Is it a bad idea to drop Medicare Supplement Plan F?

Coleman asked...

I currently have a Medicare supplement plan F, which I cannot afford. It is causing me great hardship to keep. Would I be making a big mistake to drop it, even though my health is reasonably good?

Expert Answer

If you're having trouble paying your Medigap supplemental insurance premiums, dropping your supplemental coverage altogether is not a good idea because trying to get new insurance later, when you're older and may have health problems, can be much more difficult. That's because after an initial period following your original enrollment in Medicare, the insurance companies that sell Medigap policies do not have to automatically sell you a policy if they think you are too great a health risk. Because you're relatively healthy now, you may be able to switch supplemental insurance more easily than you would later. Here are some of your options.

  1. You can shop for another Plan F Medigap policy from another insurance company but at a lower premium. This would allow you to keep the same coverage. But the odds of finding a much more affordable Plan F policy aren't great because all Plan F policies tend to be expensive due to their extensive coverage.

  2. You can shop for a different Medigap supplemental insurance policy in a different plan category. The most important part of Medigap for most people is coverage for the 20 percent of doctor and other outpatient fees that Medicare Part B doesn't pay. But almost all plans cover this outpatient coinsurance amount, so you may be able to find a Medigap policy in a different plan category that is considerably less expensive than your current Plan F policy but that still gives you good supplemental coverage. Because you are now relatively healthy, you may be able to find several less expensive Medigap policies. But you'll have to shop around, and you'll probably have to permit the insurance companies to examine your medical records before they'll sell you a policy.

  3. You could consider switching from Medigap to a Medicare Part C Medicare Advantage plan. These are usually some type of managed care plan (like an HMO) which would directly control (instead of Medicare itself) how you receive care. They usually have restrictions on the doctors and other providers you can use. However, they tend to be a little bit less expensive than traditional Medicare plus a Medigap policy. If you shop for a Medicare Advantage plan, be aware that the new federal health reform law is going to cut payments to these plans, so that their monthly premiums are likely to rise over the new few years.