The Death of Medicare Supplement Plan F

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Could This Be the End of Medicare Supplement F?

Medicare Supplement Plan F has been under significant pressure lately as regulators question the increased costs to our healthcare system due to insurance plans that offer first-dollar coverage. It is no secret Plan F is the most popular plan, and the most comprehensive. Approximately 20% of Medicare recipients purchase a Medicare Supplement plan, and of that 20% over two thirds purchase Plan F making it the overwhelming favorite. The reason this plan is so incredibly popular is because those who purchase it almost never have any out-of-pocket medical expenses. This great coverage, government officials argue, is one of the many reasons our healthcare system is going bankrupt.

There have been many studies completed by healthcare economics experts showing decreased utilization rates among beneficiaries who pay a deductible or have co-payments. This would make sense as people who are forced to pay a portion of the cost for medical services would be less likely to visit the healthcare provider, unless of course it is absolutely necessary. This elementary rationale, however, doesn’t tell the complete story.

In a recent study conducted by the National Association of Insurance Commissioners the committee found cost-sharing does stop people from seeking medical care. The wrinkle, however, is that people stop seeking care even when it is absolutely necessary. As one can imagine this can be very problematic as health issues treated at an early stage are far less expensive and difficult to manage than those that have developed over time into a more serious problem.

In a letter drafted to the Secretary of Health and Human Services Kathleen Sebelius, the NAIC committee sternly advised regulators to continue to allow Medicare Supplement plans that offer first dollar coverage (Plan F) to be offered to our nations Medicare recipients. This shouldn’t come as a surprise, however, as everyone knows preventive care benefits are becoming increasingly important. With early diagnosis and treatment of problematic issues, people will be healthier, and healthcare costs will be minimized.

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