquartered in Charleston, South Carolina, Colonial became the first company to provide benefits through worksite marketing.

Supplemental plans like those offered by Colonial Life have introduced new life into the Healthcare Market. These plans were not affected by Healthcare Reform Legislation. They offer a first dollar benefit payable to the insured and, because of rising out-of-pocket costs they become Insurance for what Health Insurance does not pay. Insurance for Insurance?

An Employee can choose from a menu of choices in plan selection. Among them are Accident, Disability and Cancer plans. These three choices tend to be the most popular but there are others such as Level Term Life, Long Term Care and Critical Illness to name just a few.

Plans are usually offered to the employee on a voluntary basis. Generally, they are presented at Group rates but issued individually, allowing the employee to keep the coverage if they terminate or retire. Costs of the plans are fixed, inexpensive and generally qualify for inclusion in Section 125 plans allowing for additional savings.

Disability should be the plan for most people to consider first. As people find it difficult making ends meet while working full time, the inability to work at all due to an injury or sickness can be financially devastating. Disability payments may be "Tax Free" to the payee as long as the premiums are not included in a tax leveraged, 125 plan or are employer paid. Look for waiver of premium, partial disability, payments for disability even if you are not actively employed and on the job coverage additional to workers compensation as essential components to the plan.

Accident plans could be said to be the best value of the coverages due to their low cost and potential benefit ratios. On or off the job and 24/7 coverage is essential. Spouse and family coverage is typically offered for a low extra cost.

Cancer plans work because one in two males and one in just less than three women in the U.S. will have a type of cancer in their lifetimes. 70% of cancer costs are incidental and not covered by medical insurance. Costs such as loss of work, travel to treatment and lodging for family members, childcare for a recovering parent, or home health care. Of course, medical plan deductibles and co-pays may also be covered.

While any of these plans are selected on a pick and choose, all or some or nothing basis, they are all capable of paying multi thousands of dollars to help offset medical bills and living costs. These low cost options should not be overlooked in a strategy to maintain a high quality Healthcare Benefits program.

http://www.forbes.com/sites/aroy/2011/12/13/unreasonable-rate-review-for-health-insurance/

Terryl G. Roemer has served Cities, Counties, Private Business and several thousand Individuals in Idaho, Nevada and Oregon for the past 30 years. Terrys business has been sustained during this time without advertising, relying on Word of Mouth Testimonials and a high commitment to Claims Service. As a counselor to his clients he assists in helping them buy the best insurance for their needs. He is currently a member of the national group "The Benefit Guys", specializing in Group and Individual Health products, Medicare, Long Term Care, Life Insurance and Supplemental benefits. Claims assistance and advice are integral components to his service. admin@theroemergroupbenefits.com.

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