Medicare Supplement or Medigap Plan F has been the popular choice since it was first introduced in 1990. Over the years, over 50% of all new Medicare Supplement sales were with a Plan F, and for a long time, that decision made sense. The times they are a changing. Not only is a Medigap Plan F not your best option anymore, buying one could be the worst financial decision ever.
The Medigap Plan F Cadillac Plan is No Longer Necessary
In the past, excess charges were a legitimate concern and having a plan with 100% coverage was a smart choice. Today, with the laws governing excess charges, and the reality that 96% of doctors accept Medicare Assignment, a Medigap Plan F is overkill and a waste of money.
Buying a Medigap Plan F Could Be a Financial Disaster
Because of the plans popularity, it has always received a large mix of applicants, making rate increases very manageable. All of this will soon change with the passing of the Medicare Access and CHIP Reauthorization Act of 2015. The new legislation phases out the much loved Plan F, locking it’s owners in a stagnant pool of aging insureds. With no new and healthier insureds entering the mix, large rate increases are inevitable.
Uninformed Agents Continue to Sell the Medigap Plan F
I am amazed how many agents continue to endorse buying a Plan F. I don’t know if it’s because they’re uninformed, or they don’t understand how rates are determined on the products they sell. Maybe they don’t care about the repercussions, as long as they make a sale.